Minimum Wage Levels in US Slammed by—of ALL Organizations—The International Monetary Fund

Rally to raise the Minnesota minimum wage in St. Paul, Minnesota - Feb 25, 2014.
(Photo by Fibonacci Blue)

The US, which prides itself as being a great economy with a "great big middle class" (ha-ha) ranks 11th among members of the Organization for Economic Cooperation and Development (OECD).


By Annie-Rose Strasser
The United States is facing new international pressure to raise its minimum wage. In its annual review of the U.S. economy released on Monday, the International Monetary Fund criticized America for wages that are both historically low and lower than other countries, and it called on the U.S. to raise its wages accordingly.

Addressing the U.S.’s persistently high poverty rates, the report lauds the U.S.’s expansion of health care coverage thanks to the Affordable Care Act, then argues for two separate policy fixes to further aid in the reduction of poverty: expanding the Earned Income Tax Credit (EITC) to cover more low-income people and raising the minimum wage.

“An expansion of the Earned Income Tax Credit—to apply to households without children, to older workers, and to low income youth—would be [an] effective tool to raise living standards for the very poor,” the report states. “Similarly, the government should make permanent the various extensions of the EITC and the improvements in the Child Tax Credit that are due to expire in 2017.

“[G]iven its current low level (compared both to U.S. history and international standards), the minimum wage should be increased,” it goes on. “This would help raise incomes for millions of working poor and would have strong complementarities with the suggested improvements in the EITC, working in tandem to ensure a meaningful increase in after-tax earnings for the nation’s poorest households.”

The U.S. ranks 11th of OECD countries in minimum wage, when measured as a percentage of median income.

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