Count the International Monetary Fund as another voice in favor of raising the minimum wage in the U.S.
Christine Lagarde, managing director of the IMF, urged American lawmakers to increase the federal minimum wage, to expand the Earned Income Tax Credit (EITC), to invest more in U.S. infrastructure and for better communication from the Federal Reserve.
In an interview with Marketplace, Lagarde said implementation of such policies would lead to “medium-term fiscal growth” in the U.S. and globally.
“By identifying a good medium-term fiscal consolidation path, that will improve the level of confidence that needs to take root in the U.S. for the private sector to invest,” Lagarde said. “You know, commitments. Commitments that would last beyond one election or one mid-term election.”
Lagarde spoke just after the IMF released its annual health assessment of the U.S. economy, lowering estimated growth to 2 percent from its previous estimate of 2.7. Six years after the financial crisis, the organization says it has lingering concerns about “financial stability,” and warns that under-regulating the financial sector could threaten the larger global economy.
“We’re saying this: there is uncertainty on the one hand… when you look at employment numbers, when you look at the participation rate in the job market, when you look at the unemployment numbers and how fast they’ve gone down, you have lots and lots of questions that are not answered,” Lagarde said. “At the other end, when you look at the markets, and you talk to market people, they seem to be overly confident and certain of when tapering will happen and how fast, when tightening will take place and how interest rates are going to move up.”
So if you’re Madame Lagarde, how exactly do you go about suggesting these policies to the Fed Chair? Can you just call up Janet Yellen and ask her to talk over a cup of coffee?
“It was actually over salad that we shared, not a cup of coffee,” Lagarde says.
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