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I think we ought to be very careful about blaming wage deflation on double income families since there are much larger factors related to wage deflation: 1. Fr

I think we ought to be very careful about blaming wage deflation on double income families since there are much larger factors related to wage deflation: 1. Free trade and aggressive foreign monetary policy. The ability to manufacture good with much cheaper labor. 2. Automation. 3. The shift in the workforce to skilled labor. This has some overlap with 2. Even if the manufacturing industry that enabled the heady economic days of the 1950s and 60s return to the US, the people who get them will need some education. This problem was laid bare after the housing crisis. The problem of the "unemployable male", a man with a high school education who was doing fairly well working low skill labor jobs in construction. When all that came crashing down, those men were left with nowhere to go. One of the ironies is that, at least where I am, we are very lacking in some jobs. Skilled labor, such as carpenters, welders and technicians of varying kinds are in demand. There's still wage deflation, but certainly there are jobs.

0x445442 10y ago
Yeah, I wouldn't suggest double incomes families is the sole reason for wage deflation but I'd submit it played a significant part. WRT point 1; I remember 30 years ago thinking if the U.S. consumes such a disproportionate amount of the world's resources just how it was possible to bring the rest of the world up to the U.S's standard of living. Seems like the math doesn't add up here. Your points in item 3 are well taken. It's interesting, or maybe obvious, that the skilled labor examples you've listed can't be off shored. Often I think inflation has caused people to subconsciously choose to buy cheap, less quality goods. For example, buying furniture at IKEA versus buying hand made from someone local craftsman. Do people really demand the cheaper (price and quality) furniture or are they forced to accept the cheaper furniture because they're real disposable income is diminished? When we're talking about furniture it's not such a big deal but what about food? Are people really demanding carb, corn syrup laden crap with maximum calorie density or are they forced to make that choice because of the lower real wages? Finally, I'm generally for free markets and against the idea of tariffs. However, it seems to me business and labor are not playing on a level field here because business (specifically multi-nationals) are allowed to take advantage of labor arbitrage but labor is not allowed to take advantage of rent arbitrage; meaning labor just can't up and move to Thailand or where ever to take advantage of the cost of living difference.

0x445442 10y ago

Yeah, I wouldn't suggest double incomes families is the sole reason for wage deflation but I'd submit it played a significant part. WRT point 1; I remember 30 years ago thinking if the U.S. consumes such a disproportionate amount of the world's resources just how it was possible to bring the rest of the world up to the U.S's standard of living. Seems like the math doesn't add up here. Your points in item 3 are well taken. It's interesting, or maybe obvious, that the skilled labor examples you've listed can't be off shored. Often I think inflation has caused people to subconsciously choose to buy cheap, less quality goods. For example, buying furniture at IKEA versus buying hand made from someone local craftsman. Do people really demand the cheaper (price and quality) furniture or are they forced to accept the cheaper furniture because they're real disposable income is diminished? When we're talking about furniture it's not such a big deal but what about food? Are people really demanding carb, corn syrup laden crap with maximum calorie density or are they forced to make that choice because of the lower real wages? Finally, I'm generally for free markets and against the idea of tariffs. However, it seems to me business and labor are not playing on a level field here because business (specifically multi-nationals) are allowed to take advantage of labor arbitrage but labor is not allowed to take advantage of rent arbitrage; meaning labor just can't up and move to Thailand or where ever to take advantage of the cost of living difference.