- Larry Kudlow, President Donald Trump’s top economic adviser, said the federal minimum wage is a “terrible idea.”
- Kudlow said variance between states makes a federal wage level impractical.
- Kudlow argued that corporate tax cuts are the best way to raise worker wages.
- Kudlow also addressed the US-China trade war, Trump’s attacks on the Federal Reserve, and calls by the GOP for cuts to Medicare and Social Security.
Larry Kudlow, President Donald Trump’s top economic adviser, said on Thursday that he does not believe the federal government should set a minimum wage.
“My view is a federal minimum wage is a terrible idea, and will damage, in particular, small businesses,” Kudlow said a Washington Post even on Thursday.
The former Wall Street economist and CNBC host argued that variances between states makes the federal standard impractical and onerous.
“Idaho is different than New York. Alabama is different than Nebraska,” Kudlow said. “That’s why the federal minimum wage doesn’t work for me.”
The federal minimum wage is currently $US7.25 an hour (which comes out to roughly $US15,000 a year), where it has been since 2009, but the buying power of that wage has eroded over the past nine years. While 29 states have increased their minimum wage above the federal minimum, Democrats and labour groups have argued that the current minimum wage does not provide a living wage and should be increased to $US15 an hour.
Kudlow said at the event that he would oppose any deal to raise the federal minimum wage and said the best way to boost average worker pay was to cut corporate taxes.
The GOP did include a large corporate tax cut in the massive tax reform law passed in 2017. But while wage growth is continuing on the post-financial crisis upward trend, there has been little evidence that wages have suddenly jumped above that long-run growth trend due to the cut.
Kudlow also addressed a series of other topics ranging from the trade war to Social Security cuts. Here’s a quick breakdown.
- On the planned meeting between Trump and Chinese President Xi Jinping: In an earlier interview with CNBC, Kudlow weighed in on the US-China trade war situation. While there have been reports of additional tariffs, the adviser said “nothing is set in stone right now.” In addition, Kudlow expressed hope for talks between Trump and Xi that are set to take place at the G20 meetings in Argentina this month. “It is possible some good positive things could – I say could – come out of President Trump-President Xi talks,” he said.
- On the GOP’s desire to cut Social Security, Medicare, and Medicaid: While Republicans leaders like Mitch McConnell have suggested that Congress should cut the large programs to wrangle the deficit, Kudlow said Trump had “no plans to touch the large entitlements.”
- On Trump’s attacks on Federal Reserve Chairman Jerome Powell: Kudlow said that Trump had “not yet” called Powell directly to direct his displeasure with the recent interest rate increases. Trump has leveled a series of attacks agains Powell and the Fed.