Wall Street is now starting to complain that wages are too low.
“Without a real acceleration in wages it is hard to get a meaningful pickup in consumer spending,” explained Michelle Meyer, senior US economist at Bank of America Merrill Lynch.
Weak consumer spending holds back profits and economic growth….
Weak wage gains also are making it hard for the housing market to return to normal, Mr [Jack, Executive Vice President and Chief Investment Officer at BMO Private Bank] Ablin said.
He calculates that new single-family home construction is running at less than 500,000 a month. Demographics say it should be twice that….
“People are waiting longer to get married and they are having fewer kids,” Mr. Ablin said. That is making them delay home purchases. “It is certainly making us a little more cautious on the economy.”
This, though, is an economic argument for why businesses are considering making the move—it’s a question of sound business practice that only businesses can make. It’s not at all an argument that government should intrude and mandate a specific minimum wage—or even (assuming government central planning were equal to the task) that government should try to tailor a mandate to government-perceived unique conditions.