Look at the jobs num­bers since we cut long-​​term unem­ploy­ment ben­e­fits in Jan­uary. Do you see a big increase in employ­ment? No, nei­ther do I, even when I squint.

Now, cut­ting off ben­e­fits was sup­posed to encourage all those lazy, unem­ployed workers to go out and get jobs. Instead, more and more of the long-​​term unem­ployed have become dis­cour­aged and have left the labor force alto­gether. How, exactly, will they find jobs when there are three times as many job seekers as job vacan­cies? I don’t know.

Jobs today are demand-​​constrained, not supply-​​constrained. Busi­nesses aren’t failing to hire because they can’t find willing workers; they’re failing to hire because they can’t find enough cus­tomers. Slashing unem­ploy­ment ben­e­fits —which reduces incomes, and, hence, con­sumer spending — has only caused more misery for many, with little to no apparent gain.

This is still our biggest eco­nomic crisis, and still our biggest policy failing. Which brings us to Pres­i­dent Obama’s pro­posal to raise the min­imum wage from $7.25 to $10.10 an hour. Although it was increased a few years ago, the national min­imum wage is still low by his­tor­ical stan­dards, having con­sis­tently lagged both average wages and infla­tion. The ques­tion, though, isn’t how high or low the min­imum wage is rel­a­tive to the past. The ques­tion is whether it would be good policy now. And the answer, per­haps sur­pris­ingly, is yes, but only if it excludes the long-​​term unem­ployed — and only if we make up for that by sub­si­dizing their wages with an expanded Earned Income Tax Credit (EITC).

Read the article at The Washington Post →