Bret Devereaux

And also I think some of that 55% is only marginally invested. And also 45% is a lot! It makes it a pretty significant problem when returns to capital dwarf returns to labor.

I'd rather see a radical expansion of the EITC than an increase in the minimum wage (they have the same effect of boosting low incomes), but I think we are past the point that we have to be looking at ways to improve returns to labor.

My big worry with attacking the problem via minimum wage is the disparate impacts in different areas. $15 is a bit different in S. Dakota than it is in New York. EITC expansion would avoid that problem of potentially wrecking businesses in low-cost-of-living areas.

This is the age-old argument against minimum wage increases and I think it would be stronger in this case if $15 were a solid wage in New York and not an unlivable one

It's not the New York end that worries me. The minimum wage in New York could be $100 and I wouldn't care. My concern is that in a lot of low-cost-of-living-places, a lot of service industry businesses that are locally important may have to cut back at $15

Another way of articulating my point might be that the current federal wage is so bad that it makes $15 *in 2025* seem a lot more unreasonable for South Dakota than it actually is. Minimum wage workers are starving there too.

I mean, sure. The perpetual danger with price floors on labor is that you risk closing out low productivity workers from the market, which blocks them from becoming high productivity workers.

In essence, the 'sawing the bottom rungs off of the ladder" problem. That problem is going to be a lot more acute, obviously, in parts of the country where people start lower on the ladder in absolute dollar terms by virtue of the local economy.