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Scott Jagow: It’s time once again for “What’s the Fix? — our series on solutions for the economy. Commentator Jeff Madrick says there’s one thing that would fix a lot of problems: Better pay for the average worker.
Jeff Madrick: We’ve had a wage crisis in America for 35 years. One number tells it all: The typical man in his 30’s today earns less after inflation than a man in his 30’s did in the 1970’s. The main reason typical family incomes have risen at all over the past 30 years is that women have gone to work.
The wage crisis is a big reason why Americans borrow so much. It’s a big reason why rising health care costs are so painful, why a growing number of mortgages end in default. And it’s a big reason why Americans want their taxes cut even more.
Can government make a difference? Yes. Here are some of the things the new administration and Congress must do:
Enforce the labor laws vigorously. Raise the minimum wage regularly. Enable unions to organize without undue and often illegal management interference. Invest aggressively in transportation infrastructure and energy alternatives.
Make sure the Federal Reserve balances concerns about inflation with worries about jobs. Stop raising interest rates every time there’s a wage hike. And encourage the president to call it as it is when CEOs make outrageous salaries while their workers’ incomes are declining.
My gut is the new president is up to this agenda. But the hard work won’t be over once the economy is back on track.
Jagow: Jeff Madrick researches economic policy at the New School. His new book is called “The Case for Big Government.”
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