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No Wonder the Jobs Gap Is Getting Wider | The Wall Street Journal

18 November 2013—Dr. Kevin E. Cahill, research economist at Boston College’s Center on Aging and Work writes a letter to the editor on Wall Street Journal.

as a result of fiscal policy, employers are hesitant to hire workers generally, and low-wage workers in particular.

In explaining the apparent bifurcated labor market in which low-wage individuals have struggled in recent years while middle- and high-wage workers have performed better, your story states that "economists aren't sure what is behind the trend, or how long it will continue" ("Job Gap Widens in Uneven Recovery," Nov. 12, page one).

While economists might not be sure about what is happening, fiscal policy is the most likely culprit. The plethora of uncertainties regarding health-insurance benefits, including penalties for hiring full-time workers and other regulations, have created an economic environment in which employers don't know what wage they will be paying to hire a worker. The result is that employers are hesitant to hire workers generally and low-wage workers in particular.

Kevin E. Cahill, Ph.D.

Research Economist
Sloan Center on Aging & Work at Boston College
Chestnut Hill, Mass.