In testimony before a Senate committee on Thursday, Fed Chair Yellen said a minimum wage increase would likely have some negative effects on jobs, though it’s not clear how large.
Still, boosting the federal minimum wage, which has remained at $7.25 per hour since mid-2009, would benefit some people, she added.
In recent months, the federal minimum wage has been a hot-button issue. In February, President Barack Obama boosted the minimum pay for federal contractors hired in the future to $10.10 per hour. He’s also voiced his support for the federal level for all workers to rise to $10.10 from the current $7.25. Separately, organized protests of fast food workers have lobbied for a jump to $15.
Yellen also addressed concerns regard U.S. fiscal policy.
“Fiscal policy, while it has accomplished a very meaningful reduction in the budget deficit, as you pointed out has served as a drag on spending and aggregate demand in the economy and in a sense this has been part of the headwinds that the Federal Reserve has had to confront in designing our own monetary policy,” she said.