Now, you could argue that low-wage workers have to be more skilled than in the past to meet their

job requirements. But theres no evidence to support that to the contrary, theres some evidence that computerization has led to lower numeracy requirements for certain low-wage workers, like cashiers. And besides, if theyre more skilled, they should be adding more value, and thus making more money, not less. Thus we can conclude that at least part of the problem with the low-wage labor market is the quality of the jobs, at least from the perspective of compensation, not the quality of the workers. Sure, soft skills showing up on time, dealing maturely with peers are as important as ever, but people with shortcomings in those areas show up in all sectors. Typical low-wage workers dont lack the skills to do their jobs. They lack the bargaining power to be paid decently for the work. Relative to most others in the job market, theyre least able to press for a share of the profits theyre helping to generate. In earlier periods, many lower-paid workers did better on this front. There were more unions not always in their sector, but setting wage norms that were followed throughout the economy. There were tighter labor markets, which gave them clout they lack in slack markets. And there was a higher minimum wage its real value in todays dollars was $9.30 in 1968 compared with $7.25 today. (Legislation in Congress would raise the minimum to a nominal $10.10 by 2016.) When you think of it this way, a lot of the cramped economic debate opens up. Since workers are not really paid their precise marginal product, you wouldnt expect them to be laid off because of a moderate, mandated wage increase. In periods of high profitability, youd expect some of the wage increase to be paid for out of profits. In a real-world context, youd want a policy taking direct aim at deteriorated job quality and thus helping to offset the acute lack of bargaining clout among low-wage workers. Does that mean completely ignoring the laws of supply and demand and setting the minimum at any level we want? Of course not. Workers may not be paid their marginal product, but there is some rough correlation between their pay and the value of their work (the great labor economist Richard Freeman gets at this by using the flat edge of the chalk to draw demand curves). History teaches that moderate wage increases say, those including not much more than 10 percent of the work force in their sweep have nothing like the job-loss effects that opponents claim (which isnt to say zero, but the beneficiaries far outnumber those hurt by the policy).