David Howell

David Howell is a professor of economics and public policy at The New School (New York City)

Recent Articles

Reframing the Minimum-Wage Debate

Why “no job loss” is the wrong standard for setting the right wage floor.

(Photo: AP)
This article appeared in the Summer 2016 issue of The American Prospect magazine. Subscribe here . After experiencing substantial wage gains during the shared-growth decades of the postwar era, American workers have increasingly confronted labor markets of precarious jobs that pay too little to provide a minimally decent standard of living. This reality has finally broken through politically in the movement for a $15 federal minimum wage. However, some prominent economists contend that a minimum wage high enough to provide a decent standard of living poses too high a risk of job loss. But this fear is purely speculative; we have no reliable evidence that a $15 wage floor, phased in over four to six years, would cause declining employment opportunities for low-wage workers. Indeed, the wage threshold at which substantial employment effects are likely to occur may be considerably higher. What we do know is that a $15 wage would have big impacts on the living standards of millions of...

What’s the Right Minimum Wage?

Our goal should be a living wage, not zero job loss.

AP Photo/Craig Ruttle, File
Just a few years ago, small groups of fast-food workers went into the street to demand a $15 wage. With some important help from their friends—most notably from progressive trade unions like the Service Employees International Union (SEIU) and advocacy groups like the National Employment Law Project—the movement not only stayed alive, but has been transformative. Who could have imagined that one of the biggest news stories this week would be New York Governor Andrew Cuomo and California Governor Jerry Brown’s competition over which would be the first to enact a statewide $15 statutory wage floor? This should have come as no surprise. At $7.25, the federal minimum wage has fallen to just 37 percent of the median wage (down from 55 percent in 1968), which was no higher in 2014 than it was in 1999. Working full-time at the minimum wage just keeps a worker and one dependent child at the poverty line ($16,000). The Economic Policy Institute’s basic-needs budget for...

Vive Les Jeunes

In early April, after weeks of massive student demonstrations, the French government backed down and withdrew its proposed changes in national labor law. Under French law, workers are protected from arbitrary firings by a system that requires employers to justify dismissals. The government, most notably Prime Minister Dominque de Villepin, wanted to allow employers the freedom to fire workers under age 26 without reason and with little or no notice or severance pay. The hope was that employers would respond by hiring more young workers. When the government backed down, a U.S. media consensus emerged that French youth are stupendously misguided -- they don't understand their own interests; they have an outdated, childlike dependence on the state for protection against the real world of market forces; many are simply lazy and prefer the dole to work. But in truth, the real unemployment rates of U.S. and French youth are roughly comparable. And, though it got no attention in the American...

The Skills Myth

Almost everyone seems to believe that workers are losing income because they lack the proper skills. But there's a better explanation: they've lost bargaining power.

After almost three decades of rising incomes, average real earnings have fallen relentlessly since 1973 . In 1982 dollars, the weekly wage for full-time workers was $327 in 1973, $303 in 1979, $277 in 1982, and just $265 in 1990. During the same period, the income distribution became steadily more unequal. The most dramatic earnings collapse was for poorly educated men, a pattern that accelerated in the 1980s. The single most widely accepted explanation for the earnings crisis is "skill mismatch." According to this view, there has been a fundamental shift in industry's demand for skills, leading to a collapse in opportunities and wages for low-skill workers. This shift in the demand for skills is widely attributed to techno logical changes. The beauty of this account is its apparent consistency with both the textbook labor market, in which relative wages reflect relative skills, and a wealth of anecdotal evidence on the skill-upgrading effects of computer-based technologies. The...

Skills and the Wage Collapse

Despite the record economic expansion and near full employment, wages for the bottom fifth of the work force are still far below their 1979 levels. Well over one-fifth of the male work force earns poverty-level wages (22.5 percent in 1997), almost twice as high as in the early 1970s (12.8 percent in 1973). This wage collapse is a big part of the sharply rising inequality experienced by American workers over the past two decades. The conventional explanation rests on the view that wages mainly reflect the interaction between the demand for and supply of skills. The collapse at the bottom, in this view, is simply a consequence of the failure of individuals to provide the skills employers require in an increasingly computerized global economy. The remedy follows directly: We need a more highly skilled work force. This story is very plausible--and substantially wrong. To be sure, more highly skilled workers do earn higher wages, other things being equal. But other very important things...