Janet Yellen’s response to job losses from minimum wage increase ‘disappointing,’ Sen. Tim Scott says

Business

Sen. Tim Scott, R-S.C., slammed President-elect Joe Biden’s Treasury Secretary nominee, Janet Yellen, for giving a ‘disappointing’ answer Tuesday on the impact a $15 federal minimum wage would have on small businesses that are already struggling during the coronavirus pandemic.

“I asked @JanetYellen how raising the minimum wage to $15 affects the millions of #smallbiz on the brink of closing,” Scott tweeted Tuesday. “Her answer was disappointing & didn’t mention the 3.7 million jobs [email protected] estimates will be lost. I’ll fight to protect businesses from these damaging policies.”

Yellen argued during her confirmation hearing on Tuesday that Biden is proposing a $15 federal minimum wage because there are “millions of American workers who are putting their lives on the line to keep their communities functioning” and that working multiple jobs isn’t enough for Americans to put food on the table and keep a roof over their head.

“They’re suffering in countless ways especially during this pandemic and really struggling to get by and raising the minimum wage would really help many of those workers and thats the reason for doing it,” Yellen said.

The former Federal Reserve chair noted that researchers “often look at what happens if one state raises its minimum wage and a neighboring state leaves it alone to see how businesses fare in the two different places with different treatments.”

“The findings are that the job loss is very minimal, if anything,” Yellen said. “So I think that the likely impact on jobs is minimal, that’s my reading of the research.”

One study published by the University of California Labor Center suggests that the $15 federal minimum wage could help boost the nation’s economy, noting that the country’s current low minimum wage costs taxpayers more than $100 billion a year because nearly half of working families rely on government programs such as Medicaid or SNAP.

Florida made headlines in November when voters approved a measure that would gradually increase the state’s minimum wage to $15 per hour by 2026. California, Connecticut, Illinois and Maryland are among other states that have also approved their own pathways to phase in a $15 per hour minimum wage.

Besides her push for higher wages, Yellen cited the ‘critical importance’ of helping small businesses and expressed appreciation for the fresh round of funding passed for the Paycheck Protection Program in the recent $900 billion COVID-19 relief package.

“I pledge that we will do everything we possibly can to get that money out to struggling businesses,” she added. “It is critically important to help those businesses. The money that’s been allocated to CDFI’s to support them and their lending, especially in low and moderate income communities, that’s critically important aid and President-elect Biden has proposed yet more aid to these businesses so that they can survive this pandemic and get back on their feet.”

Republicans like Finance Committee Chairman Chuck Grassley, R-Iowa, have blasted Biden’s $1.9 trillion package proposal, calling the plan a ‘laundry list of liberal structural economic reforms.’

They also argue that enough money has already been spent on economic stimulus and expressed concerns for the United States’ growing deficit and debt. Last year, the gap between what the government spent and what it collected climbed to a record $3.1 trillion.

However, Yellen urged lawmakers to reconsider, arguing that now is the time for Congress to ‘act big.’

“Neither the President-elect, nor I, propose this relief package without an appreciation for the country’s debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big,” Yellen said. “In the long run, I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time.”

In addition to a federal minimum wage increase, Biden’s proposal includes a one-time $1,400 stimulus check for the American people, extended unemployment benefits through September, funding to accelerate vaccine distribution, a $15 billion grant program separate from the Paycheck Protection Program, and a $35 billion investment in some state, local, tribal and non-profit financing programs that can provide low-interest loans and venture capital to help small businesses.

Yellen, who led the Federal Reserve from 2014 to 2018 after being appointed by Former President Barack Obama, would be the first woman to lead the Treasury Department since the institution was established in 1789. She is expected to win quick Senate confirmation, with Sen. Ron Wyden, D-Ore., saying he hoped she could be confirmed by the full Senate as soon as Thursday.

Her nomination was supported in a letter from eight previous Treasury secretaries, who served both Republican and Democratic presidents.

Yellen’s financial disclosure forms reveal that she listed more than $7 million in speaking fees from several top Wall Street firms, including Goldman Sachs, Bank of America, Google and Salesforce since she left the Fed. She has agreed to recuse herself from Treasury matters involving certain financial institutions.