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

Re: The rich world needs higher real wage growth

#211

Post by qaq » Mon, Jul 02, 2018, 3:20 AM UTC

auntienomen wrote: post #209

WalterBright wrote: post #195

Earlier quoted context omitted.

I'd like to see some documentation that rich people hoard cash. Note that money stuffed into a checking account is still invested - the bank loans it out to people who spend it. Even so, I seriously doubt wealthy people have non-trivial amounts of money in checking accounts, because the interest paid on them is nearly non-existent. Wealthy people know how to manage their money, and investing it in 0% checking account…

A fun aside: Banks don't loan out deposits. https://www.investopedia.com/articles/investing/022416/why-b...

they sure do. Current fed rate is 2.0%

Re: The rich world needs higher real wage growth

#212

Post by Camillo » Mon, Jul 02, 2018, 3:21 AM 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…

I have tried to compile a list of the mysterious expressions used in the article:

- "labour markets have tightened"

- "unemployment rate"

- "unemployment was much higher"

- "fall in union membership"

- "rising offshoring"

- "outsourcing"

- "workers’ bargaining power"

- "tightening in labour markets might yet boost workers’ bargaining power" "as was the case during the late 1990s and late 2000s"

- "number of part-time workers who want full-time jobs"

- "unemployment rates that are far higher"

- "pockets of slack might constrain wages everywhere"

- "firms that are struggling to find workers"

- "If slack were eliminated everywhere, pay might rise faster"

- "boost real wages by running labour markets hotter"

Now, I'm no economist, but the picture I'm getting is that they are describing labor relations as a "market", where prices (wages) are affected by demand (companies seeking employees) and supply (workers seeking jobs). So the idea would be that when the supply of potential workers increases (because unemployment is high, or because new sources of labor are available, e.g. by outsourcing and offshoring) that tends to drive wages down, and when the supply decreases it tends to drive wages up.

The fly in the ointment of my interpretation is that there is at least one other obvious source of increased labor supply in rich countries, yet the Economist does not mention it anywhere. So I must be misunderstanding it, after all.

Re: The rich world needs higher real wage growth

#213

Post by qaq » Mon, Jul 02, 2018, 3:32 AM UTC

Synaesthesia wrote: post #205

rdlecler1 wrote: post #170

The rich world needs cheaper housing. Fix that and the average family can allocate more resources to other things like health and education instead of diverting more resources to rent seekers.

Economist Michael Hudson often writes about this. The housing bubble is mostly beneficial to banks, as they get more interest. They know that house prices will go as high as they are willing to lend out.

Right if only there ever was an event when this strategy backfired ...

Re: The rich world needs higher real wage growth

#214

Post by WalterBright » Mon, Jul 02, 2018, 3:37 AM UTC

auntienomen wrote: post #209

WalterBright wrote: post #195

Earlier quoted context omitted.

I'd like to see some documentation that rich people hoard cash. Note that money stuffed into a checking account is still invested - the bank loans it out to people who spend it. Even so, I seriously doubt wealthy people have non-trivial amounts of money in checking accounts, because the interest paid on them is nearly non-existent. Wealthy people know how to manage their money, and investing it in 0% checking account…

A fun aside: Banks don't loan out deposits. https://www.investopedia.com/articles/investing/022416/why-b...

I think that is a misreading of the article. A lack of bank deposits constrain lending, so banks need deposits in order to lend.

Banks keep as little cash as possible, because (again) cash does not earn money. They try to lend out as much as possible. The people who borrow money don't sit on it, either, who wants to pay interest on money sitting in a pile?

The whole cash hoarding theory is nonsense.

Re: The rich world needs higher real wage growth

#215

Post by tfehring » Mon, Jul 02, 2018, 3:55 AM UTC

GatorD42 wrote: post #146

tfehring wrote: post #112

Earlier quoted context omitted.

I'd probably be willing to pay more than 41% (the 16%/year discount taken from your article, compounded for 6 years) but less than 100%, which implies that your conclusion overstates the value (to me in particular) of quality improvements during that time. Of course, I don't actually have the option to get the same experience from an iPhone 5 today that I could have 6 years ago. As an alternative, consider a budget A…

I didn’t word the hypothetical that well. A better way to think about it would be a brand new iPhone 5 that to you looked and felt like an iPhone 5, but magically appeared like an iPhone X to everyone else. The “fashion effect” is the zero sum feeling someone has from having the latest version of a product. The actually dimensions / screen size and screen to body ratio of the iPhone X are actually technical improveme…

Makes sense.

>Used versions of the iPhone 5 seem to be going for under $100 on eBay. Even assuming a discount for new vs used, that would mean you value the iPhone 5 about $200-300 more than a typical eBay buyer.

An iPhone 5 purchased today would run poorly with current software, and the battery life would probably have deteriorated due to age. I took your question to mean that I’d get the same experience that I’d have gotten from purchasing a new iPhone 5 in 2012.

Re: The rich world needs higher real wage growth

#216

Post by mozumder » Mon, Jul 02, 2018, 4:07 AM UTC

stale2002 wrote: post #160

mozumder wrote: post #136

Earlier quoted context omitted.

Doesn't work that way, since jobs are independent of labor pool location. A good example would be tourism, where companies draw people to places with no population. Also, companies that decide to build a factory in the middle of nowhere to take advantage of something else, like cheaper land or electricity. And suddenly you need to build a bridge in Ohio to get to that factory.

If those jobs are "needed" then wages will rise, and the market will solve the problem. If wages don't rise for those jobs, then they weren't needed.

Right, and now you just raised inflation, raising prices for everyone and punishing most the poor and elderly on fixed income, since they rely disproportionately on commodity goods and services.

If you want a successful economy, you have to plan for it: find where resources are going to be utilized, and build from there.

Re: The rich world needs higher real wage growth

#217

Post by mozumder » Mon, Jul 02, 2018, 4:11 AM UTC

closeparen wrote: post #180

djajshgsjja wrote: post #169

Earlier quoted context omitted.

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 l…

Suburbs (and small towns) can implement local bus circulators for last-mile solutions to connect with central stations.

Re: The rich world needs higher real wage growth

#218

Post by danans » Mon, Jul 02, 2018, 4:33 AM UTC

jessaustin wrote: post #116

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.

Is Crowley going to run on a write-in basis? What would that accomplish, other than proving how little [some] Democrats think of the electorate?

No, Crowley has endorsed Ocasio

https://www.washingtonpost.com/politics/2018/live-updates/mi...

Re: The rich world needs higher real wage growth

#219

Post by conanbatt » Mon, Jul 02, 2018, 4:36 AM UTC

JumpCrisscross wrote: post #119

dalbasal wrote: post #107

Earlier quoted context omitted.

I don't think that makes it a science. When Karl Popper criticised economics (and freudianism) for being a pseudo-science, there wasn't a real macro-micro divide. Adam Smith, Ricardo and the like were essentially micro-economists. You can experiment in some very small (raise the price of a product on a shelf) ways. The bulk of economics is about how these small components interact as a large dynamic. When it comes to…

> The bulk of economics is about how these small components interact as a large dynamic If I’m setting pricing and volumes at a firm, I don’t give a rat’s ass about the larger dynamics. I want to know how production variables will impact sales. For this, I can A/B test and rely on a deep corpus of research on queueing theory, supply and demand network and latency models, and logistical models.

You cant replicate an A/B test in economics.

Re: The rich world needs higher real wage growth

#220

Post by toomuchtodo » Mon, Jul 02, 2018, 4:37 AM UTC

mc32 wrote: post #140

JumpCrisscross wrote: post #73

Earlier quoted context omitted.

> 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…

I'm curious to see how far she goes with her esposal of Chavista policies and if she does, what its impact will be on the community.

I’d assume she’d go far, considering her democratic socialist policies are aligned with those of Bernie Sanders, who has the highest approval rating of a US congressional representative.

Based on the wealth and income demographics of her community, democratic socialist policies would be net benefit.