“It’s great to be able to give good news,” said Erickcek, senior regional analyst for the W.E. Upjohn Institute for Employment Research.
More than 100 community leaders attended Tuesday’s forum at the Grand Haven Community Center. They were looking for answers to many questions: What would a higher minimum wage do to the recovery? What will it take to provide sustainable long-term positive growth? Should we worry about the recent stock market decline?
Stocks suffered steep declines in recent days because of slower-than-expected manufacturing growth, wicked January weather cutting into car sales and developing countries feeling the pinch of higher interest rates, according to Erickcek.
Erickcek said he’s hanging onto his stocks. Although the economy and manufacturing sector are expected to expand, he said the growth may be slower than we would like.
“What my imagination can’t provide is the new products — new products that create demand,” Erickcek said.
The economist said he's excited about self-driving cars that are currently being tested in the auto industry. With an aging population, he said that innovation would allow older people to continue driving — to the casinos and elsewhere — without worry of their children trying to snatch their car keys from them.
Erickcek said the effect of a minimum wage hike would have a “marginal” impact on employment, but a “pretty good” impact on purchasing power. The local mom-and-pop shops would likely have to raise prices, but he doesn’t foresee a shopping stall.
“The ice cream you buy at the harbor would cost 10 cents more, but I feel most tourists would be willing to accept that,” Erickcek said. “Especially when it’s 80 degrees and there’s a soft breeze off Lake Michigan.”
But he does think a higher minimum wage could backfire on those who hope to benefit from it. By raising the minimum wage, he predicts there would be more competition for jobs from skilled workers.
“The very people who hope to be helped by this could be shut out,” Erickcek said.
He feels a more effective way of helping low-wage earners would be to increase the earned income tax credit.
“That way it doesn’t affect the cost structure of business,” Erickcek explained.