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The article is about real pay growth of 1% per year. You are commenting as if it were about nominal pay growth of 1% per year. Accepting that housing and healt
by AlanSE 8y ago
The article is about real pay growth of 1% per year. You are commenting as if it were about nominal pay growth of 1% per year.
Accepting that housing and healthcare costs have outpaced wage growth, that mathematically implies that costs of other goods and services were outpaced by wages by an even larger (appropriately weighted) margin.
- pjc50 8y agoExactly. The west has experienced "Baumol cost disease", where things that can be outsourced or automated have got a lot cheaper and things that can't have got a lot more expensive. See https://medium.com/@6pranavk/insight-of-the-day-cost-disease-c14f50c1cd2e https://medium.com/@6pranavk/insight-of-the-day-cost-disease... especially the graph.
- Retric 8y agoFirst no, it was "at most 1%" which means it could be negative. > costs of other goods and services where outpaced by wages You're implying that all people consume the same basket of goods as calculated by the article. Wage growth and spending is not even across society, so most people could be worse off while all of the above math holds true. labour productivity rose by 75% in America from 1973 to 2016, while average pay rose by less than 50% and median pay by just over 10%. which is largely because between 1979 and 2016, pay adjusted for inflation for the bottom fifth of American earners barely rose at all. Further, many goods like computing power have gotten vastly cheaper, but that savings mostly end up with people who have disposable income. Spend a lower percentage of your income on such goods and the benifit decreases. This means the the bottom half of the work force is worse off than you might think.