Krugman: Three Charts on Secular Stagnation

[lumberjack_jeff]

9. 1) raise the tax rate on investment income to the same level as that on labor

2) Reduce the work week to 32 hours and/or raise the overtime premium to 2x rather than 1.5x.
3) Halve the number of student visas then halve the number of H1B visas four years later. The STEM classes will be filled by citizens who will then have the training to do those jobs.

Wages have been falling because the size of the workforce is growing (creating a labor surplus). In 1970, few women and people over 65 were in the workforce. The gains in women's wages can't entirely mitigate for the drop among men. This is also one of the reasons for the big demand for college... because of the surplus of labor, there's nothing else for 18 year olds to do.



Raising the minimum wage is good because it improves the lives of people at the bottom end of the labor ladder, but I don't see it as a panacea for the economy generally.