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. If Gordon is right, sagging productivity figures simply reflect . the fact that scientific progress doesn’t have as much impact on . the economy as it o
by joeyo 10y ago
. If Gordon is right, sagging productivity figures simply reflect
. the fact that scientific progress doesn’t have as much impact on
. the economy as it once did. Rather than waiting for productivity
. growth and wages to rebound of their own accord, Gordon supports
. policies designed to expand the size and quality of the labor
. force, such as raising the retirement age, letting more
. immigrants into the country, and expanding access to higher
. education.
Assuming for the moment that Gordon is right about the diagnosis, isn't this remedy exactly backwards? If productivity (per worker?) is down, than surely increasing the size of the labor pool is exactly the wrong medicine and will result productivity per worker to decrease further. Increasing the quality of the labor force through higher education, etc, makes sense. But how can increasing the size of the pool lead to wage increases in the absence of other productivity gains?
- georganos 10y agoI read that as in increasing the number of highly qualified immigrants, thus increasing the quality of the workforce.
- joeyo 10y agoWhat's your read on increasing the retirement age, then?
- douche 10y agoAwesome, keep the boomers around even longer, clogging up the jobs and lanes of advancement. My generation is never going to be able to retire anyway, since Social Security will be kaput long before we see a dime, so whatever...
- vasilipupkin 10y ago1) more people means more demand for stuff, means more incentive to produce stuff, more competition to sell them stuff and higher economic growth 2) if people want to come here, it's because they think they are not being as productive as they could be where they are now.
- joeyo 10y agoRegarding 1), more people means more demand for stuff only insofar as those people have money to buy stuff. In any event, you have the causal chain backwards:, increases in productivity allow for the support of a larger population; a larger population does not (by itself) lead to productivity increases. India has over a billion people, yet also much lower productivity than the US, so population alone can't be the whole story. Regarding 2), I have no doubt that potential immigrants think they can be more productive in the US than elsewhere! But that doesn't imply that their participation in the US labor pool will boost productivity further still.
- vasilipupkin 10y agoThe goal is not to boost productivity but to boost GDP growth of which productivity growth is one component. A larger population, all other things being equal, leads to more GDP growth. All things are not equal when you compare India and US, so that comparison is not relevant. Compare US with current number of people vs US with 10 times fewer people. Which one is better ?
- joeyo 10y agoAssuming you mean GDP per-capita ... maybe? I suspect that GDP is highly correlated with productivity, anyway. Which way does the causality go? Why should the US not have many fewer people and why couldn't that be better? There's nothing magical about 315 million people. A much smaller population would be better for ecosystems, global warming, etc. I'd demand the proviso that the population shouldn't be decimated overnight and that the age distribution can't be too skewed (too many youth or too many old). But barring that, I don't see why some lower population (even tenfold fewer) couldn't be "better".
- vasilipupkin 10y agoI am talking about better not in some sort of philosophical sense, but in terms of GDP and GDP per capita