In good news for the U.S. economy, Goldman Sachs today upgraded its outlook for the US economy for 2021. It is now forecasting as much as 6.8% growth for the year as the firm now expects a much larger Coronavirus relief package will be passed by the U.S. Congress.
Economists at Goldman Sachs raised their forecast for 2021 US gross-domestic-product growth to 6.8% from 6.6% and to 4.5% from 4.3% in 2022. The new estimates for the final COVID-19 relief-package are as much as $1.5 trillion, up from $1.1 trillion.
Just last month the firm raised its expectation by 0.2% from 6.4%. to 6.6%.
Unfortunately for as many as 17 million American workers (this from estimates made by the Congressional Budget Office – CBO) there probably won’t be a Federal minimum wage hike to as much as $15 an hour.
Goldman Sachs chief economist Jan Hatzius said so in an interview with Yahoo Finance. The minimum wage in America has not been raised since 2009 when it was set at its current amount of $7.25 an hour. While many states have higher minimum wages required by law, many also do not even set their own local minimum wages.
President Biden is currently pushing for the change as part of his new national stimulus package. As of now 21 states will have minimum wages of at least $10 an hour by the end of 2021. Only six of those have ones of $13 or more.
Jan Hatzius explained that even if all 50 Senate Democrats agree to pass a $15 minimum wage it could still be blocked by the Republicans. Also, every state has a different economy. “A key obstacle is that a $15 federal minimum would affect states quite differently,” said Hatzius, “and Democratic senators from some lower-wage states have not yet signed on. A compromise at $10-11, implemented no faster than $1 per year, appears to be more politically realistic.”