"Wages Must Fall!": Matt Yglesias Edition
By Bryan Caplan
The depressing truth is that the easiest way to bring good, high-paying
manufacturing jobs back to America is to make them less good and less
[T]he reality is that story that begins with mass unemployment is
inevitably going to end with lower average real wages. The hope is that
the increase in the number of employed people and the increased
availability of full-time work leads to higher real incomes.
Matt’s inspiration? Another apparently good Keynesian at the New York Times:
Manufacturers are hiring again in America, softening a long slide in
factory employment. But for a new generation of blue-collar workers,
even those protected by unions, the price of employment is likely to be
lower wages stretching to retirement.
The NYT details the erosion of dysfunctional fairness norms:
The shrunken pay scale for newcomers — $12 to $19 an hour versus $21 to
$32 an hour for longtime workers — threatens to undo the middle-class
status of even the best-paid blue-collar jobs still left in
In an earlier era, that would have been a source of friction, perhaps
protest. Now it isn’t, and in an interview William Masden, 62, earning
$31.78 an hour after 42 years at Appliance Park, attempted an
explanation. The younger workers still get annual raises, he noted, and
by the time they top out, he and his peers — the oldest baby boomers —
“won’t be here any longer to remind them of what they are missing.”
My proposed New Year’s resolution for all Keynesians: Learn from Matt Yglesias and the New York Times. Say it with me, my Keynesian brothers and sisters: Wages must fall!