The rich world needs higher real wage growth • Hacker News Board

Re: The rich world needs higher real wage growth

#41

Post by ben_w » Sun, Jul 01, 2018, 4:15 PM UTC

mozumder wrote: post #6

Or 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…

> Start with food, get a meal down to less than a dollar.

I know food prices vary a lot from place to place, but in the UK right now (at current exchange rates) you could eat for a bit over $1 per day, never mind per meal. I’ll grant you that’s student meals, a balanced mixture of rice lentils and vegetables, but it’s all your protein, vitamin and caloric needs.

Re: The rich world needs higher real wage growth

#42

Post by JumpCrisscross » Sun, Jul 01, 2018, 4:16 PM UTC

rootusrootus wrote: post #20

closeparen wrote: post #12

Earlier quoted context omitted.

Everyone in dense areas is the only sustainable settlement pattern. The energy alone needed to maintain existing levels of sprawl cannot go on much longer.

I hear this a lot. But the fact remains that it is significantly more expensive to live in a dense urban area. Until the claimed efficiency improvement can be translated to an actual day-to-day cost improvement, people will continue to live where their dollars go farther.

> Until the claimed efficiency improvement can be translated to an actual day-to-day cost improvement

I don’t own a car, offload a bunch of concerns into City infrastructure, walk to a corner grocery store, and go from idea to meetings inside a single day, thereby letting me dance circles around competitors who have to schedule a call or flight out.

Cities don’t make sense for everyone. But they do for a lot of people. They make so much sense for enough people, that those people will pay a premium to have everything else nearby.

Re: The rich world needs higher real wage growth

#43

Post by ben_w » Sun, Jul 01, 2018, 4:17 PM UTC

mozumder wrote: post #29

closeparen wrote: post #12

Earlier quoted context omitted.

Everyone in dense areas is the only sustainable settlement pattern. The energy alone needed to maintain existing levels of sprawl cannot go on much longer.

Mass transit eliminates the energy problem. Two far away cities connected to each other via high-speed rail might as well be next-door-neighbors.

Sure, between two cities. Not so useful for rural-to-city commuting.

Re: The rich world needs higher real wage growth

#44

Post by phkahler » Sun, Jul 01, 2018, 4:20 PM UTC

GatorD42 wrote: post #2

I 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...

My phone has the capability of a billion dollars worth of super computers back in the 1980s. Its not sensible to assign any economic value to that. I'm not richer because I have better technology today than before. Trasistors have just suffered massive commoditization and their prices reflect that.

Re: The rich world needs higher real wage growth

#45

Post by ben_w » Sun, Jul 01, 2018, 4:22 PM UTC

mozumder wrote: post #36

rorykoehler wrote: post #30

Earlier quoted context omitted.

>This is unsustainable On what basis do you make this claim? I would have thought the opposite to be true.

Because people need to be located where they are most efficiently utilized in the economy. Everyone wants to live in New York or San Francisco, but the jobs are going to be distributed around the country. How are people going to construct a bridge in Ohio if everyone is in New York City? Jobs are still a local thing.

If everyone lived in New York or San Francisco, there wouldn’t be any need to construct a bridge in Ohio in exactly the same way there’s no need to build one over the Onyx River in Antarctica.

Re: The rich world needs higher real wage growth

#46

Post by dominotw » Sun, Jul 01, 2018, 4:23 PM UTC

phkahler wrote: post #44

GatorD42 wrote: post #2

I 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...

My phone has the capability of a billion dollars worth of super computers back in the 1980s. Its not sensible to assign any economic value to that. I'm not richer because I have better technology today than before. Trasistors have just suffered massive commoditization and their prices reflect that.

> I'm not richer because I have better technology today than before.

Why not though?

Re: The rich world needs higher real wage growth

#47

Post by i_am_nomad » Sun, Jul 01, 2018, 4:24 PM UTC

ben_w wrote: post #41

mozumder wrote: post #6

Or 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…

> Start with food, get a meal down to less than a dollar. I know food prices vary a lot from place to place, but in the UK right now (at current exchange rates) you could eat for a bit over $1 per day, never mind per meal. I’ll grant you that’s student meals, a balanced mixture of rice lentils and vegetables, but it’s all your protein, vitamin and caloric needs.

Seconding this. I was amazed at how inexpensive good, fresh food was in the UK when I visited recently.

Re: The rich world needs higher real wage growth

#48

Post by tfehring » Sun, Jul 01, 2018, 4:24 PM UTC

temp-dude-87844 wrote: post #37

tfehring wrote: post #33

Earlier quoted context omitted.

It's probably cheaper and certainly more environmentally friendly to keep building upward in urban centers than to build mass transit to exurban areas. Urban areas already provide significant subsidies to exurban ones via taxes and cross-subsidies - see, e.g., [0] and [1]. The comparatively high cost of living in high-density areas is driven by a combination of those transfers and pricing distortions created by local…

It's certainly not cheaper, for developers, to build highrise aparments in the city than upscale tract homes on tiny lots in an exurb. And environmental impacts and the responsibility for transportation are both externalities easily pushed to someone else. This is what actually happens.

>It's certainly not cheaper, for developers, to build highrise aparments in the city than upscale tract homes on tiny lots in an exurb.

Why's that? At the margin, at least, it seems unlikely that this is the case - it's probably quite a bit cheaper to add an additional floor to a 50 unit/floor high-rise (when it's being constructed, not after the fact) than to build 50 detached single-family homes in an exurb, for example.

It's true that externalities can be, well, externalized, but that doesn't mean the difference in absolute costs shouldn't be considered. At the end of the day, someone still has to foot the bill.

Re: The rich world needs higher real wage growth

#49

Post by mlthoughts2018 » Sun, Jul 01, 2018, 4:29 PM UTC

bigmanwalter wrote: post #39

mlthoughts2018 wrote: post #28

Earlier quoted context omitted.

But why does everyone want to move to dense urban areas? You assume that there’s some small, easy-to-offset group of factors, like public transit or “jobs programs,” and that if the government just did something with these things, it would equilibrate population dynamics appropriately. I’m not convinced. I think people are more driven by status symbols and glamor. Living in a city is considered relatively more “high…

We are social beings. We live in a society. Being close to others is not a status symbol, it is what makes us, us. I eat at nice restaurants because the food is delicious. I enjoy the culture. I enjoy a wide variety live music. These are not status symbols, these are the essence of a joie de vivre. I enjoy walking to my local shops and boutiques, not for the status but because it is genuinely enjoyable of its own mer…

Your reply sounds like an absolutely classic reply of someone driven very much by social status signalling. Especially the whole “I don’t buy into status-seeking; I just like ‘quality’ experiences” thing — which just begs the question, where does your notion of quality come from?

“I enjoy walking to my local shops...” is the same as saying you like being high-status and commanding the existence of a local bazaar that caters to the tastes that you and other city-dwellers have glamorized.

> “These are not status symbols, these are the essence of a joie de vivre.”

I can scarcely think of a stronger appeal to status-seeking than this.

(I don’t say any of this to be critical of you. I live in a large city and am fully aware that part of why I enjoy it and identify with it is all based on deep-seated, culturally-ingrained, and even subconcious emphasis on status-seeking. I just mean that it’s so deeply woven into our lives that we don’t realize and often think we’re somehow “better” than that, which is just more virtue signalling.)

Re: The rich world needs higher real wage growth

#50

Post by knuththetruth » Sun, Jul 01, 2018, 4:29 PM UTC

pknopf wrote: post #9

What 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?

The destruction of unions and other forms of organized labor.

Without any strong, organized resistance to Capital owners, they were free to redirect more and more of the profits from productivity gains to themselves. The resulting disparity created a kind of feedback loop that further entrenched the power of Capital owners, as some of the excess wealth they now possessed could be put to use subverting the American political system to serve their interests.