Must-Read: Adam Ozimek: The New Liberal Consensus Is a Force to Be Reckoned with
Low wages… are not the product of inscrutable market forces, but rather choices… connecting rising income inequality with the decline in workers’ bargaining power.
It’s not just Paul Krugman and liberal politicians like Barack Obama and labor secretary Tom Perez embracing this ‘new consensus’ either. Even some centrist economists like Larry Summers and Robert Rubin have been making similar arguments…. This is… a conclusion that is drawn from recent trends in empirical research… Arin Dube and coathors… Justin Wolfers, Adam Posen, Jacob Funk Kirkegaard and others…. An increasing number of pundits and economists who look at the literature on minimum wages and other research on labor markets and conclude that the stronger unions, higher wages, and more labor market regulations are a good idea…. Those who don’t buy the ‘new consensus’, again including myself, have a lot to worry about…. Rebuttals are piecemeal, attacking the minimum wage or unions alone, while the new consensus provides a whole story. Just as importantly, those voicing dissent are outnumbered…. Nobody else has a very easy-to-tell story right now, or at least those that do have good stories aren’t addressing the recent trends in empirical evidence…. Right now, new liberal consensus proponents have the upper hand in this argument, at the very least rhetorically and certainly in terms of sheer quantity of output and controlling the conversation. Libertarians, conservatives, old fashioned neoliberals, and other liberals who disagree need to do a better job. I suspect there are actually a lot of liberal economists who don’t embrace this new consensus, but we aren’t hearing much from them. This consensus appears to be a big part of Hillary Clinton’s economic agenda, so if there are going to be alternatives now is the time to speak up.