>> Cathy: DID MINNESOTA'S MINIMUM WAGE HIKE LEAD TO FEWER HOURS WORKED AND A LOSS OF JOBS?

A CONTROVERSIAL TUDY THIS WEEK CAME TO THAT ONCLUSION.

MEANWHILE, WILL CONGRESS SOON REACH A DEAL ON RAISING THE DEBT CEILING?

TWO TOPICS WE WANT TO TALK ABOUT WITH CHRIS FARRELL.

YOU KNOW HIM AS THE HIGH PROFILE ECONOMICS REPORTER FOR AMERICAN PUBLIC MEDIA.

I KNOW YOU LIKE THAT TITLE.

>> IT'S WONDERFUL, I'M GOING TO PUT THAT ON MY BUSINESS CARD, THANK YOU.

CALLED CATH YOU SHOULD.

THERE IS SOME PUSHBACK TO THIS STUDY, AS I MENTIONED IN THE INTERIM.

$15 AN HOUR ADVOCATES ARE PUSHING BACK ON IT.

EVIDENTLY $15 AN HOUR MINIMUM WAGE SEEMS AS THOUGH IT'S HAD A DAMPENING EFFECT ON NUMBER OF HOURS AND JOBS DECLINE TOO.

IS THAT YOUR READ ON THIS?

>> SO WHEN YOU LOOK AT THE STUDY THE REAL FOCUS HAS BEEN ON RESTAURANT JOBS, AND THAT'S WHERE, BECAUSE THE RESTAURANT INDUSTRY IS A MINIMUM WAGE INDUSTRY OR HAS BEEN FOR A LONG PERIOD OF TIME.

SO THE IMPACT IS LARGEST N THE RESTAURANT INDUSTRY, SOME IN RETAIL.

THEY HAVE LARGER HAN OTHER NUMBERS THAT ARE OUT THERE, AND SO THIS STUDY GOES OUT TO I BELIEVE IT'S 2028 THEY'RE GOING TO KEEP FOLLOWING THE NUMBERS AND THERE'S STILL A LOT OF CONFUSION ABOUT THE IMPACT OF THE PANDEMIC.

AND WHAT IS, SO, WHAT I WOULD TAKE AWAY FROM THIS IS INCREASE IN MINIMUM WAGE DID HAVE AN IMPACT, HOW BIG IS STILL AN OPEN QUESTION.

THEIR STUDY SHOWS PRETTY LARGE NUMBERS.

THERE IS AS YOU SAY, THERE IS A PUSHBACK, BUT IF YOU THINK ABOUT THE MINIMUM WAGE A LOT OF TIMES IT DOESN'T SHOW UP IN A LOSS OF JOBS WHICH IS WHAT PEOPLE ARE AFRAID OF, BUT IT MIGHT BE FEWER HOURS WORKED.

YOU'RE STARTING A BUSINESS, YOU THINK ABOUT, WELL, MINIMUM WAGE IS GOING TO BE GOING UP SO MAYBE I'LL BUILD MY BUSINESS AROUND THREE PEOPLE AS OPPOSED TO FOUR PEOPLE.

SO IT WORKS ITS WAY OVER TIME BUT FOR LL THE HEAT THAT IS GENERATED BY THE MINIMUM WAGE CONTROVERSY, BY AND LARGE THE IMPACT IS RELATIVELY LIMITED IN MOST CIRCUMSTANCES.

>> Eric: BUT HASN'T THE MARKET ITSELF KIND OF MADE THE MINIMUM WAGE OBSOLETE?

>> WELL, THIS IS THE OTHER THING THAT'S HAPPENED AS WE'VE COME OUT OF THIS PANDEMIC WHICH IS, YOU KNOW, OKAY, $15 AN HOUR, IT'S MORE OF A NATIONAL ISSUE THAN IT IS A SPECIFICALLY A LOCAL ISSUE.

SO, YOU KNOW, NATIONALLY ABOUT A THIRD OF THE WORKFORCE EARNS LESS THAN $15 AN HOUR AND ROUNDING OUT THE NUMBERS, 50% ARE WOMEN, 50% ARE BLACK, AND MORE THAN THAT ARE SINGLE PARENTS.

AND SO THERE, ITH THE FEDERAL MINIMUM WAGE IS $7.25 AND IT'S BEEN THERE SINCE 2009.

SO IT'S LOST 30% OF ITS PURCHASING POWER OVER THAT PERIOD OF TIME.

YOU KNOW, I THINK THERE'S A BIGGER DEBATE ABOUT RAISING THE MINIMUM WAGE.

SO, AGAIN, THEIR STUDY DOES SHOW A GENUINE IMPACT, A GENUINE NEGATIVE IMPACT, BUT FOR ALL THE QUESTIONS THAT YOU'RE RAISING AND THAT YOU'RE RAISING, YOU REALLY -- I HATE TO SAY THIS BUT IT'S LIKE WE HAVE TO ACTUALLY GET MORE DATA TO COME UP WITH SOME STRONGER CONCLUSIONS.

>> Cathy: ALTHOUGH OTHER ECONOMISTS SAY RAISING THE MINIMUM WAGE IS NOT A BAD IDEA BUT AS YOU SAY THERE ARE COSTS AND TRADEOFFS.

WHICH I THINK PEOPLE UNDERSTAND.

>> THE QUESTION IS HOW BIG IS THE TRADEOFF.

THIS STUDY SHOWS A PRETTY BIG TRADEOFF.

OTHER STUDIES HAVE SHOWN A SMALLER TRADEOFF, YOU AN HAVE A LEGITIMATE DEBATE WHETHER THAT IS WORTH HAVING OR NOT.

ONE OF THE THINGS THERE WAS A CONFERENCE THAT DEALT WITH THIS ISSUE AND ONE OF THE THINGS THAT CAME OUT OF IT IS, LOOK, NO ONE'S EVER STOOD ON TOP OF A CAR AND SAID RAISE THE EARNED INCOME TAX CREDIT, OKAY?

YOU CAN SAY RAISE THE MINIMUM WAGE, PEOPLE KNOW EXACTLY WHAT YOU'RE TALKING ABOUT.

BUT IF YOU REALLY DO WANT TO IMPROVE THE INCOMES OF PEOPLE WHO ARE LIVING ON LOW AND UNSTABLE INCOME, THE GREAT ADVANTAGE OF THE EARNED INCOME TAX REDIT DOESN'T HAVE A LOT OF NEGATIVE AND SOCIETY SHARES IN THE COSTS, NOT JUST BUSINESS.

>> Eric: GIVE US A MINUTE ON THE DEBT CEILING.

>> DEBT CEILING IS A CRISIS THAT SHOULD NOT BE HAPPENING.

THIS TIME AROUND THERE IS MORE CONCERN THAN IN THE TWO PREVIOUS EPISODES WHERE WE CAME CLOSE, AND THERE IS A GREATER SENSE BECAUSE OF THE POLITICS THAT YOU COULD ACTUALLY BREACH A DEBT LIMIT.

THE BETTING IS THAT HAPPENS IT WOULD BE INCREDIBLY SHORT, IT WOULD BE A VERY SHORT PERIOD OF TIME, IT'S NOT GOING TO O THROUGH THE WHOLE SUMMER.

BUT THIS IS A MANUFACTURED CRISIS, THIS IS WE HAVE A 3.4% UNEMPLOYMENT RATE, MORE AND MORE PEOPLE ARE COMING INTO THE JOB MARKET, WHY WOULD YOU WANT TO PUT THAT, THIS ADDITIONAL BURDEN ON AN ECONOMY THAT HAS DEALT WITH COMING OUT THE PANDEMIC, THERE'S CONCERNS ABOUT RECESSION, THE FEDERAL RESERVE HAS BEEN TIGHTENING.

WE HAD THESE REGIONAL BANKS THAT HAVE HAD ALL THEIR PROBLEMS, THIS IS A CRISIS THAT YOU SHOULD NOT BE PUTTING ON THE ECONOMY.

>> Cathy: SO THE STAREDOWN ENDS WITH SOMETHING, RIGHT?

>> YES.

HERE'S THE THING, WE MAY DEFAULT, WE MAY NOT DEFAULT, BUT IF WE DO DEFAULT IT DOESN'T LAST FOR VERY LONG.

WE WILL PAY OUR BILLS.

THE QUESTION IS HOW DO WE GET THERE AND HOW MUCH DAMAGE HAPPENS IN BETWEEN?

THERE IS NOTHING GOOD, I WANT TO BE VERY CLEAR ABOUT THIS, THERE IS NOTHING GOOD ABOUT A DEBT DEFAULT NO MATTER HOW SHORT IT IS, IT IS A BAD THING FOR THE ECONOMY.

THINK ABOUT THIS.

U.S. TREASURIES ARE THE FOUNDATION OF THE GLOBAL FINANCIAL SYSTEM, THEY ARE THE FOUNDATION OF AMERICA'S RETIREES, AND SO YOU JUST DON'T WANT TO MESS AROUND WITH THIS.

EVERYTHING IS PRICED OFF U.S. TREASURIES.

>> Eric: KEEP US POSTED ON IT, WILL YOU?

>> ABSOLUTELY.

I AM