IMF Wants US to Raise Wages
World Economy

IMF Wants US to Raise Wages

IMF Managing Director Christine Lagarde has weighed in on a range of topics from the global economy, the US job market, the Syrian refugee crisis and Britain’s potential exit from the European Union.
“The trends are a little bit on the downside and what is most concerning is that we see risks likely too high on the horizon and bigger.  And those risks are the Chinese slowdown in growth, the low commodity prices for longer and the financial tightening we are seeing as a result of monetary policies across the globe, producing this effect both on exchange rates and on monetary policies,” Lagarde told the Fox Business Network about the state of the global economy.
Lagarde weighed in specifically on the state of the US economy.
“We believe that having 50 million Americans living in poverty, 40% of whom actually have a job is not particularly satisfactory.  And with growth being, not low, but not particularly high in the US.  You know north of 2% is okay but it is not great,” said Lagarde.
She then discussed how raising the minimum wage could potentially boost US economic growth.
“And with the job market where it is, we believe that it’s time to actually look at those minimum wage issues with a view to increasing growth, with a view to producing a demand effect in the short term and hopefully supporting the economy,” Lagarde said.

  Plus Side
With the influx of Syrian refugees to Europe, Lagarde discussed the potential economic implications and why it could be an economic benefit if handled correctly.
“Difficult to say because it’s a bit early on to actually measure the economic impacts of these million plus refugees coming into Europe, predominantly in Germany.  But our study shows that if there is good integration, meaning language training, skills retraining eventually, housing support facility to enter the job market, the benefits can be quite significant. We figure that it would be a plus 0.2% of the whole of the eurozone and plus 0.5% for Germany alone,” she stressed.
But despite the potential long-term economic benefits, Lagarde pointed to the short-term humanitarian crisis that needs to be addressed.
“It’s first and foremost a massive humanitarian challenge that the Europeans are facing at the moment which needs to be addressed everywhere,” Lagarde said.
Lagarde then weighed in on the potential implications if Britain leaves the European Union.
“It’s hard to say for me now, because we are currently completing the study of that particular project.  But it’s very likely to be a net negative and a big concern because it’s uncertainty, it opens the door to what will be the next regime in place for trade between the UK and the rest of the European Union. What will happen to the financial center of London if it works in isolation relative to the continent?  Those are unanswered questions which open big uncertainties,” said Lagarde.

Short URL : http://goo.gl/mBDCq0
  1. http://goo.gl/96ur7p
  • http://goo.gl/1rNdwO
  • http://goo.gl/sEKQvj
  • http://goo.gl/4zqUWb
  • http://goo.gl/H7YORI

You can also read ...

Report says China’s economic development must rely on integration between innovation and industrial production,  and work must be done to ensure that innovation progress was passed on to production.
China's new economy will account for an estimated 12% of the...
The process of building a new government could take weeks, so markets may well move on from the result quickly.
Politics dominated trading on Monday, with the euro sliding as...
World countries are casting a shadow on the future of the global economic system.
Next month, when finance ministers and central bank governors...
The economy’s return to growth has eased pressure  on the authorities.
Now that Nigeria’s economy is recovering from its worst slump...
One mining services company said it laid off more than 50 employees.
New laws and a crackdown on mining firms in Tanzania has...
EU Seeks Protection for Uber-Style Jobs
The European Commission said on Monday it wants more social...
US to See Slower Growth
The pace of US economic growth will stay stuck in the low 2%...
The Housing Pulse rose again, as the shortage of supply and increasing demand for properties continues to bite.
Bank of Ireland’s monthly Economic Pulse report, which...