Wage growth is not everything. Low financial risk is another important consideration. The average Joe is some countries is ridiculously exposed, despite the supposed wealth of the nation.
The rich world needs higher real wage growth
71–80 of 265 posts
Re: The rich world needs higher real wage growth
#72Earlier quoted context omitted.
Interesting take, but I'm not sure I buy it. I certainly don't feel like I get ~2.5x more utility from my current iPhone than I did from the smartphone I purchased in 2012, which was just as fast (on the software of the time) and had most of the same functionality. I'd also be curious as to how you were able to conclude that the so-called "fashion effect" is not supported by evidence.
Things have gotten worse in some respects. Computers get more and more locked down with corporate security bullshit, it becomes harder to get any work done. Remember when you could quickly FTP a file, toss up a web page, email someone a zipped file. Can’t do any of that now without jumping through hoops. Computers have become very slow for tasks that used to be fast. Everyone always seems to “waiting on the computer”…
>Remember when you could quickly FTP a file, toss up a web page, email someone a zipped file. Can’t do any of that now without jumping through hoops.
Oh I remember all right. I've spent weeks of my life yelling into a phone "no PASV. You have to find where it says PASV and check it"
Toss up a web page? On what, Geocities? (back to the ftp thing are we?)
Email a file? Great. I hope its less than 2mb or it might just vanish somewhere along the way...
Dropbox. Wordpress. Slack. This stuff is 100x better for the average user than a decade ago. 1000x better than 2 decades ago.
The real trouble is all of this means just about nothing when you're afraid to go to the doctor because your deductible is more than a decent used car.
Re: The rich world needs higher real wage growth
#73Earlier quoted context omitted.
> Are "labour market running hot" or "central bank tightening" references to actual things Yes. Unemployment is very low. That means if you need ten people, you may have to pay more or wait longer than you expected. That is what “labour market running hot” refers to. “Eliminating slack” means encouraging employers to raise wages (which can cause inflation) to fill productive jobs. “Central bank tightening” refers to…
I have (more than a little dusty) degree in economics, and I still don't understand what this article is trying to tell me. Is it telling me that when unemployment is low, central bank policy is to raise interest rates? If so, why not say that? What I meant is that generally I don't see how the sentences in this article add up to .. an article. It's a bunch of metrics, chosen by convention, expressed in cliche. It ki…
> Is it telling me that when unemployment is low, central bank policy is to raise interest rates? If so, why not say that?
Raising rates aren’t the only way to solve the problem of (a) people who could be in the labour market but aren’t and (b) insufficient labour in the places it needs to be.
Whatever it’s trying to do, it got me thinking about barriers to hiring in New York City. Are there steps we could eliminate or consolidate? Last week’s primary just saw my former bartender and taco server effectively become a Congresswoman for Queens. An article about the central bank and unemployment would not have prompted me to consider discussing this with her.
Re: The rich world needs higher real wage growth
#74This 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…
Oil is an example of you can have a volatile commodity despite being very big, traded and needed. This goes out of the understanding of simple reporters and economists who simplify the world to the simple equations they were taught in econ 101.
Re: The rich world needs higher real wage growth
#75Earlier 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.
I think there are different concepts of "cost" and "expensive" at play in this discussion which can lead to this kind of misunderstanding.
Having the population located in dense urban areas is more efficient and therefore cheaper in terms of the real resources that are required: infrastructure is cheaper to build, distances are smaller so that less time is wasted commuting and transport is cheaper (not to mention that highly efficient public transport becomes viable).
So in real resource terms, urban sprawl is more expensive.
But since land is still a limitation and zero-sum, competition can drive up housing costs in attractive dense urban areas to the point where it more than cancels out the efficiency gains of the urban density, and the cost of living in the urban area to the individual becomes higher than the sprawl.
This is why some sort of collective planning is required to make sure that as much as possible of the efficiency gains of urbanization are actually realized. This means having proper infrastructure mostly in terms of public transport.
(Of course, the other part of it is that you need to be careful not to look at just housing costs in the first place. For example, I don't even have to pay for a car, and I benefit from city infrastructure in many other ways.)
Re: The rich world needs higher real wage growth
#76Here are a couple of interesting and crucially related graphs:
- Nonfarm Business Sector: Real Compensation Per Hour [1]
- Nonfarm Business Sector: Real Output Per Hour of All Persons [2]
- Real Median Personal Income [3]
Nonfarm business sector is defined as "a subset of the domestic economy and excludes the economic activities of the following: general government, private households, nonprofit organizations serving individuals, and farms. The nonfarm business sector accounted for about 77 percent of the value of gross domestic product (GDP) in 2000."
I think many of these articles were influenced by an earlier Pew study which showed a sharp disconnect between income and productivity. But their study excluded supervisor positions and only counted wages - not overall compensation. The data I'm presenting here seem to show relatively strong wage growth over time. Interestingly enough median personal income, by contrast, has not grown nearly as rapidly. I present these data as a question more than an answer.
But we do live at a time when developers, engineers, and many other 'normal' white collar jobs are going into 6 figures early in their career. And on the other end I know there are also plenty of people making healthy 6 figure salaries doing things like working on offshore rigs (not to mention getting schedules like 2 weeks on, 2 weeks off). And for general low skill work you have fast food/coffee managers making $40-$50k. It could be that all of these sharp increases in wages are somehow being offset by other jobs having seen substantial decline in wages, or it could be that somehow the market dynamics have changed in ways that certain measurements might not accurately reflect. I'm not really sure, though I'm increasingly leaning towards the latter.
[1] - https://fred.stlouisfed.org/series/COMPRNFB
[2] - https://fred.stlouisfed.org/series/OPHNFB
[3] - https://alfred.stlouisfed.org/series?seid=MEPAINUSA672N
Re: The rich world needs higher real wage growth
#77This 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…
[deleted]
Re: The rich world needs higher real wage growth
#78Earlier quoted context omitted.
The investor class saw inflation marginalizing their endeavors, and they got us to target price stability as the goal instead of full employment. The controls, liquidity of global capital, and action of the central banks that maintain price stability, end up suppressing wage growth. So we have a world in which rather than the debtor’s paradise we had in the 70s, we have a creditor’s paradise now. https://youtu.be/X5J…
I am not sure I follow your reasoning. Taking into account the low interest environment that we have gone through in the last 10 years how can it be a creditor’s paradise?
They don't need super-high interest rates to lock in their returns.
They need investment predictability, and can make up the difference with scale and global arbitrage.
From the other perspective, if your wages don’t rise, and your debts are there and your debts — particularly the student debts — are guaranteed by God himself that you can never default on them — you’re a debt peon.
Re: The rich world needs higher real wage growth
#79Earlier 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…
Google doesn't open a 500-engineer research lab in Grand Rapids, MI because there are not 500 Google-caliber engineers already living in Grand Rapids, MI. This is not a statement about the average talent there, but simply that the starting pool is not sufficiently large; hence the need to build offices in high density urban areas. Google doesn't open an office in Denver so that Bay Area engineers have a slightly chea…
So Google only interviews candidates already living in the cities where the offices are? Google never relocates a candidate from somewhere else?
This is super false. Google doesn’t open an office in Denver because there is already a sufficient talent market in Denver to staff the whole place. There isn’t.
They open an office in Denver so that when a person passes the interviews and will need relocation they can be relocated more cheaply and paid a relatively lower salary in Denver.
They can only get away with this for certain cities that are granted high-status, like Austin, Seattle, Denver. Companies are trying to create similar status facades for e.g. Pittsburgh and Atlanta too.
It absolutely is wage arbitrage for the company— has nothing to do with the preexisting talent base in the given city, except insofar as that talent base confers some type of mitigating high-status effect.
For Denver it’s access to glamorized nature and skiing. For Pittsburgh it’s centralized around the presence of CMU. And even with these effects, these cities are not looked at as all that desirable for many, many candidates.
Re: The rich world needs higher real wage growth
#80Earlier quoted context omitted.
..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…
GDP was still increasing in the late 90s in the US. The recession didn't start until March 2001.
The interesting corollary would be that in the run-up to a recession, all other assets and opportunities are so over-valued that capital has nowhere else to go.
And that increasing wages for labor is in fact capital's least-preferred option.
Which would be sad, but more or less jive with how the modern global, publicly traded economy works.