Friday, February 15, 2013
In a column this morning for Wonkblog,Ezra Klein published the following graph as a justification for raising the minimum wage. So here is the "logic" - labor's share of income is falling as corporate profits have risen which argues for a higher minimum wage. Bonehead thinking would be a nice way to describe this thinking.
Mr. Klein fails to recognize the tremendous increases in productivity that have occurred since 1970 - wouldn't that fact alone change the ratio of labor income to corporate profits? But then there is the added notion that by raising the minimum wage one will get resources to the most productive parts of the labor market.
Wow, is that graph anything more than the juxtaposition of one evil of the left (corporate profits) with a statistic so aggregated as to not tell us much about anything?