Morning Must-Read: Dean Baker: David Leonhardt Wonders Why Its Cold In the Winter and Wages Aren’t Rising

Dean Baker: David Leonhardt Wonders Why Its Cold In the Winter and Wages Aren’t Rising: “The economy is still way below potential GDP….

…The employment to population ratio is still close to 4.0 percentage points below its pre-recession level. Even if we restrict the question to prime age workers… to eliminate the issue of retirement, the drop is still 3.0 percentage points. The share of the workforce involuntarily working part-time is still more than 50 percent above its pre-recession level…. There is still a large amount of slack in the labor market…. With the answer right in front of him, like the French colonel in Casablanca, Leonhardt rushes to round up the usual suspects…. Unfortunately, the data refuse to cooperate…. The wages for recent college grads has fallen sharply since 2000…. The obvious issue is that we need more demand in the economy. That can be most easily accomplished with more government spending…