Subsidizing Low-Wage Employment
REWARDING WORK
Over the past twenty-five years, the relative wages of the lowest paid workers in the United States have dropped more than 25 percent. Over the long run, the productivity and wages of low-wage workers might be improved by heavy investments in education and training, but there is a need for more immediate, direct interventions in the near term. In his Russell Sage-supported book, Rewarding Work (Harvard University Press), Edmund Phelps, of Columbia University, proposed a system of wage subsidies to rebuild economic self-sufficiency and combat social exclusion among less-skilled workers. With Foundation support, Phelps will organize a conference of policy experts to compare the practical effectiveness of alternative wage subsidy plans by simulating their effects on pay, employment, and public spending.