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Employers now project hiring 4% more new college graduates than they did from the class of 2022, down from earlier projections.
Opportunities and pay vary greatly by location.
San Jose, California, has the highest rate of new grad hiring and the greatest potential to earn six figures, according to a new report.

Hiring outlook slows for new college grads

Overall, job prospects look relatively positive for the class of 2023. Employers plan to hire about 4% more new college graduates from this year’s class than they hired from the class of 2022, according to a report from the National Association of Colleges and Employers, or NACE.
Although that’s down significantly from earlier projections, “there’s still a lot of opportunity out there,” said Kevin Grubb, associate vice provost of professional development and executive director of the career center at Villanova University.
Many undergraduates are giving themselves a head start, he added. “Students have become more motivated and eager to be ready for their career search early on,” Grubb said. “Usually over half have done an internship, which does help them in the labor market when they finish.”

This year’s college seniors are also quick to jump on opportunities: 62% have already accepted their first job after college, compared with only 20% from the class of 2022 this time last year, according to a separate report by LaSalle Network.  

Where new grads get the best bang for their buck

Photo by Mark Scott via Getty Images

Some companies, in industries such as technology, have pulled back given the current economic uncertainty, according to new data from payroll provider Gusto.
However, there are still pockets of growth, mainly in personal service industries such as retail and food and beverage, along with health care and education, Gusto found. NACE also identified significant upswings in transportation and chemical and pharmaceutical manufacturing.
Of course, opportunities and pay also vary by location. San Jose, California, has the highest rate of new grad hiring and the greatest potential to earn six figures, according to Gusto’s report.

Adaptability and flexibility is going to be key.

Luke Pardue
economist at Gusto

But “when you adjust for cost of living, there may be more value in other cities such as Houston, Philadelphia, Austin, Atlanta and Dallas,” said Luke Pardue, an economist at Gusto.
In fact, salaries in Houston stretched the furthest while New York was the least affordable city overall.
“Adaptability and flexibility is going to be key,” Pardue said.
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Strong consumer spending has promoted modest economic growth in the U.S. in 2023.
Indicators like saving rates and credit use suggest that households may soon rein in their budgets.
A recession is not certain or imminent given the current outlook.

Economists have been forecasting a recession for months, and that looming downturn is one of the most anticipated in U.S. history. But it’s not yet materialized, in part due to strong consumer spending.
“Consumer spending represents more than half of the economy,” said Curt Long, chief economist at the National Association of Federally-Insured Credit Unions. “So if consumer spending is strong, that alone is, generally speaking, enough to keep the economy from slipping into a recession.”

In the first quarter of 2023, gross domestic product grew at a 1.1% rate compared to the previous quarter. This modest level of growth is an improvement from mid-2022 GDP figures, which initially brought recession fears to light.
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A key reason for the fear: Inflation stayed stickier than economists anticipated. In May, the U.S. Bureau of Labor Statistics reported headline annual inflation of 4.9%.
To combat inflation, the Federal Reserve has hiked its overnight bank lending rate 10 times over the past year or so. At the Fed’s May meeting, policymakers hinted that they may pause further interest rate increases, barring unexpected developments.
The end of this tightening cycle may be coming into focus as consumers reach their breaking point. As the pandemic fades, historic levels of personal saving have taken a nosedive. Deposits at banks have crested as consumers keep spending amid continually rising prices.

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This is happening as the least well off are increasingly relying on credit in their day-to-day lives. Roughly 29% of households earning less than $50,000 a year were using credit cards to finance their spending, according Bank of America Institute economists. Credit-use rates have risen steadily in recent years despite being below higher pre-pandemic levels.Moderate-income Americans also are facing the significant headwind of less tax-refund money. The average refund this year is $2,777 through April 28, down 8% from the same period last year, according to IRS data.
“Because this is the same household that rely more on the tax refund to finance their spending, a lower refund really has some negative impact on their spending,” said Anna Zhou, an economist at the Bank of America Institute.

Analysts at the New York Federal Reserve report record levels of credit card debt in 2023. This underscores the economic split in the country, with some consumers flush with savings following a thrifty pandemic while others are finding it increasingly difficult to spend wisely amid rising prices, mounting layoffs and the potential of recession.
Still economists see the chance for a soft landing. “We don’t think … the slowdown process will be as dramatic as some people have feared,” said Zhou. “And it will be a gradual process.”
Watch the video above to learn how U.S. consumer spending has so far fended off a recession. More

Generative AI models have already been implemented in technical roles, such as financial analytics and drug development, as well as more human-facing sectors such as customer service and marketing. 
Amid the quick rise and implementation of AI across sectors, some investors are concerned that the potential ESG downsides haven’t been adequately considered and safeguarded against. 

Userba011d64_201 | Istock | Getty Images

Wall Street has eagerly rallied around companies making notable strides in artificial intelligence. However, several investors warn that the increasingly widespread deployment of AI has opened a Pandora’s box of concerns about environmental, social and corporate governance, or ESG.
Generative AI models — ChatGPT being the most prominent example — have already been implemented in technical roles, such as financial analytics and drug development, as well as more human-facing sectors such as customer service and marketing. 

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Amid the quick rise and implementation of AI across these industries, some investors worry that the potential ESG downsides haven’t been adequately considered and safeguarded against. 
Investors have called for more transparency and data from companies on how they’re using and investing in the new technology. The current lack of sufficient data from U.S. companies means the space is currently “the Wild West,” as described by Thomas Martin, a senior portfolio manager who runs ESG strategy at Globalt. 
“If you’re an ESG-focused investor, you’re dependent on the information that you get. The companies aren’t providing that yet, except the things that will make you imagine things. You can’t base an evaluation based on something you’re imagining, or don’t know if it’s true or accurate, or when it’s coming,” Martin said. “There has to be information that’s out there that comes from the companies themselves and how they’re using [AI].”

Lack of transparency and safeguards

Investors and analysts have noted that ESG regulatory guidelines for AI are notably laxer in the U.S. than in the European Union and in Asia. Meanwhile, in South Korea, the government’s post-Covid Digital New Deal initiative includes national guidelines for AI ethics to promote ethics and responsibility when developing artificial intelligence. 
Researchers have also sought to quantify fairness and bias in AI models through various socio-ethnic parameters. For example, Stanford University’s artificial intelligence index report scores for bias across AI models. It found a “counterintuitive” correlation between fairness and bias: models that scored better on fairness metrics demonstrated stronger gender bias, and less gender-biased models were more toxic.

Technology’s moving so quickly, and I think this is the most disruptive from a social fabric standpoint. It’s actually pretty damn scary. And I’m an engineer by trade, and I’ve been doing this for 30 years. … You know, what I do for a living can probably be replaced in two to three years.

Ted Mortonson
managing director, Baird

Ted Mortonson, managing director at Baird, warned that he sees AI in a similar position to where bitcoin was a few years ago, noting that the U.S. regulatory framework is “not set up for very extreme technology advances.” He added Microsoft CEO Satya Nadella’s comments during the company’s earnings call that it has “taken the approach that we are not waiting for regulation to show up” did not bode well.
“For my clients, that rubbed a lot of people the wrong way. Because this is a social issue,” he said. “I mean, if the [Federal Reserve] wants unemployment to go up and a weakening economy, generative AI is going to do it for them.”

Assessing ESG impacts

While there is no standardized methodology to quantify the exact ESG impacts of a given AI-related investment, there are certain considerations investors can take. 
Morgan Stanley created a three-pronged approach on AI-ESG-driven investments: 

Assessing how an AI investment can reduce harm to our environment — such as by driving energy efficiencies, preserving biodiversity and reducing waste. 
Examining how AI enhances people’s lives, such as by improving interactions between people and businesses. 
Driving AI technology advancements — being a “key player or enabler across the AI ecosystem to make businesses and society better.” 

The firm characterizes the first two as likely requiring a low to a high level of effort from investors. It notes that the final step likely requires a high level of engagement. 
Some investors believe AI itself can help investors monitor and track ESG efforts by companies. Sarah Hargreaves, head of sustainability for Commonwealth Financial Network, said AI could be particularly useful for investors to compare the environmental impacts of their investments alongside current and forthcoming regulatory standards.
“I’d also think that AI’s ability to manage and optimize relative ESG data would be particularly relevant for investors looking to delineate between dedicated ESG investments versus those subject to greenwashing,” she wrote in an email to CNBC.  
Baird’s Mortonson also mentioned that tech companies themselves could make AI-ESG analysis easier. He noted that databases and cloud-based companies such as ServiceNow and Snowflake are “incredibly well positioned with Next Generation AI” to release accurate and detailed ESG data given the significant amounts of data they store.

Employment obsolescence

As AI gains more capabilities and becomes more widely implemented, concerns over job displacement — and potentially obsolescence— have emerged as some of the biggest social concerns. 
The Stanford report, which was published earlier this year, found that only 18% of Americans are more excited than concerned about AI technology — with the foremost concern being “loss of human jobs.” 
Additionally, a recent study by professors at Princeton University, the University of Pennsylvania and New York University suggested that high income, white-collar jobs may be the most exposed to changes from generative AI. 
The study added that developing policy to help minimize any disruptions stemming from AI-related job losses “is particularly important” as the effects of generative AI will disproportionately target certain occupations and demographics. 
“From a social standpoint, it will impact employment, both blue-collar and white-collar employment, I would say materially in the next five to 10 years,” Mortonson said.
Globalt’s Martin sees such losses as part of the natural cycle of technological advancements.
“You can’t stop innovation anyway; it’s just human nature. But it frees us up to do more, with less, and to foster growth. And AI will do that,” said Martin.  
“Are some jobs going to go away? Yeah, most likely. Will aspects of jobs get better? Absolutely. Will that mean that there will be new things to do? That even the people who are doing the old things can do and move into and migrate into? Absolutely.”
Mortonson was less sanguine. 
“The genie’s out of the bottle,” he said, noting that companies are likely to embrace AI because it can boost earnings. “You just don’t need as many people doing what they’re doing on a day-to-day basis. This next generation of AI [is] basically bypassing the human brain of what a human brain can do.”
“Technology’s moving so quickly, and I think this is the most disruptive from a social fabric standpoint. It’s actually pretty damn scary. And I’m an engineer by trade, and I’ve been doing this for 30 years,” he said. “You know, what I do for a living can probably be replaced in two to three years.” More

Social Security beneficiaries saw the biggest cost-of-living adjustment in 40 years for 2023.
But as inflation subsides, next year’s benefit increase may not be as generous, a new estimate finds.

Bernardbodo | Istock | Getty Images

Benefits’ buying power dropped 36% since 2000

The Senior Citizens League also evaluated how well Social Security benefits have kept up with rising costs and found they have fallen short.
Over the past year amid persistent high inflation, eggs were the fastest-growing cost for seniors, based on the group’s analysis of Bureau of Labor Statistics data through February. Other categories that landed in the top five fastest growing costs include apples, bread, coffee and dental visits.
Since 2000, Social Security benefits have lost 36% of their buying power, according to The Senior Citizens League’s calculations.
To be able to live as well on Social Security benefits as beneficiaries did in 2000, today’s retirees would need an extra $516.70 per month, the nonpartisan senior group found.
The updated analysis of the loss in buying power — measured from January 2000 through February 2023 — improved from a 40% decline found in last year’s study. Yet the slightly improved 36% loss in buying power is still one of the deepest losses recorded, according to the group’s analysis.
Eggs also topped the list of fastest-growing costs for seniors since 2000. Other categories in the top five include prescription drugs, heating oil, dental services and Medicare Part B premiums.
One caveat to a record high cost-of-living adjustment this year is the extra money — estimated to be more than $140 per month — may help prompt higher levels of spending among older Americans, according to research from Bank of America Institute.
While higher spending may complicate the fight against higher inflation, it is delayed relief for older Americans, whose cost-of-living adjustment was lower than price growth in 2022.
“The average retiree has found living with these high rates of inflation extremely difficult,” David Tinsley, senior economist at Bank of America Institute, previously told CNBC.com. More

These days, parents are paying nearly half of college costs.
Although parents are shouldering most of the responsibility, there are ways students can chip in and help their parents avoid taking on too much debt, higher education experts say.
There is plenty of merit-based aid available and free scholarship matching services to help students.

Kevin Dodge | The Image Bank | Getty Images

College is one of the biggest purchases you’ll make in a lifetime, yet few families have a solid plan for how to pay for it.
Most often, parents are on the hook for the bill, according to Sallie Mae’s annual How America Pays for College report. For the 2021-22 school year, parents covered 43% of the cost of college with their income and savings, while students picked up about 11%. But students can contribute in other ways too, experts say.

“Given the cost of college, parents paying for their children’s college education is the norm these days, not the exception,” said Kalman Chany, a financial aid consultant and author of The Princeton Review’s “Paying for College.” 
“Nevertheless, students and their parents need to plan ahead and be savvy about the financial aid process.” 
More from Personal Finance:4 strategies to avoid taking on too much student debtThese moves can help you save big on college costsHow to understand your financial aid offer

Who pays for college and how

Most students and their parents rely on a combination of resources, Sallie Mae’s data shows.
As of the latest tally, families spent $25,313, on average, on college expenses in the 2021-22 academic year, primarily by tapping into their income and savings. More than 7 in 10 families also used scholarships and grants — money that does not have to be repaid — to help cover the costs, and roughly 4 in 10 families borrow, or take out loans, the education lender found.

Arrows pointing outwards

As the cost of a degree continues to rise, price has become a bigger consideration.
College-bound students and their parents now say affordability and dealing with the debt burden that often goes hand in hand with a college diploma is their top concern, even over getting into their first-choice school, according to The Princeton Review’s 2023 College Hopes & Worries survey.

Maximize ‘other people’s money’

It is always better to use “other people’s money,” Chany said, referring to financial aid, to minimize out-of-pocket costs and avoid taking on too much student debt.  
Even now, there is still plenty of merit-based aid available and free scholarship matching services to help students find it.
It’s also not too late for families struggling to afford college next year to apply for financial assistance or ask the college financial aid office for more money.

Set financial expectations early

“When it comes to who is responsible for paying for college, it really is a family decision,” said Sallie Mae spokesman Rick Castellano. “Have the talk early.” 
It’s important to set clear expectations for how your child might contribute and consider the options, such as scholarships, grants, loans and work-study programs, he advised.
“Setting expectations and involving students in the college planning process ensures everyone enters this major decision with eyes wide open,” Castellano said.

Find ways for students to defray costs

Ultimately, the ability for students to pay and how to share the cost is unique to each family’s financial situation, added Ross Gittell, an economist and president of Bryant University in Smithfield, Rhode Island.
But even if students aren’t on the hook for the tuition bill, they can contribute in other ways, he added.
In fact, many undergraduates work while they are enrolled in college. As of 2020, 74% of part-time students and 40% of full-time students were employed, according to the National Center for Education Statistics. More

As the president of the National Bureau of Economic Research and a member on the Business Cycle Dating Committee, James Poterba helps determine when a recession officially starts and ends.
CNBC interviewed the MIT economist about the practice of dating downturns, and discussed why the work matters.

Ja’crispy | Istock | Getty Images

As the president of the National Bureau of Economic Research and a member on the Business Cycle Dating Committee, James Poterba helps determine when a recession officially starts and ends. Why is that important? What do those dates tell us?
When the NBER was founded in 1920, its economists mainly studied workers’ income, businesses and capital, said Poterba, who is also an economics professor at the Massachusetts Institute of Technology. However, noticing that things didn’t stay good or bad for too long — they were always changing — the bureau soon turned its attention to the cycles of the economy, as well.

Although there was less economic data available a century ago, “it was understood by anyone observing the economy that there were times when economic activity happened faster and more slowly, and when there was more or less going on,” Poterba said.
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The economists at the NBER wanted to know if these fluctuations were inevitable. And so they set out to understand why they occurred.
To ascertain the factors that precipitated a downturn, they’d have to find a precise way to pin when exactly the economy began to contract. Today, NBER’s Business Cycle Dating Committee, a private organization of academics based in Cambridge, Massachusetts, is considered an authority on the timeline of recessions.
With Federal Reserve economists predicting that the economy will enter a slump later this year, I spoke with Poterba about his research on recessions. While NBER doesn’t make any forecasts, he still had lots of interesting things to say about our downturn worries. (Our interview has been edited and condensed for clarity.)

Annie Nova: What is the main purpose of dating a recession’s start and finish?
James Poterba: So that, as we look back as students of economic fluctuation, we can try to understand what caused particular increases and decreases in the level of economic activity.
AN: How does this information help us as a society?
JP: It ultimately helps to design policy going forward. It enables us to look back and say, for example, what are the consequences of interest rate increases? What is the chance that an increase of interest rates is associated, sometime afterwards, with a period of declining economic activity? Or, if you see a large run-up in oil prices, does that typically lead to a recession?

AN: Some economists talk about recessions as inevitable in our current financial system. Why is that?
JP: That’s a very complicated question. If you go back in U.S. history to the agrarian economy days, I always think that’s an easy way to sort of understand some of this, though. If you had a very harsh winter, or if you had a drought, those are periods when the economy would experience a decline. And so today, when you have a shock like an increase in commodity prices, or a transportation disruption that impedes the ability to trade, those are all variables which can affect what happens in the economy.
AN: Do you have a sense of what language people used to describe downturns before the term “recession” took off?
JP: If you go back to the earliest work of the NBER, and now I’m literally talking 100 years ago, they used language like “business panics” or “crashes.”
AN: What factors does the committee use to determine that the U.S. is in a recession?
JP: A recession is a period of broadly dispersed decline in economic activity that lasts for a protracted period and is of substantial depth. So, it’s depth, diffusion and duration — the three Ds.

AN: Your committee’s recession timelines do not tell the full story of a downturn, right? Some people continue to face financial consequences for a long time after the economy begins to recover.
JP: One of the places where there’s been some demonstration of the long-lived impacts of recessions is with college graduates. Graduating with your undergraduate degree in the midst of a recession is less good from the standpoint of earnings than graduating in a very tight labor market. Even if you look a decade later, their earnings are still somewhat lower. Also, when workers are out of the labor market, when they’re not able to find jobs, that can lead to some decay of their skill set. And that has longer-lived effects too.
AN: Maybe because there is so much data available today, or maybe it’s the nature of the news cycle, but it feels like we’re always talking about a recession now. Even when we’re not in one, we can’t stop talking about the next one. Do you feel that?
JP: You’re right that there is a lot of media interest in the question of, is the economy likely to go into a downturn? Or, when the economy is doing poorly, is it likely to recover? Frankly, I think that’s kind of a shorthand for the conversation about, are things going to get better or worse? The words “recession” or “recovery” have become shorthand in those conversations. More

Overall, job prospects look good for the class of 2023.
The average starting salary for recent graduates is now nearly $56,000.
However, current college students expect to earn much more — almost $85,000 — in their first job, according to one report.

New college graduates negotiating their first salary may be in for a rude awakening.
In the midst of a historically strong job market, characterized by low unemployment, rising wages and a high degree of job-seeker confidence, those armed with a degree are feeling relatively good about their earning potential.

In fact, today’s undergraduates expect to make about $84,855 one year after graduation, according to a survey of college students by Real Estate Witch, part of real estate site Clever, in March.
More from Personal Finance:How new grads can better their odds of landing a jobA pilot program aims to get students into accountingThis strategy could shave thousands off the cost of college
Yet, the average starting salary for recent graduates is just shy of $56,000, Real Estate Witch found, a difference of nearly $30,000.

College grads won’t take less than $72,000

Although the vast majority — or about 97% — of students would consider lowering their salary expectations, they wouldn’t work for less than $72,580, on average, at their first job, Real Estate Witch found.
The disconnect between perception and reality only worsens over time. A decade into their careers, students anticipate making more than $204,560. That’s well over the average midcareer salary of $98,647, according to Glassdoor.

Hiring outlook for the class of 2023

A City College of New York graduate takes a selfie during the commencement ceremony.
Mike Segar | Reuters

On the upside, employers plan to hire about 4% more new college graduates from this year’s class than they hired from the class of 2022, according to a report from the National Association of Colleges and Employers.
Although that’s down significantly from earlier projections, “the overall picture is still positive for the class of 2023,” said Kevin Grubb, associate vice provost of professional development and executive director of the career center at Villanova University.
“A lot of our students have a job heading into graduation,” Grubb said.
They just won’t necessarily be paid more than last year’s graduating class.

The average starting salary for this year’s crop of graduates is projected to level off, according to a separate survey by NACE. Typically high-paying disciplines, such as engineering, math or computer science, will pay nearly the same or lower than last year, NACE found.
As of April, businesses paid new workers 6.6% less than new hires last year, although the salary declines were more pronounced in finance, insurance and other professional services, according to data from payroll provider Gusto.
But for recent or soon-to-be grads entering the job market, getting experience is even more important than a good salary, said Luke Pardue, an economist at Gusto.
“If they can gain the skills, they can parlay that into a better job later on.”
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The federal minimum wage of $7.25 per hour was last updated in 2009.
A new proposal in Congress calls for raising the federal minimum wage to $17 per hour.
“In the year 2023 … nobody should be forced to work for starvation wages,” said Sen. Bernie Sanders.

Sen. Bernie Sanders speaks on raising the federal minimum wage outside the U.S. Capitol, May 4, 2023.
Anna Moneymaker | Getty Images News | Getty Images

The federal minimum wage of $7.25 per hour has not changed in nearly 14 years.
Last week, Sen. Bernie Sanders, unveiled a new plan to update the national pay rate, which he said is currently a “national disgrace.”

This time, prompted by high inflation, he is calling for $17 per hour, a $2 increase from the $15 per hour for which he and other Democrats had previously advocated.
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The change would help lift the incomes of nearly 35 million Americans who currently earn less than $17 per hour, Sanders said.
“In the year 2023, in the richest country in the history of the world, nobody should be forced to work for starvation wages,” Sanders said.

13 states have approved a $15 minimum wage

Today, 13 states have approved a $15 minimum wage, Sanders said. Many of those states are phasing wage hikes gradually. Some companies, such as Amazon, Target and Walmart, have also moved to set a higher minimum pay rate for their workers.

In Raleigh, North Carolina, where Rita Blalock, 57, works at a local McDonald’s, the state’s rate is still $7.25 per hour, in keeping with the federal minimum wage.
Blalock has been able to advocate for a higher wage for herself and currently earns $13 an hour. But living on even that income comes with its struggles, she said.
“We need more money,” said Blalock, who is a member of the Union of Southern Service Workers, which is pushing for a higher minimum wage.

“Anything is better than what we’re actually supposed to be getting,” she added.
In North Carolina, the living wage for a worker with no children is $16.83 per hour, according to the Massachusetts Institute of Technology’s living wage calculator. The poverty wage for that same worker is $6.53 an hour, 72 cents less than the hourly federal minimum wage, according to MIT.

Efforts to raise the federal minimum wage

“Nobody in this country can survive on $7.25 an hour,” Sanders said, while challenging his colleagues in Congress to try living on those wages for one month.
Sanders’ plan calls for raising the minimum wage to $17 per hour over a five-year period, or by 2028. In June, the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP) will mark up the bill, he said.

Nobody should be forced to work for starvation wages.

Sen. Bernie Sanders
U.S. senator from Vermont

Democrats had pursued raising the federal minimum wage in recent years, though those efforts stalled.
In 2019, the House passed a bill to raise the minimum wage to $15 an hour.
In 2021, efforts to include the pay hike in a Covid-19 relief package were prevented due to Senate rules governing the budget reconciliation process. At that time, eight Democratic caucus members voted with Republicans against waiving the objection, which would have allowed the federal minimum wage increase to be included in the package.
A Congressional Budget Office report released that year found the plan to raise the minimum wage would prompt the loss of 1.4 million jobs, though it would lift 900,000 people out of poverty.

When President Joe Biden took office, he promised to address the federal minimum wage in his first 100 days, Blalock recalled.
“We’re way over 100 days,” she said.
Despite congressional gridlock, Biden was able to raise minimum pay for federal workers to $15 per hour through an executive order.

‘A weak minimum wage is bad for the overall economy’

Opponents to raising the minimum wage cite the higher costs those increases would put on businesses. A 2021 CNBC poll found one-third of small businesses anticipated laying off workers if a $15 minimum wage was implemented by Congress.
“We’re not increasing the cost of business,” Sanders said last week, noting that letting workers earn a living wage will help them spend more, which will help businesses.
Economic research backs up the idea, according to Heidi Shierholz, president of the Economic Policy Institute, who spoked at Sanders’ event.

Having a weak minimum wage is bad for the overall economy.

Heidi Shierholz
president of the Economic Policy Institute

Rising inequality means income has shifted away from low- and middle-income workers who are more likely to spend it, she said.
The decline of the real value of the minimum wage is now more than 40% below where it was at its peak 55 years ago, Shierholz said.
“Having a weak minimum wage is bad for the overall economy,” Shierholz added.
In addition to reducing inequality, raising the minimum wage would also reduce poverty, including child poverty, plus racial and gender wage gaps, she said.
However, recent research published by the National Bureau of Economic Research finds the poverty-reducing effects of raising the federal minimum wage may be limited. Under a plan to raise the national pay rate to $15 per hour, less than 10% of the workers who would be affected are part of poor families, the research found.
Not everyone is happy with proposed minimum wage increases. Efforts to raise minimum wage to $16 to $17 per hour in parts of New York have drawn criticism, including from farmers who say it will interfere with their ability to cope with high inflation, labor shortages, supply chain issues and other economic challenges.
However, economists such as Shierholz maintain a higher national pay rate must be mandated.
“If you allow employers who have power to suppress wages or to set their wages really low, they’ll exercise that power,” Shierholz said. “We see that.” More