Dennis Jansen Speaks on Stimulus, Minimum Wage on KBTX

Jan 28, 2021
Summary: On Monday, January 25, 2021, Director Dennis Jansen spoke to KBTX on President Biden’s proposed changes to the minimum wage, as well as a new round of stimulus checks.
 
President Biden has proposed an increase to the federal minimum wage from the current $7.25 to $15, a change that could have drastic effects on local businesses. Jansen said, “The $15 per hour minimum wage would put a very large hardship on some local businesses. In some areas of the country, $15 per hour wage won’t be that much of a constraint – the starting jobs are close to $15 already – and that may be true in the Austin area, but that’s not true here. $15 is not the starting wage for many local businesses. More generally, this huge increase in the minimum wage will provide an equally large incentive for businesses to innovate away from hiring workers and towards automated systems.”
 
The beginning of the President’s term has also seen a rising, although turbulent, stock market. Looking ahead, Jansen shared “the stock market will be looking for what President Biden intends for the COVID- [19] relief bill in the intermediate-run. In the long run, I think the stock market will be influenced by President Biden’s plan to pay for the spending that we’ve done in 2020 and 2021, including by his predecessor, as well as his intentions on various regulations on corporate taxation.”
 
The merits of a new stimulus package that includes another direct payment to individuals is also currently being discussed by legislators. “To think about this issue, I think we sort of have to decide what we do think is the purpose of this COVID-[19] relief bill, and I think its purpose should be to help those who have lost their jobs or income and to supplement state unemployment benefits to some extent, to aid businesses who have been negatively impacted by government-imposed restrictions on their operations, maybe to aid those who have been  saddled with extra expenses and to encourage people to spend money in industries that have been hard hit such as restaurants and bars, and maybe retail establishments. The first relief bill in the spring of 2020 was poorly targeted with respect to these objectives…But it’s early 2021 now, it’s 9 months later, and we’re planning much the same. The unemployment supplements might not be as large, but the untargeted stimulus checks remain, and I think we should ask, ‘Why?’ We’re sending checks to folks who have not suffered large economic harm from the pandemic…we’re sending checks broadly and to those who aren’t going to spend them.”
 
See the full interview on KBTX news here.