Forget a Higher Minimum Wage—Here’s a Better Way to Help American Workers
Many mainstream economists say that the U.S. economy has fully “recovered” from the Great Recession. Moody’s chief economist, Mark Zandi, for example, recently warned that “[w]ith the economy at full employment and seeming destined to blow past it, the current [economic] expansion is likely entering its later stages.”
Yet economic security bypasses far too many Americans. For instance, despite a low unemployment rate of 4.3 percent, job seekers still outnumber job openings by the millions, and many prime age workers (25-54) are still outside the workforce. The unemployment rate for black workers (7.5 percent) remains well above any level that could be characterized as full employment.
Even for those with a job, the recovery has not been robust. Despite one of the longest expansions in U.S. history, we must ask “a recovery for whom?” Income earners in the bottom fifty percent haven’t seen a real raise since 1980. According to data from the Economic Policy Institute, while productivity, which is supposed to lead to higher wage, has increased a staggering 73.4 percent from 1973-2015, average hourly compensation of the typical worker has increased only 11.1 percent. In short, real income gains have skipped an entire generation, including the cruel and unjust continuation of poverty for tens of millions of Americans in a country that is by far the richest in absolute terms.
The unevenness of the recovery no doubt led to the frustration that boiled over in the 2016 election and led to the unexpected victory of President Donald Trump. Yet the “solutions” offered by the Trump administration are likely to tilt the field yet further in favor of the wealthiest Americans. Despite their promises of thinking big—25 million new jobs and 4 percent GDP growth—it’s unlikely that these claims will materialize.
Instead, America needs a bold alternative policy that is inclusive and progressive, rather than one that further moves us towards deeper inequalities.
One such bold policy is a federal job guarantee.
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