STRAWMAN WATCH….Mickey Kaus thinks economic growth and tight labor markets are the key to low-end wage growth. Unions aren’t. I disagree, and a few days ago wondered how Mickey proposed to get to his paradise of endless economic growth anyway. Today he responds:
And Drum has a plan for “low-end wage growth” that doesn’t involve restoring the economy? Good luck with that. There’s a double Nobel waiting for him, I guess. A triple Nobel if he can boost wages at the bottom while simultaneously letting in millions of unskilled low-wage immigrants. … P.S.: Drum seems to be explicitly embracing “pie-slicing” redistributing shares of a non-growing economy as an alternative to “pie enlargement.” Nothing, at first glance, so terribly wrong with that. But can Drum point to a period in modern American history when low-end wages grew without an expanding economy?
Is this supposed to be serious? For the record: yes, of course I support economic growth. Of course it’s a precondition for low-end wage growth. I’ve never even hinted at anything so idiotic as “redistributing shares of a non-growing economy.” But we’ve had economic growth for most of the past three decades and it hasn’t been enough to boost median wages more than a smidge. It’s pretty obvious by now that we need more than just economic growth to get median (and low-end) wages growing again, and I think greater union density (it’s currently less than 10% in the private sector) is probably part of the answer.
As for reducing the influx of low-wage immigrants, I’m fine with that. I always have been though I have different ideas about how to get there than Mickey. Still, the evidence suggests that this will have only a tiny effect on low-end wages. We’re going to need a better plan than just building a fence along the southern border.