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

Re: The rich world needs higher real wage growth

#51

Post by Nokinside » Sun, Jul 01, 2018, 4:31 PM UTC

adpirz wrote: post #26

Linked elsewhere in the comments, but this is an interesting read regarding the increasing gap between productivity and labor: https://www.epi.org/publication/understanding-the-historic-d... . The interesting fact is that the loss of labor's share of GDP to capital is less than you'd imagine, and a much bigger reason for stagnant real wage growth has to do with inequality regarding compensation. Automation is real an…

When you are really rich, consumption becomes tedious.

If someone has $100M income after taxes, they might invest $50M reducing the ROI of the capital in economy during the economic boom when there is enough capital and cheap credit already.

What to do with the remaining $50 million? It's hard to eat, travel or use services to spend $50 million per year. It's possible, but it takes some real effort. Helicopter ride every day barely registers.

You can always buy a bigger house. $50 gets you a nice one. If you put $150 million you get even better. Property prices increase.

Re: The rich world needs higher real wage growth

#52

Post by gedy » Sun, Jul 01, 2018, 4:32 PM UTC

dominotw wrote: post #46

phkahler wrote: post #44

Earlier quoted context omitted.

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?

Probably because it does not translate into food, health, and shelter security for the vast majority of people.

Re: The rich world needs higher real wage growth

#53

Post by door3 » Sun, Jul 01, 2018, 4:33 PM UTC

adpirz wrote: post #26

Linked elsewhere in the comments, but this is an interesting read regarding the increasing gap between productivity and labor: https://www.epi.org/publication/understanding-the-historic-d... . The interesting fact is that the loss of labor's share of GDP to capital is less than you'd imagine, and a much bigger reason for stagnant real wage growth has to do with inequality regarding compensation. Automation is real an…

Sounds like this should bring up discussion around a maximum wage/relative earnings limit.

Re: The rich world needs higher real wage growth

#54

Post by saas_co_de » Sun, Jul 01, 2018, 4:34 PM UTC

closeparen wrote: post #12

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…

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.

This is so wildly off base it is not even funny. The most sustainable forms of life is decentralized subsistence hunting and gathering or small scale farming. When civilization collapses, which it does and will, that is the only form of human life that survives. Cities rise up through political power and exploitation of the rural areas around them but they are a graveyard. Just a matter of time.

Re: The rich world needs higher real wage growth

#55

Post by [deleted] » Sun, Jul 01, 2018, 4:34 PM UTC

dominotw wrote: post #46

phkahler wrote: post #44

Earlier quoted context omitted.

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?

[deleted]

Re: The rich world needs higher real wage growth

#56

Post by dalbasal » Sun, Jul 01, 2018, 4:36 PM UTC

This article really demonstrates how meaningless most economics reporting is, it's nearly as bad as markets/finance reporting.

Oil is $75, about average over the last decade. It has almost nothing to do with employment, wage growth or GDP except inasmuch as all major economic measures affect eachother. A year ago oil prices were low, did that mean the opposite of this article (whatever that is) was true?

This kind of writing leans very heavily on its metrics, euphemisms and cliches. I have a feeling the journalists would not be able to unpack any of its abstractions.

"If slack were eliminated everywhere, pay might rise faster." _.._"hawks think there is little room to boost real wages by running labour markets hotter." _.._"structural changes in the economy, rather than weak demand alone, have stacked the deck against workers."

...If asked, would the writer be able to give a specific examples or instances for any of these? Are "labour market running hot" or "central bank tightening" references to actual things that are happening or are these just boilerplate sentences that get added to any article?

I really don't see how anyone is more informed of anything, even about the authors' opinions, from reading this.

Re: The rich world needs higher real wage growth

#57

Post by vivafrance » Sun, Jul 01, 2018, 4:38 PM UTC

freddie_mercury wrote: post #21

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?

> Was Nixon's complete split from the gold standard a factor at all? No, it wasn't.

Yes, it was.

Re: The rich world needs higher real wage growth

#58

Post by walshemj » Sun, Jul 01, 2018, 4:38 PM UTC

mozumder wrote: post #16

xapata wrote: post #7

Earlier quoted context omitted.

Deflation causes problems. Better to inflate wages in correspondance with prices.

It only really causes a problem if you don't prepare your economy for it. Prices should really only drop for commodity products and basics, so that one can live for $100/month. You should still offer incentives for people to spend more, such as offering higher end real-estate and products, or just bringing in more people into your economy.

I causes people to delay spending and horde rare goods (gold etc) it also has massive problems if say 90% of your populations mortgages are underwater see Japan

Re: The rich world needs higher real wage growth

#59

Post by GatorD42 » Sun, Jul 01, 2018, 4:38 PM UTC

nabla9 wrote: post #10

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...

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. http://www.thebillionpricesproject.com

My argument isn't that the CPI is misleading mismeasuring prices, but falling to amount for quality improvements in products. I'm not sure the MIT data disproves that claim.

Re: The rich world needs higher real wage growth

#60

Post by dalbasal » Sun, Jul 01, 2018, 4:39 PM UTC

dalbasal wrote: post #56

This article really demonstrates how meaningless most economics reporting is, it's nearly as bad as markets/finance reporting. Oil is $75, about average over the last decade. It has almost nothing to do with employment, wage growth or GDP except inasmuch as all major economic measures affect eachother. A year ago oil prices were low, did that mean the opposite of this article (whatever that is) was true? This kind of…

..extra point. This is the most ridiculous part:

Continued tightening in labour markets might yet boost workers’ bargaining power enough for that to happen, as was the case during the late 1990s and late 2000s, two unusual periods in which labour’s share of GDP rose across the rich world.

Labour’s share of GDP is a fraction. labour/gdp. you can make it bigger by having higher wages or lower gdp. Anyone remember 1999 or 2008? Anything "unusual" about those years?