PHILADELPHIA (CBS) — Chris Stigall spoke with economist Peter Morici this morning on Talk Radio 1210 WPHT to review President Obama’s State of the Union Address.
Listen to the podcast below…
Morici, a Professor of International Business at the University of Maryland, said he expects the President will be able to pass a raise in the minimum wage because “there is a lot of sentiment in the country that $7.25 an hour is too low.”
Morici believes the President’s proposal for $10.10 an hour is too high, however, and says it will cause more unemployment.
“We’ve changed the minimum wage in the past; we’ve just been catching it up to inflation. We haven’t been creating a wild increase,” he says.
Morici also told Stigall he does not believe the President and other Democrats are serious about tax reforms for businesses to create more jobs in America.
“They want to get more revenue out of it. They’ll get enough credits and deductions to lower [the corporate tax] rate from 35% to 20%, but they won’t let you lower it to 20%. They’ll want 25% so they get a dividend.”
Stigall asked Morici his thoughts on the President’s suggestion that employers should offer their employees a raise.
If that happened, Morici replied, “prices would go up, the stuff will become more expensive, we’ll get into an inflationary spiral, and the next guy will have to grind down the economy to kill it.”
Regarding the President’s plan to create retirement accounts for workers without 401ks, Morici feels, “he wants to create some kind of environment where poorer folks have some kind of retirement account so they get more than Social Security. That’s kind of noble, but they don’t really have any money to put into those things, and he didn’t say where any government money would come from or if there would be any government subsidy.”