Full Employment Is Good for Society
-
MLK Day op-ed by Paul Krugman:
https://www.nytimes.com/2024/01/15/opinion/full-employment-economy-mlk.html
Full Employment Is Good for Society
...
I’ve written about work by David Autor, Arindrajit Dube and Annie McGrew showing that the post-Covid economic recovery has produced especially large wage gains at the lower portion of the scale, compressing the wage distribution. Wages in America are still highly unequal but not as unequal as they were just a few years ago. In fact, they found, we’ve reversed almost 40 percent of the rise in one key measure of inequality that took place during the great income divergence from 1979 to 2019.
.
And because lower overall inequality disproportionately helps Black Americans, one effect has been a “historic reduction in racial wage disparities,” Dube posted on social media.
.
Why did wage inequality fall? A number of states increased their minimum wages. Unions won some victories, and fear of unionization may have pushed some employers to increase pay. The main factor, however, was surely a tight labor market: Full employment greatly increases workers’ bargaining power.
.
Full employment also did wonders for another aspect of racial disparities: high Black unemployment. Last hired, first fired is still a very real fact of race relations in America; one measure of our success in finally achieving something like full employment is that the gap between Black and white unemployment rates is the smallest it has been since the government started collecting data on the subject.
...
