Wage Stagnation and Its Discontents: Rethinking the Safety Net to Encourage a More Dynamic Economy

Link: https://www.manhattan-institute.org/schrager-wage-stagnation-rethinking-safety-net



Guaranteed jobs or UBI are poorly targeted and do not match the needs of new workers and may even hold them back by offering the sort of guarantees that perpetuate wage stagnation. Instead, the new safety net should offer various programs to smooth out dips in income and offer benefits that are not tied to a single employer, including:

Wage insurance—benefits that account for a drop in income, not just a loss of employment

Income averaging—tax rates based on income over three or five years, not just a single year, which will make income more stable for workers in variable work arrangements

Providing contingent workers the opportunity to receive benefits, such as health care and sick leave, that are not tied to traditional employment

To protect themselves against income risk, Americans have resorted to stagnation. We can provide downside protection in alternate ways—so that Americans can feel more free to switch jobs, try alternative forms of work, or start new companies. The above-mentioned programs are a more cost-effective and efficient way to address the needs of the new labor force than the guarantee-oriented policies that receive more attention. These programs provide options that would provide more robust insurance that can help spur a more dynamic economy. The options are merely a starting point to think more creatively about how to support a changing economy and break the cycle of stagnation.

Author(s): Allison Schrager

Publication Date: 9 September 2021

Publication Site: Manhattan Institute

Characteristics of minimum wage workers, 2020

Link: https://www.bls.gov/opub/reports/minimum-wage/2020/home.htm


Age. Minimum wage workers tend to be young. Although workers under age 25 represented just under one-fifth of hourly paid workers, they made up 48 percent of those paid the federal minimum wage or less. Among employed teenagers (ages 16 to 19) paid by the hour, about 5 percent earned the minimum wage or less, compared with 1 percent of workers age 25 and older. (See tables 1 and 7.)

Publication Date: February 2021

Publication Site: Bureau of Labor Statistics

How To Stop The Manchin Presidency And Raise The Minimum Wage

Link: https://www.dailyposter.com/p/how-to-stop-the-manchin-presidency


Any standalone, substantial minimum wage bill will face a filibuster requiring 60 votes to overcome it. Despite the White House fantasizing that Republicans might support a serious minimum wage increase, there probably are not 10 GOP senate votes to break such a filibuster. 

Meanwhile, if Democrats try to attach a minimum wage increase to a bill that Republicans actually really want to vote for — say, the National Defense Authorization Act — Republicans could move to simply strike it out of that underlying bill, which enough conservative Democrats might agree to, and then the GOP would vote en masse for final passage of the stripped-down legislation.

Everyone in Washington knows this script, so a move to attach a minimum wage to a bill like this would likely be a performative gesture, but not a legislative victory.

Author(s): David Sirota

Publication Date: 4 March 2021

Publication Site: Daily Poster

In Democrats’ progressive paradise, borrowing is free, spending pays for itself, and interest rates never rise

Link: https://www.washingtonpost.com/business/2021/03/03/democrats-stimulus-spending-inflation/


To hear it from liberal economists, progressive activists and Democratic politicians, there is no longer any limit to how much money government can borrow and spend and print.

In this new economy, we no longer have to worry that stock prices might climb so high, or companies take on so much debt, that a financial crisis might ensue. In this world without trade-offs, we can shut down the fossil fuel industry and transition to a zero-carbon economy without any risk to employment and economic growth. Nor is there any amount of infrastructure investment that could possibly exceed the capacity of the construction industry to absorb it.

Rest assured that the economy won’t miss a beat no matter how far or fast the minimum wage is raised. And whatever benefits are required by the always struggling middle class can be financed by raising taxes on big corporations and the undeserving rich.

Author(s): Steven Pearlstein

Publication Date: 3 March 2021

Publication Site: Washington Post

Many Businesses Support a Minimum-Wage Increase—Just Not Biden’s $15-an-Hour Plan

Link: https://www.wsj.com/articles/many-businesses-support-a-minimum-wage-increasejust-not-bidens-15-an-hour-plan-11614604077


Still, a higher minimum wage puts pressure on smaller businesses that can’t raise wages as easily as large companies, which can adapt by deploying labor-saving technology or modestly adjusting hours for large workforces, said Jonathan Meer, an economist at Texas A&M University.

“It’s a lot harder for Joe’s Hardware,” he said. “We should take note that Amazon — the place with no cashiers — is the one calling for a higher minimum wage.”

Fewer than 250,000 people in the nation’s workforce of 140 million last year were paid exactly the federal minimum wage, which hasn’t changed since 2009, the Labor Department said last week.

Author(s): Eric Morath and Heather Haddon

Publication Date: 1 March 2021

Publication Site: Wall Street Journal

House Democrats Push Minimum Wage Raise in Covid-19 Relief Bill Despite Senate Concerns

Link: https://www.wsj.com/articles/house-democrats-to-craft-covid-19-relief-bill-with-minimum-wage-increase-11613168330?mod=djemwhatsnews


House Democrats are preparing to stitch together a legislative version of President Biden’s $1.9 trillion coronavirus relief proposal next week, which will include an increase in the minimum wage to $15 an hour despite a second Senate Democrat opposing it this week.

House committees spent the past week shaping portions of the legislation, including the proposal to gradually increase the federal minimum wage to $15 over four years. Early next week, the House Budget Committee is expected to assemble all the pieces into one bill, which House Speaker Nancy Pelosi (D., Calif.) said should pass the full House by the end of the month.

Author(s): Kristina Peterson and Andrew Restuccia

Publication Date: 12 February 2021

Publication Site: Wall Street Journal