Link Between Low Wages and Low Productivity Growth: High Wages Make Low Productivity Jobs Disappear

Neil Irwin examined recent patterns in wage growth in a NYT Upshot piece. Irwin noted the extraordinarily low 0.6 percent pace of productivity growth in recent years (where are the robots?) and argued that wage growth has actually been relatively fast. He then examines why productivity growth might be so slow.

One explanation he left out is that low wages makes it possible to hire workers at low productivity jobs. If an employer only has to pay a worker the $7.25 federal minimum wage, then it...