Americans’ wages are rising, but not fast enough to keep up with the costs of living. Moreover, almost half of American workers make under $30,000 a year, even as the costs of housing and healthcare skyrocket. What can be done about this? It’s a question worth asking. There are two points of policy necessary to raise wages.
The first is to increase workers’ power. Workers need a seat at the table of the companies that are able to exist because of their labor. That not only means unionization, it also means that workers should have representation on company boards.
The second point is to create a national wage floor. There are two ways to do this: raising the minimum wage, and providing wage subsidies.
Wage subsidies are a government payment that “tops off” the wages of a worker, in accordance with a wage floor. Let us suppose that the floor was $12 an hour. A worker making $10 an hour would receive an additional $2 for every hour worked. This policy is good, and needs to be deployed. However, it cannot be deployed alone. If it were, states with low minimum wages would benefit from the subsidization of low-wage work.
So, increasing the federal minimum wage is needed. Make the wage floor $15 an hour. To do that, raise the minimum wage to $12 an hour. Provide wage subsidies that will boost every worker’s pay to $15 an hour, and index the combined wage floor to inflation. If one wanted to be ambitious, one could even raise the floor to $17 an hour.