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What We Owe Essential Workers

Summary:
The praise in America for low-paid essential workers on the front lines of the COVID-19 pandemic is long overdue, but it should be followed with meaningful reforms. Beyond raising the federal minimum wage, the United States desperately needs to overhaul its approach to technological innovation. BOSTON – The low-wage workers who make up nearly half of the US workforce have long been neglected, steadily falling behind highly educated workers in expanding industries such as technology, finance, and entertainment. Since the 1970s, real (inflation-adjusted) wages have stagnated for prime-age men with less than a college education, and declined significantly for those with a high-school education or less.

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The praise in America for low-paid essential workers on the front lines of the COVID-19 pandemic is long overdue, but it should be followed with meaningful reforms. Beyond raising the federal minimum wage, the United States desperately needs to overhaul its approach to technological innovation.

BOSTON – The low-wage workers who make up nearly half of the US workforce have long been neglected, steadily falling behind highly educated workers in expanding industries such as technology, finance, and entertainment. Since the 1970s, real (inflation-adjusted) wages have stagnated for prime-age men with less than a college education, and declined significantly for those with a high-school education or less.

Many of these workers find themselves on the front lines of the COVID-19 crisis, where they serve as hospital orderlies, nursing home aides, warehouse and delivery workers, and grocery clerks. Now that there has been a groundswell of (belated) appreciation for their contributions to the economy and society, the question is whether America can use this moment to turn things around for the bottom 50%.

Change is possible, but not assured. In an age of big-money politics and union bashing, the bargaining power of low-wage workers – especially minorities – has shrunk, together with their economic fortunes. Consider the federal minimum wage: at $7.25 per hour, it has actually declined by more than 30% in real terms since 1968. A first step, then, would be to raise it to $12 per hour. This would increase earnings at the bottom of the income distribution, and likely have only a minimal effect on overall employment.

A harder challenge is to restore workers’ bargaining power. Though political decisions over the past 40 years have...

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