OECD backs Biden’s plan to increase the minimum wage

April 15, 2021: -On Wednesday, the Organization for Economic Cooperation and Development said the U.S. should go forward with a plan to raise its federal minimum wage to help with a more inclusive recovery from the coronavirus crisis.

President Joe Biden wants to raise federal employees’ minimum salaries to $15 each hour, and an executive order in this sense could come in the future weeks. According to, it is critical to support low-income earners for who the pandemic has more severely impacted OECD.

“This is particularly the case in the U.S, where increasing the federal minimum pay is the top priority. Recent evidence suggested that raising the minimum pay to 59% of the median wage has a little negative impact on employment,” the institution of Paris said.

The U.S. minimum wage has been $7.25 per hour since 2009. Small business owners have said that they plan to increase pay would be a burden at a difficult time for them.

On the other hand, some worker rights groups have argued that Biden should do more, including stepping up protections for those with disabilities and better-enforcing workplace rights to reduce discrimination. The OECD added that the U.S should go further in improving labor market conditions.

This is meant to support workers’ mobility, provide training programs, and reduce red tape for people with criminal records searching for obtaining occupational licenses.

On Wednesday, Laurence Boone, the Chief economist of OECD, told CNBC that “We need to make our economies more resilient; we need to make them more inclusive.”

She also said that it is important to “focus on those people that are left behind.” According to forecasts from the International Monetary Fund, the U.S is seen growing at a pace of 6.4% this year, which shows that it is on track to surpass its pre-pandemic GDP levels this year.

But new labor market-friendly policies could limit the scarring effects of the crisis and lead to more employment. The IMF projected an unemployment rate of 8.1% for the U.S. in 2020, followed by 5.8 % in 2021.