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"By all rights, Millennials—people born between 1981 and 1997—should be the highest-paid generation in American history. They are, after all, the most likely to

"By all rights, Millennials—people born between 1981 and 1997—should be the highest-paid generation in American history. They are, after all, the most likely to hold a college degree and are working in a period of unsurpassed productivity" This syllogism is not only unfounded, but basic economics suggests the opposite is true.

CPLX 11y ago
I have a degree in Economics, and I don't understand what you're trying to say. There should be a positive correlation between productivity and compensation. How does "basic economics" suggest the opposite?
- maze-le 11y ago
  I think what he means is: More people hava a college degree. That means more people are in competition to get "white collar" jobs. More competition on the "white collar"-job market, creates incentives to lower the cost per person (There is a bigger share of people willing to be paid less than a generation before). Therefore the average salary per person drops.
  - guscost 11y ago
    Also, "more productive" means fewer people are needed to do the same amount of work, so labor prices are being pushed down from the demand side too (as long as the total work being done doesn't keep pace, i.e. low growth).
- lr4444lr 11y ago
  I do _not_ have a degree in economics, and am content to admit I only understand basic principles. My implicit point is that the credential does not "make one productive"; it qualifies one to perform in jobs that _carry_ higher productivity in the market. Without a commensurate increase in those jobs to match the higher proportion of the population obtaining the credential, the supply and demand equilibrium point moves. By all means, if there is data or more sophisticated principles at work, please correct me.
  - CPLX 11y ago
    Productivity is a word that has a meaning. It is a measure of the amount of economic output that can be produced with a given amount of labor, measured in time. So for example if a worker can produce 20 lunches instead of 15 lunches of equal quality an hour, his productivity is higher. I think you lost the plot by assuming the original article was implying that because of college degrees productivity must be higher. That's not what it said, it was saying that more workers have college degrees and also productivity is at record high levels. The effect of the former could be arguable, but the result of the latter should be higher wages. It's a genuine concern to try to figure out what's going on if that's not what's happening.
    - lr4444lr 11y ago
      Okay, but I don't see the author's measure of productivity either. He seems to take your definition, as applied over the _entire economy_, and suggests that when applied to the individual wage level (presumably dividing by population) there is a conundrum. My suggestion is that there is a simple (if incomplete) explanation for this. An extreme example can illustrate my point well: if you took the entirety of Silicon Valley's tech workers and air-dropped them with no provisions into an aboriginal tribe in the Amazon rainforest (and they automatically knew the native language), who would be more productive in the local economy? Can you please clarify for the sake of readers (and me) how it is significantly different in the real world if the market of value-commanding labor changes under people's feet instead of transplanting them to a completely foreign environment?
      - CPLX 11y ago
        The authors definition and "my" definition and everyone's definition are the same because it's a commonly understood economics term. He's not talking about air-dropping people into the Amazon he's talking about workers productivity here in this economy and their wages in this economy, thus comparing apples to apples. And he's talking about the wages of an entire generation, not applying it down to some individual level. This shouldn't be confusing, these concepts are commonly understood by many, and are called macroeconomics. The only thing at issue here is your mischaracterization of this as somehow being opposed to "basic economics," with which further inquiry has revealed you clearly are unfamiliar.
malchow 11y ago
Great example of first-order thinking that animates so much seemingly progressive policy. College graduates earn more == produce hordes more college graduates!
CaptSpify 11y ago
How is the opposite true? I have no economic background, and am genuinely curious.

CPLX 11y ago

I have a degree in Economics, and I don't understand what you're trying to say. There should be a positive correlation between productivity and compensation. How does "basic economics" suggest the opposite?

maze-le 11y ago
I think what he means is: More people hava a college degree. That means more people are in competition to get "white collar" jobs. More competition on the "white collar"-job market, creates incentives to lower the cost per person (There is a bigger share of people willing to be paid less than a generation before). Therefore the average salary per person drops.
- guscost 11y ago
  Also, "more productive" means fewer people are needed to do the same amount of work, so labor prices are being pushed down from the demand side too (as long as the total work being done doesn't keep pace, i.e. low growth).
lr4444lr 11y ago
I do _not_ have a degree in economics, and am content to admit I only understand basic principles. My implicit point is that the credential does not "make one productive"; it qualifies one to perform in jobs that _carry_ higher productivity in the market. Without a commensurate increase in those jobs to match the higher proportion of the population obtaining the credential, the supply and demand equilibrium point moves. By all means, if there is data or more sophisticated principles at work, please correct me.
- CPLX 11y ago
  Productivity is a word that has a meaning. It is a measure of the amount of economic output that can be produced with a given amount of labor, measured in time. So for example if a worker can produce 20 lunches instead of 15 lunches of equal quality an hour, his productivity is higher. I think you lost the plot by assuming the original article was implying that because of college degrees productivity must be higher. That's not what it said, it was saying that more workers have college degrees and also productivity is at record high levels. The effect of the former could be arguable, but the result of the latter should be higher wages. It's a genuine concern to try to figure out what's going on if that's not what's happening.
  - lr4444lr 11y ago
    Okay, but I don't see the author's measure of productivity either. He seems to take your definition, as applied over the _entire economy_, and suggests that when applied to the individual wage level (presumably dividing by population) there is a conundrum. My suggestion is that there is a simple (if incomplete) explanation for this. An extreme example can illustrate my point well: if you took the entirety of Silicon Valley's tech workers and air-dropped them with no provisions into an aboriginal tribe in the Amazon rainforest (and they automatically knew the native language), who would be more productive in the local economy? Can you please clarify for the sake of readers (and me) how it is significantly different in the real world if the market of value-commanding labor changes under people's feet instead of transplanting them to a completely foreign environment?
    - CPLX 11y ago
      The authors definition and "my" definition and everyone's definition are the same because it's a commonly understood economics term. He's not talking about air-dropping people into the Amazon he's talking about workers productivity here in this economy and their wages in this economy, thus comparing apples to apples. And he's talking about the wages of an entire generation, not applying it down to some individual level. This shouldn't be confusing, these concepts are commonly understood by many, and are called macroeconomics. The only thing at issue here is your mischaracterization of this as somehow being opposed to "basic economics," with which further inquiry has revealed you clearly are unfamiliar.

malchow 11y ago

Great example of first-order thinking that animates so much seemingly progressive policy. College graduates earn more == produce hordes more college graduates!

CaptSpify 11y ago

How is the opposite true? I have no economic background, and am genuinely curious.