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Life Arts    H4'ed 1/19/16

SOTU Blames Robots for Growing Wage Inequality

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The second thing I would focus on is that the way the low-wage labor market operates, any reductions in employment are likely to take the form of workers having to take somewhat longer to find a new job. When they find that new job, it will pay a lot more. The typical low-wage worker cycles in and out of jobs in retail or restaurants (or similar). Raising the minimum wage will actually help to lower turnover, but it will remain high relative to the rest of the economy. Even if employers want to reduce employment, they'll almost certainly do that by not replacing workers when they leave, rather than by actually laying workers off. As workers cycle through jobs, the jobs they do get will pay substantially more after the increase. The evidence strongly suggests that even if there is a reduction in the total number of low-wage jobs, the increase in the wages will leave low-wage workers as a group much better off.

JB: Is it safe to say that, on the whole, from an economist's point of view, that raising the minimum wage is a good thing?

JS: Workers have a lot to gain from a higher minimum wage. We've seen a lot of success on this front in recent years and there is a lot of momentum. But, a lot of the most serious problems that low-wage workers face are not low wages. We need to push for a complete restructuring of the low-wage labor market. That would include changes in scheduling regulations to provide predictability and flexibility for workers. Access to free or inexpensive high-quality child care. Paid sick days. Paid family leave (ideally done through social insurance, not a direct requirement on employers). Raising the minimum wage is necessary but not sufficient and after a certain point, I would want to focus on these other issues rather than getting an extra dollar out of the minimum-wage fight.

JB: I'm with you. Affordable, high-quality child care is a biggie that is available in virtually all the other industrialized nations, I believe. And is there anything you'd like to add before we wrap this up?

JS: We have terrible problems in the low-wage labor market, but the broad middle of the work force has also been taking it on the chin for almost 40 years. Inflation-adjusted wages for the typical worker have barely changed since the late 1970s. Recent college graduates --young people who did everything they were told to do-- make less now than their counterparts did 15 years ago. If we want to raise wages at the bottom, it will help if we raise them at the middle, too.

To do that, we'll need policies such as full employment, unions, paid family leave, higher (not lower) Social Security benefits, increased taxation at the top, and a restructuring of the financial sector. Recent experience on the minimum wage suggests that organizing can yield results, so I'm hopeful that we'll make headway on this broader agenda, too.

JB: Amen to that, John. Thanks so much for giving us a larger context for our understanding of the current economic situation. It's been a pleasure.

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Joan Brunwasser is a co-founder of Citizens for Election Reform (CER) which since 2005 existed for the sole purpose of raising the public awareness of the critical need for election reform. Our goal: to restore fair, accurate, transparent, secure elections where votes are cast in private and counted in public. Because the problems with electronic (computerized) voting systems include a lack of (more...)

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