Effects of a Living Wage Program on the Cleaning Industry
Besides the coronavirus pandemic, inflation has been the most discussed topic in the news. Rapidly rising prices are causing economic hardship for Americans, including business owners who cut their budgets when buying supplies.
Although most people believe the federal government should do something to help bring inflation under control, economic experts worry about the solution — raising interest rates —could do more harm than goodreports CNN.
According to January’s consumer price index, overall prices have jumped 7.5% over the past year, the fastest pace in nearly 40 years. The sharp rise has led to calls for the Federal Reserve to take tough action, such as raising interest rates by half a percentage point, the first time since 2000.
However, some economists believe that this action would be a mistake because the slowing economy could lead to job losses at a time when more jobs are needed. Even with the best year of economic growth and employment earnings for decades, the economy still has 2.5 million fewer jobs than before the pandemic. Employers must continue to hire and end the current labor shortage. But higher interest rates lead to a slower economy and less job creation. These job losses are often in the lowest-income segment of the workforce, such as cleaning staff and other front-line workers.
“The people you recruit into the fight against inflation when you raise interest rates and slow the economy are the most vulnerable,” said Robert Reich, former US Secretary of Labor and professor of public policy at the Institute. University of California at Berkeley. “The purpose of raising interest rates is to air the veils of the economy. If it works, you will by definition have fewer jobs. Even small increases in interest rates, if they have the desired effect, will result in lost jobs and lost wages.