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These "wage decoupling" studies generally make two methodological mistakes. 1) They do not include fringe benefits in their calculation of wages 2) They use on

by ancap 9y ago

These "wage decoupling" studies generally make two methodological mistakes. 1) They do not include fringe benefits in their calculation of wages 2) They use one inflation measure to adjust for cost changes in productivity over time and a different inflation measure to adjust for cost changes in wages over time. Doing a quick search over their methodology [1], to their credit, I believe EPI avoids mistake #1, but it appears they make mistake #2. Studies which include the complete value of benefits in their calculation of wages and use the same method to deflate both wages and productivity show that there is no "wage decoupling" from productivity. [1] http://www.epi.org/data/methodology/ http://www.epi.org/data/methodology/

refurb 9y ago
You raise a good point. If you look at monetary and non-monetary compensation, wages have increased significantly. Of course, a lot of that has gone to health insurance which is not ideal.
frgtpsswrdlame 9y ago
>Studies which include the complete value of benefits in their calculation of wages and use the same method to deflate both wages and productivity show that there is no "wage decoupling" from productivity. Do you have an example?
- ancap 9y ago
  https://files.stlouisfed.org/files/htdocs/publications/es/07/ES0707.pdf https://files.stlouisfed.org/files/htdocs/publications/es/07... http://www.nber.org/papers/w13953.pdf http://www.nber.org/papers/w13953.pdf http://cep.lse.ac.uk/pubs/download/dp1246.pdf http://cep.lse.ac.uk/pubs/download/dp1246.pdf The last one they muddy the waters quite a big where they talk about a "net decoupling" and "gross decoupling". The first they use the same deflator and the second they use a different deflator. Using different deflators for wages and productivity means you're comparing apples to oranges. Economists Donald Boudreaux and Liya Plagashvili discuss the topic in greater detail in this WSG op-ed https://www.wsj.com/articles/donald-boudreaux-and-liya-palagashvili-the-myth-of-the-great-wages-decoupling-1394151793 https://www.wsj.com/articles/donald-boudreaux-and-liya-palag...
  - frgtpsswrdlame 9y ago
    Cool, thanks for the follow up!

by ancap 9y ago

refurb 9y ago

You raise a good point. If you look at monetary and non-monetary compensation, wages have increased significantly. Of course, a lot of that has gone to health insurance which is not ideal.

frgtpsswrdlame 9y ago

>Studies which include the complete value of benefits in their calculation of wages and use the same method to deflate both wages and productivity show that there is no "wage decoupling" from productivity. Do you have an example?

ancap 9y ago
https://files.stlouisfed.org/files/htdocs/publications/es/07/ES0707.pdf https://files.stlouisfed.org/files/htdocs/publications/es/07... http://www.nber.org/papers/w13953.pdf http://www.nber.org/papers/w13953.pdf http://cep.lse.ac.uk/pubs/download/dp1246.pdf http://cep.lse.ac.uk/pubs/download/dp1246.pdf The last one they muddy the waters quite a big where they talk about a "net decoupling" and "gross decoupling". The first they use the same deflator and the second they use a different deflator. Using different deflators for wages and productivity means you're comparing apples to oranges. Economists Donald Boudreaux and Liya Plagashvili discuss the topic in greater detail in this WSG op-ed https://www.wsj.com/articles/donald-boudreaux-and-liya-palagashvili-the-myth-of-the-great-wages-decoupling-1394151793 https://www.wsj.com/articles/donald-boudreaux-and-liya-palag...
- frgtpsswrdlame 9y ago
  Cool, thanks for the follow up!