Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The rich world needs higher real wage growth

economist.com

Post reply on HN
Print view View original

101–110 of 265 posts

Re: The rich world needs higher real wage growth

#101

Post by dalbasal »

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.

In some senses, "The US" is not really involved in oil production. It is a more privatised industry in the US than most (oil producing) places. If oil prices go up in the Persian Gulf, petrol prices go up in Texas regardless of import/export balances.

In theory, the surplus profit is enjoyed by Texan oil producers, as opposed to Gulfy producers. This is increasingly dubious as the economy globalises. Gulfies own an interest in Texan oil wells. Texans own an interest in Gulf oil wells.

The Texan putting petrol in his ute... I'm not sure it matters to him that the US is a net exporter. Petrol costs him more. Oil derived products cost him more. His income does not increase.

This is not true in the reverse. In most oil producing nations, people do not pay the export price for oil. The local market price is usually lower.

Re: The rich world needs higher real wage growth

#102

Post by neilwilson »

JumpCrisscross wrote: post #98
Joeri wrote: post #85

Earlier quoted context omitted.

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 can’t be a science yet Macroeconomics, yes. Microeconomics is a proper science. It has theories which make predictions which can be demonstrated in experiments.

Probably worth reading Debunking Economics before being sold on all microeconomic ideas. Particularly anything to do with the theory of the firm.

Re: The rich world needs higher real wage growth

#103

Post by _ptgt »

dalbasal wrote: post #60
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…

Ehhh, I think you're fudging the causality here and reading your own incorrect perspective into the article.

Recessions hit the lowest rungs of the economic ladder hardest, and those same rungs are last to fully get in on the recovery. Hence, labor's share of GDP tends to be highest at the end of the business cycle... which necessarily coincides with an imminent recession.

Re: The rich world needs higher real wage growth

#104

Post by dalbasal »

baursak wrote: post #96
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…

Relevant: https://www.theatlantic.com/technology/archive/1991/10/-quot... "The magazine is written by young people pretending to be old people... If American readers got a look at the pimply complexions of their economic gurus, they would cancel their subscriptions in droves."

heh.

He doesn't like the economist at all.

I don't agree in general, the economist is often good. This article (and economics generally)... I have to agree. Heavy on Oxbridge feel, light on actual ideas.

Most of what these kind of articles convey is a feel, justified by technical sounding babble that a friendly reader will assume is adequate.

Ironically, the iconic example of this kind of carry on is marxism. 93.6% of all communist/marxist writing was a sharp tongued criticism. Moral critiques of capitalism. Critical reporting on the state of the urban working class in Europe. But, Marx (and his Bougie Oxbridge readers) needed more than that though. They needed to refute "Bourgeoisie Economists" and "Liberal Political Scientists." That's why Das Capital was so important. No one read it, but owning a copy added intellectual weight to one's marxism.

Re: The rich world needs higher real wage growth

#105

Post by JumpCrisscross »

neilwilson wrote: post #102
JumpCrisscross wrote: post #98

Earlier quoted context omitted.

> Economics can’t be a science yet Macroeconomics, yes. Microeconomics is a proper science. It has theories which make predictions which can be demonstrated in experiments.

Probably worth reading Debunking Economics before being sold on all microeconomic ideas. Particularly anything to do with the theory of the firm.

> Particularly anything to do with the theory of the firm

Theory of the firm is closer to a hypothesis. I’m not sure how one would experimentally verity its claims.

Re: The rich world needs higher real wage growth

#106

Post by criddell »

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...

I think we're past peak phone. I don't care about improvements in my phone anymore, I just want security patches. The fact that the phone is getting better is uninteresting to me. You might as well tell my new lawnmowers are better.

Re: The rich world needs higher real wage growth

#107

Post by dalbasal »

JumpCrisscross wrote: post #98
Joeri wrote: post #85

Earlier quoted context omitted.

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 can’t be a science yet Macroeconomics, yes. Microeconomics is a proper science. It has theories which make predictions which can be demonstrated in experiments.

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 predictions like "increasing minimum wage will lead to increased unemployment," it's never been adequately demonstrated experimentally.

Re: The rich world needs higher real wage growth

#108

Post by egypturnash »

tfehring wrote: post #14
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...

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.

Honestly I’m not sure I really get 2.5 more utility from my current phone than from the Handspring Visor I carried around in the early Naughties. Not having to slide on an external box with its own pack of four AA batteries to have GPS is nice I guess.

Re: The rich world needs higher real wage growth

#110

Post by jaggederest »

TangoTrotFox wrote: post #76

Here 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…

These are more interesting graphs.

https://fred.stlouisfed.org/graph/fredgraph.png?g=ki8y

https://fred.stlouisfed.org/graph/fredgraph.png?g=ki8A

https://fred.stlouisfed.org/graph/fredgraph.png?g=kipg

Healthcare, education, and housing have all doubled since the turn of the century compared to median incomes. There are a few sectors of the economy that are absolutely crushing people who make a median wage.

Post reply on HN