Elizabeth Warren recently posited that the little guy is getting gypped because his wages have not kept up with his productivity.
“If we started in 1960, and we said [that] as productivity goes up … then the minimum wage was going to go up the same … if that were the case, the minimum wage today would be about $22 an hour,” the senator said, at a recent Education, Labor and Pensions Committee hearing on “Keeping up with a Changing Economy: Indexing the Minimum Wage.”
I pointed out that the productivity comes to people in the form of lower prices: it’s easier to make a tablet now than it is to make a huge computer with a tiny fraction of the processing power in 1960, so tablets are cheaper. Warren’s alternative would saddle us with $2 million iPads.
Legal Insurrection has two other economic responses, namely, that low-skilled productivity does not increase the same way that productivity in high-skilled labour has, and that the makers of the new productivity-enhancing technology, not the users of it, are the ones who (justly) got wealthy off this. It would be rather strange to give the operator of a fancy new cash register the benefit of the use of that register, rather than giving that to the inventors of and investors in such technology.