Re: Radical Solutions for a Crazy Crisis
Boost the economy in a radical way for America -- conventional, almost old fashioned for the rest of the modern OECD world -- pay labor the maximum its utility will justify, not the least the race to the wages and benefits bottom can squeeze it price down to.
Quickest jump start for the economy -- with only $350 billion? Which the taxpayer wont have to ante up?
Double the federal minimum wage which will shift about $350 billion (2 1/2 % of the cost of GDP output or 4% of personal income share) into the pockets of the 40% lowest wage Americans -- who would spend it not save it. ($500/wk -- today's 40 percentile wage! -- still not be enough to cover a realistic minimum needs budget for a family of two -- today's 40 percentile wage!).
2 1/2% is about how much GDP grows every couple of years. If everyone got their inflation raises but forwent their growth raises, a doubling of the minimum wage could pass almost unnoticed for half the country.
Doubling the minimum wage would only be the beginning of the larger overhaul of our underpaying labor market. Re-institute fair and balanced bargaining power via sector-wide labor agreements. Only sector-wide collective bargaining has the potential to eventually shift the other 11% of income share lost by the bottom 90% of earners (15% altogether) to the top 3% over the past three and a half decades.
Takes years to raise the minimum wage (three years?; $1 every 6 months?)? Would take time to convert our labor market to even the French-Canadian "lite" version of sector-wide (in French-Canada non-union firms merely accept terms worked out by non-union firms)? Once 90% of the workforce are assured they are in for (continuous) raises, in proportion to their propensity to spend, IOW in proportion to how unnecessarily (working) poor they are now, everyone's wallets will open up again.