3 ms·

The fact that it has happened over and over, almost without fail, in the entire history of human economic activity?

pjc50 9y ago
.. up until the 1970s, when the wages-productivity link was broken. http://www.outsidethebeltway.com/what-happened-to-the-wage-and-productivity-link/ http://www.outsidethebeltway.com/what-happened-to-the-wage-a...
- grandmczeb 9y ago
  Using just wages is misleading since benefits (like healthcare) make up a much larger portion of total compensation than they used to. If you adjust for this, you'd find that that total compensation has roughly kept pace with productivity. http://www.nber.org/digest/oct08/w13953.html http://www.nber.org/digest/oct08/w13953.html
  - pjc50 9y ago
    Similar phenomena are visible in other developed countries, perhaps with different dates; this page gives a graph for the UK, where healthcare is paid from general taxation and has not suffered the same cost explosion: http://touchstoneblog.org.uk/2013/05/the-progress-of-exploitation/ http://touchstoneblog.org.uk/2013/05/the-progress-of-exploit... In that case the decoupling seems to have happened around 1990. The healthcare cost explosion in the US seems to be a whole other phenomenon which it's hard to get a handle on.
    - Consultant32452 9y ago
      Those charts almost never adjust for feminism and the fact that we added about 40% more people into the work force by allowing women to work. And for the US it certainly doesn't account for the 30 million or so in additional population we've gained through illegal immigration which increases wage competition on the low end of the spectrum, keeping the working poor wages down to the benefit of the upper classes. I've noticed that the "decoupling" in your UK chart roughly coincides with the creation of the EU which allowed cheap Eastern European laborers to come in which potentially had a similar impact to the illegal immigration in the US. Though I'm less confident of that since I'm not as familiar with economic changes in the UK over that time period. Productivity and wages are still related, it's just that productivity is not the only variable.

.. up until the 1970s, when the wages-productivity link was broken. http://www.outsidethebeltway.com/what-happened-to-the-wage-and-productivity-link/ http://www.outsidethebeltway.com/what-happened-to-the-wage-a...

grandmczeb 9y ago
Using just wages is misleading since benefits (like healthcare) make up a much larger portion of total compensation than they used to. If you adjust for this, you'd find that that total compensation has roughly kept pace with productivity. http://www.nber.org/digest/oct08/w13953.html http://www.nber.org/digest/oct08/w13953.html
- pjc50 9y ago
  Similar phenomena are visible in other developed countries, perhaps with different dates; this page gives a graph for the UK, where healthcare is paid from general taxation and has not suffered the same cost explosion: http://touchstoneblog.org.uk/2013/05/the-progress-of-exploitation/ http://touchstoneblog.org.uk/2013/05/the-progress-of-exploit... In that case the decoupling seems to have happened around 1990. The healthcare cost explosion in the US seems to be a whole other phenomenon which it's hard to get a handle on.
  - Consultant32452 9y ago
    Those charts almost never adjust for feminism and the fact that we added about 40% more people into the work force by allowing women to work. And for the US it certainly doesn't account for the 30 million or so in additional population we've gained through illegal immigration which increases wage competition on the low end of the spectrum, keeping the working poor wages down to the benefit of the upper classes. I've noticed that the "decoupling" in your UK chart roughly coincides with the creation of the EU which allowed cheap Eastern European laborers to come in which potentially had a similar impact to the illegal immigration in the US. Though I'm less confident of that since I'm not as familiar with economic changes in the UK over that time period. Productivity and wages are still related, it's just that productivity is not the only variable.