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

Re: The rich world needs higher real wage growth

#241

Post by WalterBright » Mon, Jul 02, 2018, 9:13 PM UTC

JumpCrisscross wrote: post #234

WalterBright wrote: post #226

Earlier quoted context omitted.

That paper makes the fundamental error I am talking about. It assumes that if rich people aren't spending on consumption, they are hoarding cash. It then makes economic sense to redistribute that hoarded cash in order to put the money to use. But the rich aren't hoarding cash. They're investing it. The money is put to use. The rich do not have pallets of cash in the basement. You'd think that professional bankers wou…

> they are hoarding cash I don’t think anyone assumes anyone is hoarding cash. It’s just a time to deployment question. A dollar flowing into a wealthy person’s account may take a week or two to get loaned out or fielded into an investment, and another week or two to pay the investment manager or begin facilitating the purchase of goods and services. A dollar dropped into an empty checking account may buy food that d…

What happens when you buy something with cash? The vendor deposits the money in his bank account.

Same thing.

Re: The rich world needs higher real wage growth

#242

Post by mozumder » Mon, Jul 02, 2018, 9:21 PM UTC

stale2002 wrote: post #231

mozumder wrote: post #216

Earlier quoted context omitted.

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.

You've increased prices for SOME goods, but you've massively massively reduced prices for all others. Urban sprawl is extremely expensive, and the high costs on infrastructure effects the poor the most. If housing and infrastructure were cheaper, because we've built more stuff in cities, then the poor beneift the most due to the lower housing costs (which makes up most of their expenses).

So, do people not understand that all jobs, and demand for people, aren't going to be located in a single point in space?

Why have two cities of New York and San Francisco? Why not just one city of New York?

Increasing commodity prices raises the price of all good, not just some goods, because that's how economics works. Every cost is transferred somewhere else.

So, not sure why you want to raise the price of all goods...

Re: The rich world needs higher real wage growth

#243

Post by closeparen » Mon, Jul 02, 2018, 9:36 PM UTC

mozumder wrote: post #217

closeparen wrote: post #180

Earlier quoted context omitted.

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.

Local bus service can be helpful for the disabled or in extreme weather conditions, but rarely beats a brisk walk. They usually average under 10mph while in motion; then add 10+ minutes of 0mph waiting.

A 40 minute walk and a 40 minute train ride are both reasonable commutes, but added together are nightmarish. I’ve tried.

Re: The rich world needs higher real wage growth

#244

Post by idontpost » Mon, Jul 02, 2018, 9:56 PM UTC

EliRivers wrote: post #81

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…

That's certainly part of it. I worked at a company a few years ago in which, come Christmas, the MD (British company) told everyone that it had been a good year and that he'd rather see the profits go to the workers than the shareholders, so here's a nice bonus (over a month's pay as a bonus). I genuinely believe some would see that as heresy, and some will think that is (or should be) illegal. I'm sure there was a t…

Illegal's an overstatement (ie it's not criminal), but it could certainly have generated a shareholder lawsuit.

Re: The rich world needs higher real wage growth

#245

Post by bigmanwalter » Mon, Jul 02, 2018, 9:59 PM UTC

mlthoughts2018 wrote: post #49

bigmanwalter wrote: post #39

Earlier quoted context omitted.

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…

You most definitely can separate the fashionable, and status-seeking aspects out from urban culture.

I live in Canada. The traditional cuisine is bland, and fresh produce grows only a few months of the year. I see my love of sushi as a product of globalization and urbanization as much as is my ability to get decent fruit from the grocery store in the heart of winter. Sure I could have a root cellar and eat potatoes and beef all winter, but sushi is delicious.

It cannot be just status. High demand and low supply has a tendency to price the best cultural products in high status territory.

Re: The rich world needs higher real wage growth

#246

Post by occamrazor » Mon, Jul 02, 2018, 10:01 PM UTC

Animats wrote: post #100

The emphasis on oil may reflect a European perspective. Only 19% of US oil is imported now, and the US generates very little electricity from oil. The US is a natural gas exporter. If the US wants energy independence, it's within reach. At the other extreme, Japan imports essentially all its oil, as does the UK. Both import most of their natural gas.

The UK (Scotland) produces oil. Is that production irrelevant compared to consumption?

Re: The rich world needs higher real wage growth

#247

Post by WalterBright » Mon, Jul 02, 2018, 10:05 PM UTC

salawat wrote: post #240

WalterBright wrote: post #229

Earlier quoted context omitted.

Even putting your money in a checking account causes it to be spent into the economy (as the bank loans it out). There's no rational reason to borrow money and make a pile out of it. Even people who operate cash businesses (like casinos) rush to deposit the cash in a bank ASAP. > If an investor chooses the strategy that gives themselves the best ROI that doesn't mean the investment is necessarily beneficial for anyon…

Why always hand it over to someone else? You can't say that tons of investment is always a good thing. Look at the Dairy industry in the United States. Wal-Mart has vertically integrated the dairy industry into itself, as a result, many smaller regional farmers no longer have a market at all since there is no way to compete with someone who is so well integrated that they can SELL AT A LOSS in dairy, yet compensate b…

> ALWAYS a positive societal good

I didn't say it was. I was responding to "beneficial for anyone else".

> value deserts

I'm sorry, but this is nonsense.

There are some sound reasons for redistributing money from the wealthy to the poor. Benefiting the economy because the rich are hoarding money or are incompetent investors is not one of them.

Re: The rich world needs higher real wage growth

#248

Post by rdlecler1 » Tue, Jul 03, 2018, 12:08 AM UTC

IkmoIkmo wrote: post #237

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.

How though? I mean, houses themselves haven't really gotten much more expensive. Two things have happened. One, we're all living much larger than before. i.e., our average home sizes have doubled in about 50 years, while the number of people per household dropped. [0] That's a sign of wealth more than anything else. And two, we've all decided to live next to each other. That's a choice. It's a choice coerced by reali…

There are plenty of cheap houses in Reno. I’d love to move there but even though it’s only a half hour flight from Silicon Valley I need to be based here for my job. Maybe the solution to housing is just much better teleconferencing technology.

Re: The rich world needs higher real wage growth

#249

Post by IkmoIkmo » Tue, Jul 03, 2018, 12:10 AM UTC

refurb wrote: post #184

wildmusings wrote: post #97

Earlier quoted context omitted.

The numbers are pretty clear. The top 20%, which roughly correlates to the college-educated professionally-employed class, has seen their real income and social welfare steadily go up for the last half century. The bottom 80% has seen stagnation and decline, as well as increased social ills like drug addiction, broken homes, and so forth. Notably, this pattern exists even if you look at just white people, so a racial…

Declines wages for the poorest are only true if you ignore non-monetary compensation (e.g. benefits) and government transfers (EITC). Not really fair to compare it that way.

Yup. Real median personal income in the US is up. [0] Although there have been few gains in the past decade. It's a pretty decent measure of the average American.

It's also a bit better than wages as a measure of average citizen's purchasing power. After all, wages are linked to having a job. The 20th century saw substantial emancipation and the end of high degrees of exclusion of minorities, particularly women. As they entered the workforce, real wages may have decreased slightly on average, i.e. men were earning slightly less per job, and women were earning significantly more, which is why you can see average wages decline while average personal income increases.

[0] https://fred.stlouisfed.org/series/MEPAINUSA672N

Re: The rich world needs higher real wage growth

#250

Post by IkmoIkmo » Tue, Jul 03, 2018, 12:14 AM UTC

_fol8 wrote: post #84

I think the root cause of most of these problems, is that most people don't add economic value. That isn't to say they are bad people (of course not!), but that we have reached a stage in technology driven capitalism where only a small percentage of people can gain large pieces of the pie (software engineers and CEOs), while middle income jobs are too inefficient to survive (lawyers displaced by discovery software, a…

> People voluntarily stop having (as many or any) children worldwide.

They already did.

https://en.wikipedia.org/wiki/Total_fertility_rate