OECD backs Biden minimum wage hike, says it would boost pandemic recovery

The Organization for Economic Cooperation and Development (OECD) on Wednesday came out in support of President Biden’s plan to raise the federal minimum wage, arguing that it will boost the United State’s COVID-19 recovery.

The OECD, an international organization focusing on policy building, made the recommendation in its Going for Growth report. The institution said that raising the minimum wage would ensure decent incomes for low-income workers.

“In several advanced economies, the pandemic and ongoing labour market changes … brought the issue of minimum wages to the fore, as a means to ensuring decent incomes of the low income workers,” the OECD wrote.

“This is particularly the case in the United States, where raising the federal minimum wage is among the top priorities,” it continued. “Recent evidence suggests that increases of the minimum wage up to 59 percent of the median wage have little negative impact on employment.”

In the report for the U.S., the OECD wrote that increasing the minimum wage, along with paid parental leave, expanding earned income tax credits and investing in quality child care will help increase participation in the labor market.

“Raising the federal minimum wage would both incentivize participation and help to ameliorate earnings inequalities,” the OECD wrote.

The report comes as Biden signed an executive order on his second day in office ordering the Office of Personnel Management to provide recommendations for raising the minimum wage for federal employees.

Democrats also pushed to raise the minimum wage to $15 an hour in the latest round of coronavirus stimulus, up from $7.25 an hour — a figure that has been in place since 2009. 

The measure became a sticking point for Republicans and moderate Democrats like Sen. Joe Manchin (W.Va.), who opposed the wage hike. 

In addition, the Senate parliamentarian ruled that the language of the provision went against the chamber’s budget reconciliation process.

An attempt to waive a procedural objection to adding the amendment later failed, with seven Democrats and one Independent joining all Republicans against it.