The rich world needs higher real wage growth
economist.com
The rich world needs higher real wage growth
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Re: The rich world needs higher real wage growth
#2I think there are many reasons to be skeptical of inflation and productivity statistics because they don’t seem to capture the rate of innovation in consumer goods such as smartphones and related areas like wireless plans. I wrote a piece on inflation statistics showing how U.S. inflation statistics fail to account for the quality improvement in iPhones: https://medium.com/@vince.pavlish/using-iphone-prices-to-che...
Re: The rich world needs higher real wage growth
#3I think there are many reasons to be skeptical of inflation and productivity statistics because they don’t seem to capture the rate of innovation in consumer goods such as smartphones and related areas like wireless plans. I wrote a piece on inflation statistics showing how U.S. inflation statistics fail to account for the quality improvement in iPhones: https://medium.com/@vince.pavlish/using-iphone-prices-to-che...
While that might be true, it seems like incorrectly accounting for quality improvements in a subset of goods is a rather small nitpick in comparison to things like poor accounting for rapid changes in housing, healthcare, education, and child care costs in many locations. PCE is a better measure of inflation than CPI in my opinion, and even that is lacking.
Re: The rich world needs higher real wage growth
#4The rent is too damn high.
Re: The rich world needs higher real wage growth
#5[deleted]
Re: The rich world needs higher real wage growth
#6Or better yet, reduce prices all around. Think of all your expenses and look at ways to systematically reduce them for everyone. Start with food, get a meal down to less than a dollar.
Rent is high because everyone wants to move to certain dense areas, while moving away from more spacious/rural areas. This is unsustainable. Offer incentives for people to move elsewhere, including jobs programs and subsidizing mass transit to less dense/rural areas. Offer mass transit everywhere to reduce transport costs.
Re: The rich world needs higher real wage growth
#7Or better yet, reduce prices all around. Think of all your expenses and look at ways to systematically reduce them for everyone. Start with food, get a meal down to less than a dollar. Rent is high because everyone wants to move to certain dense areas, while moving away from more spacious/rural areas. This is unsustainable. Offer incentives for people to move elsewhere, including jobs programs and subsidizing mass tr…
Deflation causes problems. Better to inflate wages in correspondance with prices.
Re: The rich world needs higher real wage growth
#8I think there are many reasons to be skeptical of inflation and productivity statistics because they don’t seem to capture the rate of innovation in consumer goods such as smartphones and related areas like wireless plans. I wrote a piece on inflation statistics showing how U.S. inflation statistics fail to account for the quality improvement in iPhones: https://medium.com/@vince.pavlish/using-iphone-prices-to-che...
This issue is one of the subtexts in Gordon’s “The Rise and Fall of American Growth”.
Re: The rich world needs higher real wage growth
#9What exactly (as if anyone can know) caused the wage growth and productivity to split in the 1970s?
Was Nixon's complete split from the gold standard a factor at all?
Re: The rich world needs higher real wage growth
#10I think there are many reasons to be skeptical of inflation and productivity statistics because they don’t seem to capture the rate of innovation in consumer goods such as smartphones and related areas like wireless plans. I wrote a piece on inflation statistics showing how U.S. inflation statistics fail to account for the quality improvement in iPhones: https://medium.com/@vince.pavlish/using-iphone-prices-to-che...
There are independent measures besides official CPI numbers. For example MIT's Billion Prices Project. These alternatives measures show that CPI is doing pretty good job.