A Quick Boost for the Economy -- a $12 Minimum Wage: Interview with James K. Galbraith

[Better Believe It]

A Quick Boost for the Economy -- a $12 Minimum Wage
James K. Galbraith: Raising the minimum wage would boost demand and give millions a better wage

Transcript excerpt from video interview with James K. Galbraith:

PAUL JAY, SENIOR EDITOR, TRNN: If there's—one thing most economists agree with is there's not enough demand in the economy. People just don't have enough money to buy stuff. And that mostly has to do with stagnant wages, and then unemployment, although the two things are awfully connected with each other. Well, is there one thing that could be done to deal with this quickly?

GALBRAITH: Well, as you know, for many years now a great many of us have been saying that the government should be in the business of creating more jobs directly or indirectly with an expansionary program. And we have been blocked on that avenue, basically. At the moment, the debate has been dominated by debt and deficit worriers, one might even say hysterics. What I propose, therefore, is a measure that would not involve increasing federal budget expenditures and would in fact modestly reduce the deficit. And that proposal is to raise the minimum wage and to raise it very substantially.

JAY: How much would you raise it?

GALBRAITH: Oh, I would say $12 an hour from the present, you know, and change. So a very substantial amount, enough to make a material difference in the lives of a large part, of a substantial part of the working population, and therefore to change their household balance sheets to give them a substantial increase in purchasing power. That's the idea behind this suggestion.

GALBRAITH: Well, for most people who are being paid substantially more than that, the effects would be very small. For manufacturing in general, the effects would be practically nil, because there are almost no manufacturing jobs that are being paid less than that now. So we can—most people would not see this directly in their paycheck. A significant number of low-wage workers would. A significant number of women workers would. And it would improve conditions vary significantly in the relatively low-wage parts of the country. It would not make much of a difference in New York, but in the south of Texas the effects would be, you know, substantial—anyway, they would be material. So that's, I think, broadly how I'd answer that question.

Read or view the entire interview at:

http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=8114

[phantom power]

1. It ought to be raised every year, by 2%

[joeybee12]

2. The deficit phony argument is simply one of the ways to keep wages low...

and corporate profits high.

[unblock]

3. yay! a solution that addresses the actual problem: a demand-starved economy

all washington can talk about is supply-side crap.
tax incentives and subsidies and other forms of welfare for rich people and for businesses.

solutions to problems we aren't facing, while ignoring the problems we are.

the economy sucks because people can't afford to buy as much stuff as they used to.
partly because of the very weak labor market, partly because of very weak labor unions, partly because of over-endebtedness, partly because of the sucky real estate market, and so on.

yet no one in washington dares to offer a solution that addresses the actual problem.

helping the poor and (lower)-middle class would not just help those people directly, it would be a HUGE boon to businesses that would quickly find a way to get their grubby mitts on those funds. voila, booming economy.

so simple it completely escapes washington.