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The rich world needs higher real wage growth

economist.com

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Re: The rich world needs higher real wage growth

#171

Post by uncoder0 »

jjoonathan wrote: post #168
CPAhem wrote: post #167

Earlier quoted context omitted.

>Yes. Unemployment is very low. Actually it is not that low, especially out of the tech sector. Real unemployment and under-employment are high because of the way unemployment is now measured. The definition of being unemployed has changed since the GFC to manipulate the statistics. Some tricks to manipulate the numbers are: - If you have been unemployed for more than 6 months you are no longer classified as unemploy…

If you're going to accuse someone of manipulating unemployment indices, please specify which index you mean, e.g. U3, U4, U5, or U6. Looking at different indices at different times is obviously going to skew the results, but that's the fault of the person doing the looking, not the BLS, Obama, or the Deep State.

Who said Deep State? Are you using the terms actual usage? i.e. Unelected career bureaucrat? Or, are you using the colloquial definition meaning a conspiring group of unelected career bureaucrats attempting to resist change in the federal government?

Re: The rich world needs higher real wage growth

#172

Post by tormeh »

niccolop wrote: post #120
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…

This is why I stopped reading The Economist years ago. The lack of byline in my opinion allows that type of sloppy writing.

What do you read instead?

Re: The rich world needs higher real wage growth

#173

Post by extralego »

JumpCrisscross wrote: post #121
extralego wrote: post #111

Earlier quoted context omitted.

If only that was all that stood in her way. Let’s not take pastrami tacos for granted.

> Let’s not take pastrami tacos for granted They’re actually a brilliant fusion of American Hispanic and American Jewish traditions. As it happens, her district has prominent populations of each.

Oh right, nice. They sound incredible.

Re: The rich world needs higher real wage growth

#174

Post by bovine3dom »

CPAhem wrote: post #167
JumpCrisscross wrote: post #61

Earlier 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…

>Yes. Unemployment is very low. Actually it is not that low, especially out of the tech sector. Real unemployment and under-employment are high because of the way unemployment is now measured. The definition of being unemployed has changed since the GFC to manipulate the statistics. Some tricks to manipulate the numbers are: - If you have been unemployed for more than 6 months you are no longer classified as unemploy…

The employment rate covers point 1 and 3: it is simply the number of people in work divided by the working age population.

I think you might be confusing cyclical and structural unemployment with your first point. I think it is valid to talk about the two numbers separately as they deal with pretty different problems (labour market liquidity/efficiency versus skills shortages).

The employment rate is at an all time high in many countries.

As for point 2: employment in the black economy is usually not included in official employment figures; people who want to work more hours are classed as underemployed although data on this is not as comprehensive as for the other measures.

I do not think the definition of employment has changed much in the last decade. Do you have a source?

Re: The rich world needs higher real wage growth

#175

Post by jjoonathan »

uncoder0 wrote: post #171
jjoonathan wrote: post #168

Earlier quoted context omitted.

If you're going to accuse someone of manipulating unemployment indices, please specify which index you mean, e.g. U3, U4, U5, or U6. Looking at different indices at different times is obviously going to skew the results, but that's the fault of the person doing the looking, not the BLS, Obama, or the Deep State.

Who said Deep State? Are you using the terms actual usage? i.e. Unelected career bureaucrat? Or, are you using the colloquial definition meaning a conspiring group of unelected career bureaucrats attempting to resist change in the federal government?

I listed "Deep State" as an example of a group that conspiracy theorists often blame for manipulative government activity. I would be thoroughly unsurprised if there were 10 common definitions of the term that were all ill-posed. Fortunately, the precise definition of "Deep State" has nothing whatsoever to do with my argument, so elaboration on the point is completely unnecessary.

Re: The rich world needs higher real wage growth

#176

Post by eli_gottlieb »

AnthonyMouse wrote: post #150
JumpCrisscross wrote: post #61

Earlier 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…

> “Eliminating slack” means encouraging employers to raise wages (which can cause inflation) to fill productive jobs. If you reallocate money without creating new currency, what you get isn't really inflation. Prices may adjust because the demand for things lower income people buy increases and the demand for things higher income people buy decreases, and prices follow demand. But supply and demand isn't inflation. A…

I've heard it said that in policy terms, people tend to always suggest the solutions to the problems they had when they were young. In this case, for a long, long time, well into my adulthood now, we've had policy made by people for whom the Grand Crisis to be solved was the stagflation of the '70s. For my generation, that Grand Crisis is the Great Recession and the rise of the nationalist alt-right.

For the present problems of overly high inequality and falling productivity, indeed, the correct solutions probably run opposite to the "solutions" to the '70s stagflation crisis (wage repression and deflationary monetary policy).

Re: The rich world needs higher real wage growth

#177

Post by derf_ »

dalbasal wrote: post #68
JumpCrisscross wrote: post #61

Earlier 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?

You may dimly recall from your undergraduate Macro courses a relationship between unemployment and inflation called the Phillips Curve [0], which is used to evaluate one of the "dual mandates" the Fed tries to fulfill with its interest rate setting policy.

The problem, of course, is that there is evidence from the Fed's own research that suggests that the Phillips Curve is balderdash [1]. That doesn't stop central banks (including the Fed) from pretending it's still true, though.

[0] https://en.wikipedia.org/wiki/Phillips_curve

[1] https://www.philadelphiafed.org/-/media/research-and-data/pu...

Re: The rich world needs higher real wage growth

#178

Post by eli_gottlieb »

JumpCrisscross wrote: post #73
dalbasal wrote: post #68

Earlier quoted context omitted.

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…

>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?

The part where someone has to compete for ultra-scarce housing in and around NYC.

Re: The rich world needs higher real wage growth

#179

Post by dalbasal »

Joeri wrote: post #85
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…

This article really demonstrates how meaningless most economics reporting is, it's nearly as bad as markets/finance reporting. The problem is not with the reporting, it’s with the field. Economics is pseudoscience. It has all the trappings but none of the explanatory or predictive abilities. So you get articles like these that use a lot of jargon pretending like they’re making a strong case, but there’s no strong con…

>> Economics is pseudoscience

I was cranky at The Economist when I wrote that and I guess from the upvotes other people were too. It's a crappy article, and they shouldn't publish crap... I like the Economist, on balance.

Anyway, interesting that you bring up pseudoscience. I think most good economists, or economists on good days prefer to think of economics as just not science. Some of the founders of modern economics were also the founders of modern anti-scientism. They were the generation that experienced bloody wars between marxism, liberalism, and a highly pseudoscientific nazism. They were all backed by pseudoscientific "theories," with key elements leaning heavily on economics. ..actual wars. Karl Popper is IMO, the iconic guardian of the fine line.

These are the same intellectuals that The Economist's position alway alludes to when they get ideological themselves. open society, liberalism. It's actually not ironic. Even Hayek & Popper were sort of confused cases, having been drawn into all sorts of utopian stuff. I think it was the time. Even libertarians/anarchists became obsessed with boring technical philosophy, and all the schismatic flavours hate one another.

Re: The rich world needs higher real wage growth

#180

Post by closeparen »

djajshgsjja wrote: post #169
ben_w wrote: post #43

Earlier quoted context omitted.

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

I think we can all agree that if the costs of high-speed transit were low enough to support hubs in every city city with spokes going to all nearby suburbs, all sorts of problems would be solved.

Suburbs are unlikely to support everyone walking to the train station unless they were explicitly designed for it. You’d need immense parking lots/garages at the suburban stations (which most transit advocates oppose and are trying to remove), blanket coverage with local bus service (expensive and structurally difficult in a suburb), or to remake the local streets around bicycling. Plopping down a station without a last-few-miles solution doesn’t get you much.
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