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Raising The Minimum Wage, As President Obama Proposed In His State Of The Union Address, Tends To Be More Popular With The General Public Than With Economists.

-Christina Romer

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Raising The Minimum Wage,

Christina Romer

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Raising The Minimum Wage, As President Obama Proposed In His State Of The Union Address, Tends To Be More Popular With The General Public Than With Economists.

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President Obama Has Repeatedly Urged Congress To Let The Bush Tax Cuts Expire For Those Earning More Than $250,000 A Year. Increasing Rates On Top Earners Is An Obvious Way To Raise Revenue From Those Who Can Afford It Most.

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I Think Something That Forces Financial Institutions To Write Down Underwater Mortgages, I Think, Would Be A Sensible Thing To Do.

I Think Where I Differ A Little Bit, We Absolutely Have To Think About The Deficit Looking Down The Road. And Certainly That's Something The President Has Said That We Need To, As The Economy Recovers, Have A Plan In Place For Getting It Down.

Making Labor Less Expensive Helps Firms Hire People.

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You Care About The Deficit Because It Allows You To Do Things You Need To Do To Help People Who Are Suffering.

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If You Think About It, Candidate Obama, Sen. Obama, Was Running On Sort Of Long-run Economic Issues, Like Restoring Prosperity To The Middle Class, Dealing With The Perennial Problem Of Health Care In The United States. He Talked A Lot About The Budget Deficit, About The Need To Transition To Clean Energy.

Raising The Minimum Wage, As President Obama Proposed In His State Of The Union Address, Tends To Be More Popular With The General Public Than With Economists.

Tax Increases Appear To Have A Very Large Sustained And Highly Significant Negative Impact On Output.

Fewer People Working Means Permanently Lower Tax Revenues.

In The Four Decades After World War Ii, Manufacturing Jobs Paid More Than Other Jobs For Given Skills. But That Is Much Less True Today. Increased International Competition Has Forced American Manufacturers To Reduce Costs. As A Result, The Pay Premium For Low-skilled Workers In Manufacturing Is Smaller Than It Once Was.

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Many Of My Students Assume That Government Protection Is The Only Thing Ensuring Decent Wages For Most American Workers. But Basic Economics Shows That Competition Between Employers For Workers Can Be Very Effective At Preventing Businesses From Misbehaving.

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A Successful Argument For A Government Manufacturing Policy Has To Go Beyond The Feeling That It's Better To Produce 'real Things' Than Services. American Consumers Value Health Care And Haircuts As Much As Washing Machines And Hair Dryers.

If Increasing Income Equality Is The Goal, It Might Be Wiser To Put Money Into Infrastructure Than To Subsidize Manufacturing. Construction Also Pays Good Wages, But With Lower Educational Requirements. And America's Infrastructure Needs Are Enormous.

As An Economic Historian, I Appreciate What Manufacturing Has Contributed To The United States. It Was The Engine Of Growth That Allowed Us To Win Two World Wars And Provided Millions Of Families With A Ticket To The Middle Class. But Public Policy Needs To Go Beyond Sentiment And History.

Most Arguments For Instituting Or Raising A Minimum Wage Are Based On Fairness And Redistribution. Even If Workers Are Getting A Competitive Wage, Many Of Us Are Deeply Disturbed That Some Hard-working Families Still Have Very Little.

If Every Other Store In Town Is Paying Workers $9 An Hour, One Offering $8 Will Find It Hard To Hire Anyone - Perhaps Not When Unemployment Is High, But Certainly In Normal Times. Robust Competition Is A Powerful Force Helping To Ensure That Workers Are Paid What They Contribute To Their Employers' Bottom Lines.

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