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- Two-income households: doubled the labor supply without making an equally large increase in demand (NOT A DIG AGAINST FEMINISM, JUST TALKING NUMBERS) - Autom

- Two-income households: doubled the labor supply without making an equally large increase in demand (NOT A DIG AGAINST FEMINISM, JUST TALKING NUMBERS) - Automation. Not talking AI. Just old-fashioned mechanical engineering and micro-controllers. Not going to name any names, but almost every practical thing you buy is made in only a handful of factories, and those factories don't need very many people to run at full-tilt.[0] - BS Jobs. Most of the US defense spending is make-work for engineers/welders/managers/subcontractors/etc working on projects of dubious strategic value. It sure as hell doesn't go to the soldiers. 30% of hospital payroll is admin staff. Higher ed is the same story. [0] https://www.bloomberg.com/news/articles/2017-06-21/how-just-14-people-make-500-000-tons-of-steel-a-year-in-austria https://www.bloomberg.com/news/articles/2017-06-21/how-just-...

jimmaswell 9y ago
Why would tax funded make-work result in lower wages across the board?
- jstewartmobile 9y ago
  Because it's more like alms than a salary. Even on a meager salary, you can still be overpaid.
  - xapata 9y ago
    Yes, but that doesn't answer the question.
    - pasquinelli 9y ago
      i think the idea is that unemployment should be higher. the fact employment numbers are kept high by bs jobs makes demand for labor seem higher than it is.
      - walshemj 9y ago
        That's assuming that the governments don't game the unemployment statistics (and they do agressivly) for example if the UK used the older definition of unemployment it would be higher than 4.3.
    - jstewartmobile 9y ago
      The article is "Why Wages Aren't Growing," not "Why are wages lower across the board?" I'd say make-work is why wages have only stagnated instead of catastrophically plummeting.
- hkmurakami 9y ago
  F35 procurement is made from something like 40+ states. This makes zero sense from an engineering/supply chain perspective (consider the fact that Toyota has the vast majority of its domestic supply chain within Aichi prefecture, up to 3 levels of sub-suppliers down). Much of defense spending is a jobs program that is brought home by congressmen to their home states. (and when it's a jobs program, supply of prospective employees outpaces demand, and thus you likely won't have wage growth)
  - ianai 9y ago
    Sounds less like a ding on defense spending than a ding on labor market demand. Imagine just how many industries and entire localities would lose their base income sources if defense spending were 0. I wonder how it would change if the “make work” government institution were NASA. I imagine their projects would employ more people across more diverse fields.
    - intended 9y ago
      Nah, NASA is in the end, specialist work. The Army can do everything from dig ditches to build sheds and structures - its there to have the sheer physical ability of killing its enemies to varying degrees of dead.
ComodoHacker 9y ago
>30% of hospital payroll is admin staff Interesting. Any links to back this up?
- jstewartmobile 9y ago
  Overstated by 5%, but still crazy: http://www.commonwealthfund.org/publications/in-the-literature/2014/sep/hospital-administrative-costs http://www.commonwealthfund.org/publications/in-the-literatu...
  - ComodoHacker 9y ago
    Ah, it's all administrative costs, not just payroll. That's more reasonable.
    - jstewartmobile 9y ago
      I know this is getting down into the weeds of accounting, but what would be an administrative cost that is not payroll? I just know from my own business that most of the big numbers that go through admin (like benefits, insurance, etc) end up itemized in other columns, and admin itself is all payroll.
      - gertef 9y ago
        Anything administrative paid to a third-party vendor is administrative cost but not payroll. For example, the EPIC software license fee is admin but not payroll.
e12e 9y ago
> Two-income households: doubled the labor supply without making an equally large increase in demand Interesting perspective. In Norway the consensus is that equal employment and the resulting doubling of productivity was a major force in increasing standard of living - way before the oil boom (corally: Sweden and Denmark are also rich/high standard of living - with no/hardly any oil industry).
- roymurdock 9y ago
  Growing consensus among economists is that productivity slowdown is key to understanding stagnation. The top commenter almost put his finger on it when he said that workers aren't paid more because they aren't worth more, before attributing it to the "monopoly of capitalism". In reality if the machines we rely on to be productive aren't improving much themselves, then our productivity is capped. Technological innovation has slowed down a lot over the past 20-30 years, and is now diffusing throughout the world rather than being pushed forward by the large industrial conglomerates, pharmaceuticals, chipmakers, OEMs, etc.
  - roymurdock 9y ago
    A recent post on this topic: https://mainlymacro.blogspot.com/2017/09/productivity-and-monetary-policy.html https://mainlymacro.blogspot.com/2017/09/productivity-and-mo...
- adventured 9y ago
  It's worth noting that doubling the output of a tiny economy of 5 million people, and doubling the output of a large nation that in 1968 had half of all global manufacturing - are two very, very different things. If you double America's output today, and take the GDP up toward $40 trillion - who is going to buy all of those products and services in the near term? Nobody, it couldn't happen over a short period of historical time (10-20 years); that supply could not be absorbed, it would be a disaster for the producing nation. If you're Norway in 1990, and you have a $100 billion GDP, doubling that into a global economy of $28 trillion, is very feasible. If you're the US in 1990 with a $6.x trillion economy (20-25% of global GDP), doubling that quickly is essentially impossible. A global economy of $28 trillion can absorb an additional $100 billion in output from Norway fairly easily over a few years, assuming it's competitive / desired output. As a smaller economy selling into a massive ocean globally, you're dramatically less bound by the global growth rate; if you're the world's largest economy, you're tightly (not strictly) bound to global growth rates. From its smaller base, Norway can see huge economic gains and defy global growth rate limits; for example, imagine Norway having an Apple size company, that grew from $30b to $200b in sales over six or seven years, it would add 50% to their economy and that output could be easily absorbed by the global economy.
turk184 9y ago
Lots of make-work jobs in local and state governments, an over-supply of police in many locales (due to unions dictating "correct" force size). What really gets me is how many tech recruiters there are--how do all those people make enough to live given their low quality of service and expertise they provide?

jimmaswell 9y ago

Why would tax funded make-work result in lower wages across the board?

jstewartmobile 9y ago
Because it's more like alms than a salary. Even on a meager salary, you can still be overpaid.
- xapata 9y ago
  Yes, but that doesn't answer the question.
  - pasquinelli 9y ago
    i think the idea is that unemployment should be higher. the fact employment numbers are kept high by bs jobs makes demand for labor seem higher than it is.
    - walshemj 9y ago
      That's assuming that the governments don't game the unemployment statistics (and they do agressivly) for example if the UK used the older definition of unemployment it would be higher than 4.3.
  - jstewartmobile 9y ago
    The article is "Why Wages Aren't Growing," not "Why are wages lower across the board?" I'd say make-work is why wages have only stagnated instead of catastrophically plummeting.
hkmurakami 9y ago
F35 procurement is made from something like 40+ states. This makes zero sense from an engineering/supply chain perspective (consider the fact that Toyota has the vast majority of its domestic supply chain within Aichi prefecture, up to 3 levels of sub-suppliers down). Much of defense spending is a jobs program that is brought home by congressmen to their home states. (and when it's a jobs program, supply of prospective employees outpaces demand, and thus you likely won't have wage growth)
- ianai 9y ago
  Sounds less like a ding on defense spending than a ding on labor market demand. Imagine just how many industries and entire localities would lose their base income sources if defense spending were 0. I wonder how it would change if the “make work” government institution were NASA. I imagine their projects would employ more people across more diverse fields.
  - intended 9y ago
    Nah, NASA is in the end, specialist work. The Army can do everything from dig ditches to build sheds and structures - its there to have the sheer physical ability of killing its enemies to varying degrees of dead.

ComodoHacker 9y ago

>30% of hospital payroll is admin staff Interesting. Any links to back this up?

jstewartmobile 9y ago
Overstated by 5%, but still crazy: http://www.commonwealthfund.org/publications/in-the-literature/2014/sep/hospital-administrative-costs http://www.commonwealthfund.org/publications/in-the-literatu...
- ComodoHacker 9y ago
  Ah, it's all administrative costs, not just payroll. That's more reasonable.
  - jstewartmobile 9y ago
    I know this is getting down into the weeds of accounting, but what would be an administrative cost that is not payroll? I just know from my own business that most of the big numbers that go through admin (like benefits, insurance, etc) end up itemized in other columns, and admin itself is all payroll.
    - gertef 9y ago
      Anything administrative paid to a third-party vendor is administrative cost but not payroll. For example, the EPIC software license fee is admin but not payroll.

e12e 9y ago

> Two-income households: doubled the labor supply without making an equally large increase in demand Interesting perspective. In Norway the consensus is that equal employment and the resulting doubling of productivity was a major force in increasing standard of living - way before the oil boom (corally: Sweden and Denmark are also rich/high standard of living - with no/hardly any oil industry).

roymurdock 9y ago
Growing consensus among economists is that productivity slowdown is key to understanding stagnation. The top commenter almost put his finger on it when he said that workers aren't paid more because they aren't worth more, before attributing it to the "monopoly of capitalism". In reality if the machines we rely on to be productive aren't improving much themselves, then our productivity is capped. Technological innovation has slowed down a lot over the past 20-30 years, and is now diffusing throughout the world rather than being pushed forward by the large industrial conglomerates, pharmaceuticals, chipmakers, OEMs, etc.
- roymurdock 9y ago
  A recent post on this topic: https://mainlymacro.blogspot.com/2017/09/productivity-and-monetary-policy.html https://mainlymacro.blogspot.com/2017/09/productivity-and-mo...
adventured 9y ago
It's worth noting that doubling the output of a tiny economy of 5 million people, and doubling the output of a large nation that in 1968 had half of all global manufacturing - are two very, very different things. If you double America's output today, and take the GDP up toward $40 trillion - who is going to buy all of those products and services in the near term? Nobody, it couldn't happen over a short period of historical time (10-20 years); that supply could not be absorbed, it would be a disaster for the producing nation. If you're Norway in 1990, and you have a $100 billion GDP, doubling that into a global economy of $28 trillion, is very feasible. If you're the US in 1990 with a $6.x trillion economy (20-25% of global GDP), doubling that quickly is essentially impossible. A global economy of $28 trillion can absorb an additional $100 billion in output from Norway fairly easily over a few years, assuming it's competitive / desired output. As a smaller economy selling into a massive ocean globally, you're dramatically less bound by the global growth rate; if you're the world's largest economy, you're tightly (not strictly) bound to global growth rates. From its smaller base, Norway can see huge economic gains and defy global growth rate limits; for example, imagine Norway having an Apple size company, that grew from $30b to $200b in sales over six or seven years, it would add 50% to their economy and that output could be easily absorbed by the global economy.

turk184 9y ago

Lots of make-work jobs in local and state governments, an over-supply of police in many locales (due to unions dictating "correct" force size). What really gets me is how many tech recruiters there are--how do all those people make enough to live given their low quality of service and expertise they provide?