Increasing interest rates can discourage investment by making it more expensive to borrow money, and by increasing the yield of savings relative to available investment targets.
Corporations seeking investment in this climate might try to attract it by increasing the expected return on investment, which would involve committing fewer resources or achieving greater returns - being "more efficient".
Labour costs are typically one of the main outgoings for a corporation, and so they might try to increase their rate of return by eliminating positions which are considered to be producing too few returns.
The Federal Reserve might want this because they believe (erroneously, in my view) that high employment is the main contributing factor for inflationary pressure.
You are absolutely correct and I wish more people understood this: poverty is a feature of the system. People who tell poor people to just "get a job" don't understand how this system works. Also, there's no point in trying to figure out how to "fix" the system, i.e. eliminate poverty, because we've found no alternative that works save for one: social safety nets to ensure the poor are at least housed, clothed, and fed.
I don't think poverty is necessary, that problem could be solved by redistributing these returns, e.g. through a higher corporate tax and UBI. The alternative to monetary policy is a cycle of boom and bust that is much larger and more disruptive. Fundamentally though, we do not want people to be employeed in jobs that produce little value, and when interest rates are too low a lot of that starts to happen.
> that problem could be solved by redistributing these returns,
TBF, we already have redistribution via progressive taxation which funds "social safety nets to ensure the poor are at least housed, clothed, and fed." (to use GP's words). Trick is to ensure that we do not do too much of it, else people will not have any incentives to work harder.
We have progressive taxation in theory, however the reality is we have a virtual aristocracy able to pay to have tax law written in their favor, to the point where as a percentage of income the extremely wealthy aren't paying nearly as much of a portion of their income in taxes as the middle class who are only a couple of missed paychecks away from life-altering changes in lifestyle.
Also, the Laffer Curve has been thoroughly debunked time and time again. You may want to pay attention to what happened to wealth distribution since the start of the Reagan Administration and its adherence to "voodoo economics" - the very same economic theory plaguing us to this day.
Corporations seeking investment in this climate might try to attract it by increasing the expected return on investment, which would involve committing fewer resources or achieving greater returns - being "more efficient".
Labour costs are typically one of the main outgoings for a corporation, and so they might try to increase their rate of return by eliminating positions which are considered to be producing too few returns.
The Federal Reserve might want this because they believe (erroneously, in my view) that high employment is the main contributing factor for inflationary pressure.