Wednesday, January 18, 2017

another unpublished letter to the editor of the C-J

I appreciate Jason Bailey’s focus on employment, jobs, and wages in his recent op-ed piece for the C-J. (A few weeks later, Steve Gohmann-- an econ prof buddy of mine at U of L-- hit the C-J op-ed page with a nice response.)

Bailey correctly notes that the popular unemployment statistics paint an inaccurate picture by ignoring “discouraged workers”. They are no longer looking for work (according to the government) and are not counted by the government as “unemployed”. To Bailey’s point, it’s worth adding that much of the job growth over the last eight years has been part-time. This has been driven by the incentives to avoid hiring full-time workers through the Affordable Care Act. This further masks the economic damage of the last decade.

From there, Bailey advocates a “significantly higher minimum wage”; supports “prevailing wage” laws; and opposes “right-to-work”. But these are not helpful for his stated goal of increased employment. The minimum wage increases the cost of hiring less-skilled workers, making it more painful to hire them. Avoiding “right-to-work” and keeping “prevailing wages” would be good for those in labor market cartels. But these laws artificially increase costs, making it more difficult for businesses and consumers to increase economic activity.

Bailey properly notes the role of education in improved productivity—and thus, jobs, wages, and compensation. With the new administration, hopefully we can look forward to structural reforms in K-12 education that would add more competition, such as public charter schools and an extension of the GI Bill to children.


Post a Comment

Subscribe to Post Comments [Atom]

<< Home