Kevin D. Williamson: The Real Solution To Wage Growth Is Jobs — Not Government Interference

Remember What was all the progressive bellyaching about income inequality just a few short years ago? Whatever What was the result?

NothingYes, it is.

As It turns out, US income inequality has not risen in a decade. Is This is due to the minimum-wage increases as well as big, New Deal-style public-spending programs? NoIt is due to the best social-welfare programme known to man: a tight labor marketplace.

Outside Recent layoffs Silicon ValleyThings have been looking good for US workers, as the demand for labor has outpaced the supply, which has led to higher wages and better working conditions. Even with substantial economic headwinds —COVID-19, geopolitical uncertainty, inflation—the median “real” (inflation-adjusted) Household income increased by more than $10,000 in the past decade according to the Federal Reserve.

And There are also positive developments at the lowest end on the income-distribution curve. The wages for US workers in the bottom 10% This is earnings are on average a third higher than their states’ minimum wages, according to data from the US Department of Labor analyzed by The Wall Street Journal Professor Nathan Wilmers MIT Sloan. Which It means that even though politicians are arguing about increasing the statutory min wage, the economy has increased earnings by itself. 

Politicians They believe the minimum wage is what they claim it to be, but that is not true. legal Minimum wage: The economic minimum wage — the real minimum wage — has always will be the same: $0.00 per hour. When the minimum wage gets so high that the cost of a worker is no longer economically sustainable, that worker doesn’t get a raise—he gets fired.

Although Economists are as diverse as the people who believe that these effects are often exaggerated. Milton Friedman Paul Krugman The common wisdom proposition that higher minimum wages tends to increase unemployment, especially among workers with low skills, has been confirmed by research. Krugman It was once observed that progressives are a good thing. “very much want to believe that the price of labor . . . can be set based on considerations of justice, not supply and demand, without unpleasant side effects.”

Some Politicians hate to admit what Krugman It is so obvious, but everyone understands it. This is why the minimum wages in the District This is Columbia is $16.10 an hour and not $70 an hour, which is about what you’d need to live comfortably in Washington.

The The downside is that workers have a strong bargaining position due to the large number of Americans I have left the workforce completely. As As recently as 2001, nearly two-thirds were working-age Americans were in the labor force, but by 2020 that share fell to 60% — it has since recovered a little, but not much. The Story is difficult: Some of those former workers are stay-at-home parents whose families don’t need the second income, while others are aimless young people who have given up on work prematurely.

But Even with the limitations, this is a good time to be a worker, especially if you are in a position that we consider minimum-wage, but which today pay much more than minimum wage. The Minimum wage FloridaFor instance, the starting wage is $11 an hour. Amazon Warehouse Florida It ranges between $14 and $18 an hour. FastRestaurants serving food from Staten Island To The Bronx Currently, there are more than 2,000 job openings. New York City’s $15 minimum wage.

If the politicians want to pursue a truly pro-worker agenda, they should forgo legislating higher wages via minimum-wage increases and instead implement policies that will increase a paycheck’s real-world value. What Lower-income workers in places like New York City Not just a higher minimum salary, but affordable housing, reliable public transit, cost-effective healthcare and education options as well as safe communities are what most people need. Construction and hospitality workers probably would appreciate having less competition from illegal immigrants, too — though there is little hope that the Biden The administration will not change that.

The only wage a politician can reliably raise through legislation is his own—and politicians are always happy to do that, as New York lawmakers recently did. But encouraging strong economic growth and the high demand for workers requires the type of intelligent, sustained efforts that are much more urgently important to people who don’t have Wall Street-level incomes to tackle the problems of daily living. Strange The loudest people are those who talk about the most “social justice” often ignore the very problems that the poor and regular workers have to live with — problems that the rich hear about on the news or experience mostly through limousine windows.

As David Neumark The Center For Population, Inequality, Policy Tells The Wall Street Journal: “I don’t want to say the minimum wage has become irrelevant, but it has certainly become less relevant.” The best kind of policy would be one that makes the minimum wage even less relevant in the future — along with an economy in which high wages are not a gift from politicians but the result of highly productive workers in a highly efficient and flexible labor market.

The politicians, for their part, prefer the patronage model — which is why nobody should trust politicians with their livelihood.