Wednesday, August 03, 2016

Only One Candidate Can Make Wages Grow Again

Rather than bluster, Clinton offers a series of serious policy proposals designed to boost incomes.

By Alan S. Blinder, WSJ
Aug. 1, 2016 6:46 p.m. ET

Can you remember the second day of the Republican National Convention? That was supposed to be economics night, with the advertised theme “Make America Work Again.” Awkwardly put, yet the phrase suggests that America suffers from mass unemployment and that Donald Trump’s braggadocio would bring the jobs back. Both notions are false.

The unemployment rate, which peaked at 10% in the aftermath of the Great Recession, has been at or below 5% all year. The American job machine has created more than 14 million net new jobs since employment bottomed out in 2010. Yes, jobs remain scarce for some people, in some places and in some occupations. And the labor-force participation rate could be higher. Still, more Americans are working than ever before.

The real problem American workers face today is getting decent pay for their labor: They need a raise. Or, more precisely, the bottom 99% of workers do.

The median inflation-adjusted hourly wage grew only 5.7% from 1973-2015, according to astonishing data compiled by the Economic Policy Institute. That comes to 0.1% a year. Worse yet, wage gains have been even more meager for workers below the median. If you want to understand why the typical American worker is angry, start here.

Real wages did better higher up the wage ladder. But even at the lofty 95th percentile, the cumulative gain was only 45% over 42 years, or about 0.9% a year. Meantime, wages for the top 1% rose about 180% over the same period. The next president’s top goal should be to raise wages for the other 99% of Americans. But how?

Last year, Mr. Trump evinced deep concern over low wages by opining that “our wages are too high.” Too high for whom? Though he has occasionally paid lip service to increasing the minimum wage, his actual views on wages remain enigmatic. Scanning the Republican platform, I found two suggestions for raising wages: limit immigration and lower the corporate income tax. If you liste

(More here.)

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