to cross the finish line.
This week’s Houston newsmakers.
>> KPRC 2. This is Houston
newsmakers with khambrel
Marshall.
>> An increase in minimum wage
has been a goal of Democrats for quite some time and now
for quite some time and now
that they have House and Senate
majorities they want to make it
happen proposal to raise the
minimum wage to $15 an hour was
passed as part of the covid
stimulus bill it will not be
part of the Senate negotiation
but it’s still a big part of
the conversation. But what you
we believe is a good. For some
while many of the jobs of
others how much is too much.
Doctor Joyce BB is has a phd in
economics is a fellow in public
finance at the Baker Institute,
a public policy at Rice
University doctor B B. Thank
you so much for joining us and
helping bring out some of the
facts of this topic, we’ll have
that the the politicians argue
about some of spin but first of
all the proposal for the $15
minimum wage it’s going to be
phased in over several years
what impact would that phase in
process have on the overall
economy do you think.
>> overall the proposal was
that is that it’s going facing
with being a 5 year period, the
current proposal of ours that’s
a be on Congress as well, the
first increase is going to take
place in June this year and by
2025 is going to totally for a
Santa to $15 minimum wage not
coach so that is trying to
reduce their wines hard impact
say that’s just raise it in
newly to overall. They’re
different reactions to this
policy so the supporters
basically said that well you
know over the last 10 years we
had never adjusted the federal
minimum wage that was putting
in place in 2000 I H and look
at all the states there’s more
than half of the states and
Washington DC already increased
their minimum wage. So they see
this as the validation back
this is really a policy that we
need to consider because if and
no wage worker all this year’s
what you’ll see is Romney is
becoming more expensive housing
utility and all clothing
everything but my wage has
never teen chicken The
Congressional Budget Office has
said that okay if we do this
$15 proposal.
>> that jobs will be lost they
estimate one 0.4 million will
be lost. They also say the
people in poverty would be
reduced by 900,000 or so so if
that is what I do I guess
people have to weigh what’s
more importantly that’s the
reality was that good can the
CBO numbers be trusted.
>> CBO is basically the
research arm for the current
Congress and on it produces the
nonpartisan research result
doesn’t really draw any
conclusions is so the U.S. to
discuss you just mentioned
directly can cross CBO and
people would look at that
number basically said well
minimum wage is a good policy,
but it’s not a magic policy
that way strict get rid of all
the problems in some ways Help some people other property but
some people other property but
it creates not not employ issue
that you just mentioned like
you mentioned people move to
waive the differences and
what’s the consequences so hard
it was comical how her
economist do that how the
economy’s weigh the pros and
cons of something like that.
So what the CBO does is it
Congress as they ask who will
be bearing the burden off this
policy how much does the birds
and bees. They say well
directly you will feel the
impact that business owners
will feel the impact so not
only that consumers will feel
the impact as well so business
owners directly will see their
labor costs increased obviously
and all of what they would do
is they have one or 2 choices
they would say well I’m going
to observe part of that cost
myself so my business profit
will probably go down. A second
option they have is they were
increased the product price for
their service price of beer in
customers. So as a We are all consumers so to a certain
consumers so to a certain
extent we will see the price
increase as consumers. higher
income households, annually
spend more money in dollar
terms when they make their
consumption decisions higher
income households are likely to
bear more of the burden and
already come how so although
the lower income households
will also bear the burden
because they spend. Higher
portion of their income on the
dollar turned lower in terms of
consumption.
>> So a lot of folks to talk
about what you know we get this
real big budget deficit.
And I’ve heard many people talk
of well, the deficit is not
that big of a deal right now
because the interest rates are
low. But I’ve also heard
conversation about that that.
Why the interest rates are low
now if we have higher wages and
the money with the stimulus
package in flow that will in
turn maybe increase interest
rates as well is there anything
to do that.
>> the most direct impact for
the minimum wage increase is
going to filled by business
owners and consumers. In terms
of the impact of this policy on
government program, it’s mostly
likely to be increasing some
government expenditure back
decreased objects. is people
have higher wages, they will
last likely to use the benefits
such as food protection, our
food assistance program so that
part is going to be lower some
kind of a tax expenditure
programs like earned income tax
credit had Nets have really
rely and I was lower income
households. We’ll also be
increased because people have
higher wages how ever. Other
parts of the program like
Medicare Medicaid got the name
sponsor Tom Coghlan invented
the program will increase as a
result of the unemployment, so
overall government expenditure
is going to slightly increase by about 5 billion dollars a
by about 5 billion dollars a
year based on the CBO
projection. But overall the