The increase in the federal hourly minimum wage will wait. The Democrats, at the end of February, gave up adopting the increase from 7.25 dollars (6 euros) to 15 dollars wanted by President Joe Biden, for lack of a sufficient majority in the Senate. Congress experts ruled that not a simple majority was needed, but a qualified majority of 60 out of 100 senators.
Long negotiations will begin in favor of a smaller increase – perhaps 11 dollars – but the affair will not have the magnitude advocated for years by the Democratic left. If less than 2% of employees are at the federal minimum wage, unchanged since 2009, its increase to 15 dollars would ultimately have affected 15% of the working population and, above all, would have radically changed the situation in the rural states of the poorest, Alabama, Montana, affecting more than a quarter of workers.
It was too much for Republicans, who do not want such a measure in times of unemployment, and for those who fear a resurgence of inflation. Democrats are now focusing on the fiscal aspect of the Biden plan alone; approved by the House of Representatives, it must be adopted in the Senate, where the Democrats have a majority only thanks to the vote of the Vice President of the United States, Kamala Harris.
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This plan, of 1.9 trillion dollars, or nearly 10% of gross domestic product (GDP) is hotly contested, especially among renowned Keynesian economists, Larry Summers, former Treasury secretary to Bill Clinton, and Olivier Blanchard, ex -Chief Economist of the International Monetary Fund (IMF). This plan has two components: one intended to help the poorest and local authorities – it is little contested; the second aims to send a check for $ 1,400 to every American earning less than $ 75,000 a year. This measure is considered unnecessary – it does not help the poor – and will inflate the income of the middle classes, which has however increased sharply in 2020, due to the massive aid decided by the Trump administration and the forced savings during this period. pandemic.
But Joe Biden is caught up in a political narrative, which suggests that there has been no solidarity under Trump – which is wrong – and describes America as if 2021 was the year of the pandemic, when it is the year of the economic and health rebound – the number of new cases of Covid-19 has more than divided by three since the beginning of January.
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