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What If a Tight Labor Market Never Returns?

David Callahan

A tight labor market is the great conservative answer to the low-wage jobs crisis. If we can just get the economy booming again, the logic goes, wages will rise along with demand for low-skilled workers. 

Bill O'Reilly told me that earlier today, when I taped a segment at Fox on the economy. 

Of course, many progressive economists will tell you the same thing, even if they have very different ideas about how to spur growth and how to share prosperity. 

History offers plenty of evidence that wages at the bottom really do rise when the economy is burning hot. Low-wage workers saw big gains during the late 1990s, for example. 

But here is a horrifying thought: What if a tight labor market simply never returns? What if new technologies -- like those automatic check-out machines popping up in stories -- permanently decrease the demand for low-wage workers, even during boom periods?

That's a question that nobody tends to dwell on, even within the progressive policy world. But judging by evidence we all see every day -- from ATMs to EZ Pass to self-check out to "Julie" at Amtrak's automated customer service line -- it needs to be on the agenda in a big way.