A STRAIGHTFORWARD ECONOMIC CHOICE:

Recall the 2014 analysis by the nonpartisan Congressional Budget Office of the effects of increasing the federal minimum wage to $10.10 per hour from $7.25, where it has been since 2009. The CBO found that the boost would increase the earnings of millions of workers by a total of $31 billion. It also found that the increase would reduce employment by hundreds of thousands of jobs, and that less than one dollar in every five of that $31 billion would go to households living in poverty.

In short, there are trade-offs. And so when thinking about whether minimum wage increases are good or bad, you have to think clearly about the social goal you are trying to achieve. If your goal is to help reduce income inequality and to increase the earnings of some middle-class households, then the minimum wage is not a crazy policy.

But if your goal is to help the least skilled, least experienced, most vulnerable members of society to get their feet on the first rung of the employment ladder and to start climbing, then the minimum wage is counterproductive. Its costs are concentrated among those vulnerable workers. It is an obstacle in their paths. It is bad policy.

[Devesh Raval, an economist with the Federal Trade Commission,]  argues that the data don't corroborate Piketty's thesis. Automation, he argues, hasn't increased the interchangeability of humans with machines. Instead, what we have watched is the one-time effects of radical post-war globalization.

Radical globalization: Chinese investors can now bid up real estate prices, Raval notes, and American businessmen can easily source their wares from low-wage Vietnam, both changes that have hurt workers. The upside, he argues, is that many of these shifts are one-offs that won't continue to suppress workers' share of income.

Looking ahead: Although Raval says automation isn't causing labor's share of income to decline, he concedes that new technologies could drive down pay. Raval writes, "If Piketty's feared scenario comes to pass," in which machines can increasingly replace labor, and population growth continues to slow, standard economic models say the world "would experience unbounded growth," he said. In other words, the economy could grow while people contribute no new innovations.

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