Yves Smith, in response to a Slate article about a $15/hour minimum wage:
Ignore the scaremongering. In most parts of the US, that means people are being paid less than a living wage. And the author manages to overlook the fact that corporate profits are at a record share of GDP, nearly double the level Warren Buffet deemed the highest sustainable level in the early 2002, and that shift is due to both of the post 2000 expansions featuring the lowest share of labor income increases (hiring + wage gains) relative to all past post-WWII expansions. In other words, redistribution is overdue and would almost certainly be a plus for growth.
Whenever I read economists getting butthurt about the redistributionary effects of a high minimum wage, it’s worth remembering the healthcare system in the U.S. costs at least thirty percent more than it should, to the tune of over $600 billion. Yet there seems to be far less concern about this reallocation of money.
Interesting, that.
mikethemadbiologist
Redistribution isn’t overdue. It’s overdone. Except that the redistribution we’ve seen is in the wrong direction: from the lower and middle classes, to the upper class. It’s been achieved via lower marginal tax rates, lower capital gains tax rates, and lower dividend rates, combined with reduced affordability of college and the gutting of defined-benefits retirement policies.
Let’s not forget also that with that minimum wage people at the bottom rung of the wage ladder will work fewer hours through second and third jobs, making room for more workers. It might be a step toward UBI (universal basic income)…
Hard to believe that money is wasted on higher wages, when the best “investment” our corporate masters can dream up is buying back their own stock.