Presidential Candidates Ideas for Boosting Wages Reveal Different Diagnoses
With unemployment low, decent growth anticipated for this year and the Federal Reserve preparing to raise interest rates, America’s economy looks rosier. That has not stopped candidates for president from worrying about it. With the economy back on its feet, the presidential hopefuls want to address a longer-term condition: stagnant wages. Median household incomes remain lower in real terms than in 1989, and only 11% higher than in 1970. Talk of the death of the American dream is rife. The candidates have suggested a variety of reviving strategies, each of which reveals a different diagnosis of the underlying problem.
The first idea is to boost growth. Most economists reckon GDP rose by around an annualised 2.5% in the second quarter—strong, by today’s standards. But it lags the pace achieved, say, from 1996 to 2000, when annual growth topped 3.5%, and real median incomes grew by 10% to boot.
Read the article “Presidential Candidates Ideas for Boosting Wages Reveal Different Diagnoses” on economist.com.