IncomeInequality #MinimumWage #productivity #WageGrowth
It isn’t a low minimum wage that has enlarged the income inequality gap.
Nor is it the greed of the top 1 percent, or the recently approved tax cuts that has caused a lack of bounce for the middle and lower classes during the economic boom.
So says Edward P. Lazear, a former chairman of the President’s Council of Economic Advisers and currently a professor at Stanford University’s Graduate School of Business. He discussed the matter in a May 7, 2019, column in The Wall Street Journal.
Lazear, who is also a Hoover Institution fellow, believes the higher earners are simply more productive, with the help of technology.
“Wage growth for the median worker has stalled at about 0.5 percent in the U.S. , Canada and France,” Lazear writes. In Japan, he continues, there is no growth at all.
His conclusion: future technological advances will widen the gap. The demand for lower-skilled labor will fall. We can’t really stop technological advances, and guaranteeing a wage would merely patch the problem, he says. The solution is to narrow the productivity gap by raising the skills of the lower and middle class workers.
Lazear is correct in his thinking, so how do we, as a country, raise the skills of lesser skilled workers?
There are many programs, and many employers who have initiated programs to do that, but it has yet to make a dent in the productivity gap.
Schools have tried to focus on improving skills for lesser skilled workers. But not all of those workers qualify to get into certain schools.
Plus, these lower skilled workers may be at a stage in their lives in which going back to school for several years to earn a new skill is practically difficult, or will not give them enough good years on the other side to get a sufficient payback from all that education.
Also, you have the problem of fast changes. So, the new skills a worker may have spent years learning may be usurped by even newer skills. So, all that time spent going to school to learn new skills that have been usurped may be wasted.
So what’s a working-class person have to do to get ahead?
Fortunately, there are many vehicles out there that allow a person who spends a few part-time hours a week (maybe even a smaller time commitment than going back to school) to earn a potentially good income. That person just needs to be open to looking for them, and, congruently, at them.
To check out one of the best such vehicles, message me.
In the past, labor unions could retard technological growth and efficiencies with rules that companies had to follow. Unions don’t have the clout they once had, and that may be a good thing in the modern age because change happens much more quickly than in decades past.
The lesser skilled workers first have to realize that government is an unlikely solution to the problem. It will be up to workers themselves to decide what to do. You can’t stop an ocean wave, and you can’t stop changes in the workplace.
But you can decide that you’re going to make changes in your own life to not only ease your financial burden, but also create a life for you and your family that could be better than you’d ever envisioned.
So, instead of expending valuable energy worrying and complaining about your situation, income inequality or the good fortune of others, create your own good fortune, however it works for you.
We are all capable of changing our lives. But not everyone is willing to step outside his or her comfort zone to do it.
Peter