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How to Raise Wages

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How to Raise Wages

Policies That Work and Policies That Don’t

EPI,

5 min read
5 take-aways
Audio & text

What's inside?

Can the US address the imbalance between stagnant wages and productivity growth without falling into partisanship?

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Editorial Rating

8

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Recommendation

Economists Lawrence Mishel and Ross Eisenbrey of the Economic Policy Institute note that wages in the United States have stagnated for years, even for college-educated workers, while productivity has soared. That’s probably the only point in this paper that will win agreement from fiscal conservatives. Much of the advice here – such as raise the minimum wage and offer paid leave, but skip the tax cuts – falls along partisan lines. Though always politically neutral, getAbstract recommends this report for the way it deftly limns critical wage and growth issues.

Summary

Wage stagnation in the US has roused politicians on both sides of the aisle, but they can encourage pay growth by aiming for full employment. Policy makers should strive for 4% unemployment, a level that would swing the wage equation back toward workers. These approaches can boost employment:

  • “Monetary policy” – The Federal Reserve should not put the brakes on the economy by raising interest rates until wage growth reaches 3.5% to 4%.
  • “Targeted employment programs” – Even with the market improving, joblessness remains high for minority and low-paid workers. ...

About the Authors

Lawrence Mishel and Ross Eisenbrey are president and VP of the Economic Policy Institute.

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