3 ms·
This article presents the reasons behind cost disease as if his interpretation is accepted fact, but that's not the case, right? Elsewhere, I've seen a lot more
by ellyagg 9y ago
This article presents the reasons behind cost disease as if his interpretation is accepted fact, but that's not the case, right? Elsewhere, I've seen a lot more disagreement among smart people.
For example, he says we have to pay band members a lot more now or they'd leave for better jobs and that this also explains the rise in education costs over the last few decades. Education costs have risen about 2.5x over the last 40 years, after adjusting for inflation. Has teacher pay risen 2.5x after adjusting for inflation?
- Lazare 9y agoBaumol's argument is that services will become relatively more expensive than goods, because productivity increases come faster in goods than services. This is obviously true, so yes, the article presents it as an accepted fact because it is. We have hard data for labour productivity by sector, manufacturing output, manufacturing employment, etc. We know the number of hours that goes into making a car versus giving a haircut, and how those numbers have changed over the past 40 years. > Education costs have risen about 2.5x over the last 40 years, after adjusting for inflation. Has teacher pay risen 2.5x after adjusting for inflation? No, which makes it clear that Baumol's cost disease is not the only driver behind education costs. :)