Before the Coronavirus pandemic, the Chinese and Indian economies were suffering. Steven Kennedy, Australian Treasury Secretary, said something along the lines of “the coronavirus would take at least half a percentage point off economic growth in the present March quarter, on top of a loss of the best part of 0.2% as a result of the bushfires.” This article explains how share markets in the world collapsed by February and did not recover by March (when the article was written). Also states that business investment fell during 2019 and they were expected to rise. The United States and Australia have two definitions of a recession. With that said, according to Australia’s definition, the United States has not had a recession in 29 years. The article suggests a 10-point plan to avoid a recession. Some of the points are: “cut income tax rates on lower income earners who have a higher propensity to consume, invest in low-cost housing for low-income and homeless families, increase the minimum wage from $19.49 per hour to, say, $20.65 ($785)”
Do you believe these suggestions will have a positive impact on the economy in order to avoid a recession? Why or why not?
Article: https://theconversation.com/this-is-more-than-a-health-crisis-heres-a-10-point-plan-for-avoiding-recession-133073
I think that increasing the minimum wage too much will cause companies to look to replace human labor with new technology investment. I think that in some ways this could help the economy, but in the long run more unskilled workers will be unemployed. Raising the minimum wage above rates of inflation could also lead to higher levels of inflation in the future.
ReplyDeleteI also agree that raising minimum wage too much will cause some more unemployment because there will be a lower supply of jobs and more of a demand for workers that won't be able to find employment. This could have a positive impact though by putting more money into the economy, however, there will be less people to have the money to save and invest. I think there are more ways to fix a recession other than raising minimum wage that would be more helpful.
ReplyDeletei agree with ethan, that this could perhaps help the economy in the short run by increasing the wages of people that are presently employed. This will definitely hurt the economy in the long run because of the amount of blue collar jobs that are vacant
ReplyDelete