This article from the Wall Street Journal of August 2 describes how Hillary Clinton, in keeping with our last two blogs about the planks in her platform and the potential youth movement she could lead if she cared to, is now in a position to raise the U.S. economy from the bottom up.
What follows are extracts from this article:
. . . The real problem American workers face today is getting decent pay for their labor: They need a raise. Or, more precisely, the bottom 99% of workers do. . .
. . . Real wages did better higher up the wage ladder. But even at the lofty 95th percentile, the cumulative gain was only 45% over 42 years, or about 0.9% a year. Meantime, wages for the top 1% rose about 180% over the same period. The next president’s top goal should be to raise wages for the other 99% of Americans. But how? . . .
. . . Hillary Clinton has presented an extensive list of policies that would raise wages, starting with a higher minimum wage. While raising it would affect directly only the very lowest wage earners, evidence suggests that raising the wage floor pushes up other low wages as well.
Mrs. Clinton also advocates widespread profit-sharing as a way to put more money into workers’ pockets. She would promote that goal both by using the presidential bully pulpit and by providing tax incentives for businesses that share profits. Since the scholarly evidence suggests that profit-sharing raises productivity, such tax breaks will partly pay for themselves.
Increased vocational training and apprenticeships for the non-college-bound are also major Clinton policies. . . not everyone is a good candidate for a college degree, and many well-paying jobs don’t require one. The U.S. can increase its productivity and reduce inequality by ensuring that the right people get vocational training and apprenticeships.
And then there is what may be the surest way to raise wages over the long run: providing pre-K education for all American children. Mrs. Clinton has promoted this idea for decades. By now, an extensive body of research shows that children who receive high-quality pre-K education perform better in school, are less likely to be incarcerated later in life, and generally go on to earn higher wages. Only shortsightedness has prevented the policy from being adopted: It takes 15-20 years to realize the payoff from educating a 3-year-old.
Finally, let me add one policy that President Obama and House Speaker Paul Ryan already agree on: increasing the now-paltry Earned Income Tax Credit for childless workers. This tax credit is a wage subsidy, but it is tiny for those without children. Only wage-earners are eligible, so even those concerned about “takers” mooching off “makers” should like the idea. The EITC has enjoyed bipartisan support since it was started during the Ford administration.
Add it all up—a higher minimum wage, profit-sharing, vocational education, apprenticeships, pre-K for all, and a more generous EITC—and you have a policy package that, while no miracle, is almost guaranteed to give American workers a raise. . .
Alan S. Blinder, who wrote this article, is a professor of economics and public affairs at Princeton University and former vice chairman of the Federal Reserve. He is also an informal policy adviser to the Hillary Clinton campaign.