Submission statement: given rising inequality and sluggish wage growth, labor economist Arindrajit Dube proposes the United States adopt Australia style wage boards (which in his view have helped median wages to track much more closely to median wages than in the US) that set the minimum wages for occupations and sectors at the 35th percentile
They would be set up to include representatives from workers and employers and revised continuously in light of economic conditions. In areas where unionization is low workers would be selected by jury, in areas where it is higher or passes a threshold, unions may appoint some of the representatives as well.
>As shown in Figure 4, overall, both the high and low scenarios imply substantial wage gains, especially for the bottom and middle of the wage distribution. Under the low scenario, the 20th, 40th and 60th percentile wage rises by 13, 9 and 4 percent, respectively. **When we consider the higher scenario the wage gains extend somewhat further: wages at the same percentiles would rise by 19, 15 and 12 percent, respectively.** It is useful to contrast these distributional impact of wage boards with those from typical minimum wage increases in the U.S, which mostly fade out by the 20th percentile of the wage distribution. In other words, wage boards are much better positioned to deliver gains to middle-wage jobs than a single minimum pay standard.
This is a substantial increase in real wages for a majority of the distribution and reverses like half of the increase in income inequality over the past few decades.
The fact that the wage board sets it by occupation allows for wage increases to occur much further up the income distribution than minimum wages.
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Submission statement: given rising inequality and sluggish wage growth, labor economist Arindrajit Dube proposes the United States adopt Australia style wage boards (which in his view have helped median wages to track much more closely to median wages than in the US) that set the minimum wages for occupations and sectors at the 35th percentile
They would be set up to include representatives from workers and employers and revised continuously in light of economic conditions. In areas where unionization is low workers would be selected by jury, in areas where it is higher or passes a threshold, unions may appoint some of the representatives as well.
>As shown in Figure 4, overall, both the high and low scenarios imply substantial wage gains, especially for the bottom and middle of the wage distribution. Under the low scenario, the 20th, 40th and 60th percentile wage rises by 13, 9 and 4 percent, respectively. **When we consider the higher scenario the wage gains extend somewhat further: wages at the same percentiles would rise by 19, 15 and 12 percent, respectively.** It is useful to contrast these distributional impact of wage boards with those from typical minimum wage increases in the U.S, which mostly fade out by the 20th percentile of the wage distribution. In other words, wage boards are much better positioned to deliver gains to middle-wage jobs than a single minimum pay standard.
This is a substantial increase in real wages for a majority of the distribution and reverses like half of the increase in income inequality over the past few decades.
The fact that the wage board sets it by occupation allows for wage increases to occur much further up the income distribution than minimum wages.
California has pioneered this with the fast food industry to seemingly [benign](https://www.nber.org/system/files/working_papers/w35171/revisions/w35171.rev0.pdf) results
It’s definitely a proposal looking into as dems workshop ways to raise the standard of living more broadly.
[Profile of Dube and his academic work and policy ideas](https://www.newyorker.com/news/the-financial-page/an-economists-quest-to-solve-americas-wage-problem?utm_source=chatgpt.com)
!ping LABOR&ECON