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American Workers Are Doing Great. They Could Be Doing Even Better.

Economic Innovation Group

June 26, 2024

Editor’s note: This is one of a pair of essays responding to the Economic Innovation Group’s report, “The American Worker: Toward a New Consensus”, by Adam Ozimek, John Lettieri, and Benjamin Glasner. The other is by Paul Krugman of the New York Times.

To the Economic Innovation Group’s attempt to articulate a “new consensus” about the American worker, I’d respond in three words: I enthusiastically agree. I would articulate that consensus as follows: American workers are doing great. But we should not be satisfied. Workers could be doing even better, and policymakers should have improving economic outcomes for workers as one of their top goals.

EIG is on uncontroversial ground with their conclusion that things could be (even) better for typical workers and households. This, then, would mark a “new” consensus if agreement that workers are doing well were more widely shared. Getting agreement on that point is a tall order.

EIG writes that “many will be surprised” by their view that “the American worker is doing better than at any time on record”. That is an understatement. Politicians from both parties enthusiastically declare that life was better in the past and that the economic system is rigged against typical workers. In their academic papers, many economists simply assume that wages have been stagnant for decades. And economists, public intellectuals, and business and opinion leaders are often at odds with EIG’s reading of the evidence on workers’ outcomes.

Read the full essay here.