What exactly is in the $1.9 trillion dollar stimulus package winding through Capitol Hill this week? Newell asked Manhattan Institute Senior Fellow Diana Furchtgott Roth onto the program Wednesday morning to discuss.
“There's a lot in that $1.9 trillion bill,” Roth began. “We passed $2.2 trillion last year in May, and then $900 billion in December. Many people in the United States need help… just look at restaurant workers, hotel workers. There's no way many of these people can work right now, but the question is - we need targeted help, and it's not clear that we need another $1.9 trillion, when the basically $3 trillion that was passed last year has not already been spent. That's what I would say, much as we need to help those who have lost their jobs.”
“Where did this go astray?” Newell asked. “Candidate Biden actually articulated what you just said, that we needed targeted help, these aid packages needed to be targeted to get to the right people at the right time so that they could make it through this challenge. Republicans have been saying the same for a long for a while. Is this just something that got caught up in the political process, and we're off and running?”
“It really has, and there's no better example than an increase to $15 in the minimum wage, which would end up putting a lot of these hotel and restaurant workers out of business,” Roth said. “That's one major problem, but I think it's symptomatic of the whole bill. If we really want to help people who have lost their jobs, and this is something that we need to do because in many parts of the country, these workers are not allowed to go to their jobs because of their closures... then why do we want to put on a $15 minimum wage, which is going to hurt them and deprive them of their jobs?”
“Obviously it's hard to argue against an increase in wages for folks, but not unlike most other things in life - timing is everything, right?”
“Right. And the congressional budget office calculated that 1.4 million people would lose their jobs if the minimum wage were raised!” Roth said. “Besides it's up to states to raise their minimum wages, depending on the costs and the circumstances within their states. And we've seen that many states have raised their minimum wage. The question is whether this is a role for the federal government to be deciding for every state in the United States.”
“Tell us how it would look otherwise,” Newell continued. “I've heard a number of different plans about regions that are doing it on a state by state basis. I mean, we know here in New Orleans, our cost of living is far less than it is in Seattle, Los Angeles or San Diego.”
“Exactly,” Roth said. “Many of these on the coast have already raised their minimum wages to $15 an hour. So this would basically be hitting those states that have chosen not to do it and that have lower costs all around. So that's one major problem. Another problem is that there are just a lot of other things in the bill that are not necessarily important right now to targeting the people who need help.”
Hear the entire interview in the audio player below.
