The Hamilton Project’s “Revitalize Wage Growth” Event

March 1st, 2018 at 8:45 pm

All the speakers and panels were flush with interesting analysis and practicable policy ideas to reverse wage stagnation, so give this Hamilton Project event a look. But my chat with Minneapolis Fed President Neel Kashkari and CNBC’s Ylan Mui starts at around 1:16.

Here’s my paper that I so mercilessly flack in my comments.

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4 comments in reply to "The Hamilton Project’s “Revitalize Wage Growth” Event"

  1. JF says:

    Look into these to add to the agenda:

    1. Declare marginal income subject to the schedule of income tax rates as being related to net worth, so those over a high net worth consider all income from any source to be on their margin of economic capability
    2. Direct this added ‘surcharge’ revenue to Social Security Act programs in concert with point three that follows here
    3. Flatten the employee contribution to the basics of the SS system to 5 percent of wages up to a higher amount than now, using the added revenues of the change in the income tax to finance the system.

    The point is to honor work more than capital gains, encourage more domestic employment by lowering the payroll tax burden confronted by employers, support higher wages for the non-retired workforce to support higher demand as a result too, while reminding all employees that they are earning a return on the net worth success of the US that they help to build and sustain (the same for retirees, who would be ensured about their returns by locking these postures into place as the fundamentals of the SS system, earnings not welfare or even insurance in nature, though there are insured aspects such as SSI, dependent rights, etc.).

    Prioritize these work support aspects over the arcane Fed stuff. If you have the votes to pass the package then complementary directions to the Fed can be done at that time in the financial system title of the bill (bank credit aspects could be included on this title too, whatever these might be).

    Thanks for considering.

  2. Denis Drew says:

    I’m trying to come up with an abstraction that is able to alert progressive academics that a 94% de-unionized labor market is AUTOMATICALLY a 94% defective market. Something akin to the so-called natural rate of unemployment — which has a certain bar that mostly everybody recognizes. A “natural rate of collective bargaining” (NRCB)?

    Let’s look a the US. Let’s say 20% of our workforce is in what could be called perfect competition condition — meaning they get paid about the max the ultimate consumer of their services would be willing to pay (near the top 1% a lot more). _Equal-gratification_ equilibrium. I would peg the expected coll barg rate should be close to 100% of those outside this perfect competition zone (effectively moving them into the perfect zone).

    94% of the other 80% of the US labor force cannot bargain effectively without collective bargaining. I call that _split equilibrium_: labor takes whatever price it can get along the subsistence-plus/race-to-the-bottom wage scale.

    High NRCB looks a lot like a lot of continental Europe — a lot like Germany or Canada. The NRCB measure could even point out something defective in the latter. And the Grand Canyon wide gap between other modern economy’s moderate NRCB deficiencies and the almost 100% defective American rate.
    * * * * * *
    AUTOMATIC solution: our coming Dem Congress can mandate union certification and re-certification elections in every private workplace; one, three or five years, plurality rules on the latter. Labor in other counties does not have to run the kind of almost impossible gauntlet that American employees do (unique in all the first world — and a lot of the second and third (Argentina and Indonesia even have sector-wide bargaining).

    Mandated elections would AUTOMATICALLY become the hottest issue (maybe in a hundred years) by simple logistics, not even merit, for the simple reason it would affect virtually every single household and most to the core.

  3. Fedup says:

    There is a way to increase labor demand without using monetary or fiscal policy: aggressive antitrust prosecution. Break up anything even close to a monopoly, and regarding patent laws, force the sharing of patents among the split companies. The strange reality of a capitalist economy is that a less efficient use of financial capital creates a more healthy and balanced economy.

    In a related issue, regarding the issue of ending unethical/unpatriotic/illegal behavior by corporations, there should be 2 mechanisms in play rather than 1. Currently only government regulation is in play, and it often doesn’t work very well due to regulatory capture. However, if there is a strong labor demand workers can choose which companies they want to work for, and they can effectively boycott bad companies. Consumer boycotts are next to impossible to create. Worker boycotts by high-productivity individuals (I’m not talking about unions here) with ethics would be a more effective mechanism to force the companies to change or go out of business.