US needs to boost economy's capacity to expand so benefits are shared more widely, as unemployment is still too high, wages are lagging, despite US economic growth that is expected to strengthen in Q2, H2, says US Treasury Secretary Lew
Cindy Allen
NEW YORK
,
June 11, 2014
(Bloomberg LP)
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Treasury Secretary Jacob J. Lew said the U.S. needs to boost the economy’s capacity to grow so the benefits are shared more widely, as unemployment is “still too high” and wages are lagging.
Lew, in a speech to the Economic Club of New York that focused on broad challenges facing the economy, said he expects “a much stronger second quarter and second half of this year. Nevertheless, we cannot escape the fact that millions of Americans continue to struggle.” The labor market in the world’s largest economy has improved this year. Payrolls pushed past their U.S. pre- recession peak for the first time in May. It was the fourth consecutive month employment increased by more than 200,000, the first time that’s happened since early 2000. The jobless rate held at an almost six-year low of 6.3 percent. Lew said the expansion needs to be stronger to reach more Americans. “While corporate profits and non-farm productivity have risen, hourly compensation only just started rising, and not by enough to make up for lost ground,” he said. “As our economy grows and our workers become more productive, this progress needs to reach the lives of more hardworking Americans.” The policy debate over the “long-term challenges stemming from an aging population and the cost of health care” should revolve around “building a firm foundation for future economic growth,” Lew said. “The crisis we face today is the need to make sure the economy is expanding fast enough to support a growing middle class and greater opportunity for all Americans,” he said. “Investments that boost growth and job creation today, tomorrow, and 25 years from now will put us in a stronger position to address our future fiscal challenges.” Lew also urged lawmakers to approve increased spending on infrastructure “to make investing in America even more appealing.” “Building our roads, railways, bridges, and ports has been one of the most historically bipartisan ways to create jobs today and lay a foundation for future economic expansion,” he said. The U.S. also needs to “create more higher education options,” he said. “We should ask ourselves if earning an undergraduate degree in three years might be a better, more cost-effective option for some students to get their education.” To contact the reporter on this story: Ian Katz in Washington at ikatz2@bloomberg.net To contact the editors responsible for this story: Chris Wellisz at cwellisz@bloomberg.net Brendan Murray
Fiscal Challenges
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