BLODGET VS. BARRO: Do Companies Owe Their Workers A Raise?

My boss Henry Blodget and I have been debating whether companies have a moral responsibility to pay workers more, since wages are stagnating and corporate profits are at an all time high.

This morning, we took that debate to Yahoo! Finance's "The Daily Ticker."

Henry says paying higher wages would be an investment in the economy, causing profits to grow even more in the long run. It would also just be a "decent" thing to do.

I say wages are driven by market conditions. When unemployment is high and businesses see few reasons to invest and grow, wages will stagnate. The moral responsibility for fixing that situation lies with all of us, not just with shareholders—and the people we should be shaming over wage stagnation are policymakers.

Watch the video: