Online Originals: Economist weighs pros and cons of another COVID-19 relief bill

Politics

GREENVILLE, N.C. (WNCT) — “I’ve never seen the federal government intervene in an economic crisis like I have right now,” says Michael Walden, an economist at North Carolina State University.

Walden believes the government is stepping in due to COVID. 

“I think the rationale for that is, this recession that COVID created was unlike any recession we’ve had before. All recessions we’ve had before have been caused by, maybe some dislocation in the financial markets, maybe in the energy markets,” Walden said. 

Congress will hold votes on the American Rescue Plan, President Joe Biden’s 1.9 trillion dollar response to the pandemic. 

“I think you can make a strong case that maybe half of the 1.9 is fairly well supported by monies that need to go to workers who lost their jobs, help businesses get back on their feet, stimulus checks for the population, etc.,” Walden said. 

Economists say government aid is necessary to keep people off the streets during the pandemic. But they point out this package includes money that doesn’t directly impact issues of the pandemic. 

“Some say that this is simply bailing out some states, not North Carolina. There are some examples of infrastructure projects that even the most lenient definition of COVID relief probably would not include these,” Walden said.

They include infrastructure projects in states like California and New York. Those are states represented by key lawmakers, including House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer.  

“Even though there may be valid reasons for these, we should debate these a part from a COVID relief bill,” Walden said. 

The house version of the Relief Plan includes a proposal to raise the federal minimum wage to $15 an hour, a policy with benefits and drawbacks. 

“If you kept your hours and you kept your job, you’re obviously going to be better off,” Walden said. 

Raising the minimum wage could help people pay their bills. But many small businesses have little room for big changes in wages. Increasing the minimum wage would cause some to shut down or cut employees, or go in a different direction. 

“The question is, will employers, maybe not initially say, ‘huh, I can do this job with technology or machinery’ …or ‘I’m going to hire someone with more experience and more capabilities, where the higher minimum wage makes sense’,” Walden said.

Walden also said there’s room for compromise 

“Rather than forcing businesses to raise the wage they pay low wage workers, have the federal government provide that money, have the federal government subsidize it,” Walden said. 

Having some tax revenue make up for part of the minimum wage could be a solution. 

“If we as a collective society want to see minimum wage workers do better, we should be willing to do that through the taxes we pay,” Walden said.

=====

Follow Victoria Holmes on Twitter @vicanthol

Stay up to date at Facebook.com/VictoriaHolmesTV

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

LKQD Outstream

Trending Stories

news-app-download-apple-350x50news-app-download-android-350x50