The idea of a $15 minimum wage, which already has been approved in San Francisco, Seattle and Los Angeles, may sound great, but the impact likely won't be so hot, says Washington Post columnist Robert Samuelson.
To be sure, "some increase in the federal minimum is justified," he writes.
"It’s been at $7.25 since 2009. Inflation has eroded its value 10 percent since then."
So what's the problem with a hefty increase? "Raising it to $15 or even $12 would be a radical act that front-loads the benefits and back-loads the costs," Samuelson says.
Job losses would mushroom, he argues. "Some companies would become unprofitable and shrink or close. Others would automate. Some start-ups would be scrapped."
As for how many jobs would be lost, the American Action Forum, a right-leaning think tank, estimates it would be 1.3 million for a $12 minimum and 3.3 million for a $15 minimum.
And unfortunately, "the least-skilled workers might suffer the largest losses, especially if higher wages draw experienced people back into the labor market," Samuelson says.
The economy added 223,000 jobs in June, but the labor participation rate dropped to a 37-year low of 62.6 percent.
Meanwhile, boosting the middle class currently occupies much of the attention of U.S. politicians and economic policymakers. But some of that focus is misplaced, says Harvard economist Martin Feldstein.
"The middle class has been doing much better than the statistical pessimists assert," he writes on Project Syndicate. "And with better policies, these households can do even better in the future."
Take average household income figures. Some Census Department data back up the idea that income has barely risen, if at all, in recent decades, says Feldstein, who chaired the Council of Economic Advisers under President Reagan.
"But more accurate government statistics imply that the real incomes of those at the middle of the income distribution have increased about 50 percent since 1980," he says. "And a more appropriate adjustment for changes in the cost of living implies a substantially greater gain."
That would put the increase of household income at almost 2.5 percent annually over the last 30 years.
Improving existing government programs can lead to even more progress for the middle class, Feldstein says. That includes expanding market-relevant training and tax reform to boost productivity and wages.
© 2021 Newsmax Finance. All rights reserved.