5 ms·

How is it possible that rents are rising while incomes aren't? Is the housing stock shrinking, or growing slower than population? OK there maybe some banking/Fe

How is it possible that rents are rising while incomes aren't? Is the housing stock shrinking, or growing slower than population? OK there maybe some banking/Fed/investment related trickery moving housing prices (to buy) irrespective of "organic" demand, but not rents, right?

rectang 8y ago
Business is innovating through extraction of ever greater wealth from its workforce. Commercial entities are organisms evolving in a savage environment, doing what it ever takes to survive. Labor, in contrast, does not innovate as quickly in response and is being eaten.
- anovikov 8y ago
  Come on, it is supply and demand. Rents can't be raised unless demand is rising or supply is falling. Neither seems to be the case.
dredmorbius 8y ago
Iron Law of Wages: The iron law of wages is a proposed law of economics that asserts that real wages always tend, in the long run, toward the minimum wage necessary to sustain the life of the worker. The theory was first named by Ferdinand Lassalle in the mid-nineteenth century. Karl Marx and Friedrich Engels attribute the doctrine to Lassalle (notably in Marx's 1875 Critique of the Gotha Programme), the idea to Thomas Malthus's An Essay on the Principle of Population, and the terminology to Goethe's "great, eternal iron laws" in Das Göttliche.[1][2][3] https://en.wikipedia.org/wiki/Iron_law_of_wages https://en.wikipedia.org/wiki/Iron_law_of_wages Law of Rent: the rent of a land site is equal to the economic advantage obtained by using the site in its most productive use, relative to the advantage obtained by using marginal (i.e., the best rent-free) land for the same purpose, given the same inputs of labor and capital. https://en.wikipedia.org/wiki/Law_of_rent https://en.wikipedia.org/wiki/Law_of_rent Wages tend to subsistence. Rent tends to full surplus value.
- anovikov 8y ago
  How is this compatible with the dramatic improvement of living standards worldwide we observe over last 150+ years? Vast majority of people don't earn anything except wages.
  - dredmorbius 8y ago
    Exogenous factors. https://www.worldcat.org/title/rise-and-fall-of-american-growth-the-us-standard-of-living-since-the-civil-war/oclc/1027939035&referer=brief_results https://www.worldcat.org/title/rise-and-fall-of-american-gro... https://www.worldcat.org/title/great-transformation-the-political-and-economic-origins-of-our-time/oclc/904414596&referer=brief_results https://www.worldcat.org/title/great-transformation-the-poli...
a3n 8y ago
There's a housing shortage in many/most metro areas, so rents go up as demand exceeds supply. So far, the demand for minimum wage type labor has not been severe enough to raise those wages. My guess is that minimum wage jobs are high turnover, and employers at that level are just used to constantly being in hiring mode. The job of a manager, and a writer of procedure manuals, has probably taken on more of "how to quickly onboard someone into acceptable productivity, and make their hiring worthwhile until they inevitably quit." It may even be cheaper to churn, rather than pay longevity raises and benefits.
- anovikov 8y ago
  How does the demand exceed supply? It would mean that the increase in number of people is higher than increase in amount of available housing. It doesn't seem to be the case. If this is about everyone flocking to areas with best economy then well, it could be a problem for highly paid professionals but hardly for minimum wage workers.

rectang 8y ago

Business is innovating through extraction of ever greater wealth from its workforce. Commercial entities are organisms evolving in a savage environment, doing what it ever takes to survive. Labor, in contrast, does not innovate as quickly in response and is being eaten.

anovikov 8y ago
Come on, it is supply and demand. Rents can't be raised unless demand is rising or supply is falling. Neither seems to be the case.

dredmorbius 8y ago

Iron Law of Wages: The iron law of wages is a proposed law of economics that asserts that real wages always tend, in the long run, toward the minimum wage necessary to sustain the life of the worker. The theory was first named by Ferdinand Lassalle in the mid-nineteenth century. Karl Marx and Friedrich Engels attribute the doctrine to Lassalle (notably in Marx's 1875 Critique of the Gotha Programme), the idea to Thomas Malthus's An Essay on the Principle of Population, and the terminology to Goethe's "great, eternal iron laws" in Das Göttliche.[1][2][3] https://en.wikipedia.org/wiki/Iron_law_of_wages https://en.wikipedia.org/wiki/Iron_law_of_wages Law of Rent: the rent of a land site is equal to the economic advantage obtained by using the site in its most productive use, relative to the advantage obtained by using marginal (i.e., the best rent-free) land for the same purpose, given the same inputs of labor and capital. https://en.wikipedia.org/wiki/Law_of_rent https://en.wikipedia.org/wiki/Law_of_rent Wages tend to subsistence. Rent tends to full surplus value.

anovikov 8y ago
How is this compatible with the dramatic improvement of living standards worldwide we observe over last 150+ years? Vast majority of people don't earn anything except wages.
- dredmorbius 8y ago
  Exogenous factors. https://www.worldcat.org/title/rise-and-fall-of-american-growth-the-us-standard-of-living-since-the-civil-war/oclc/1027939035&referer=brief_results https://www.worldcat.org/title/rise-and-fall-of-american-gro... https://www.worldcat.org/title/great-transformation-the-political-and-economic-origins-of-our-time/oclc/904414596&referer=brief_results https://www.worldcat.org/title/great-transformation-the-poli...

a3n 8y ago

There's a housing shortage in many/most metro areas, so rents go up as demand exceeds supply. So far, the demand for minimum wage type labor has not been severe enough to raise those wages. My guess is that minimum wage jobs are high turnover, and employers at that level are just used to constantly being in hiring mode. The job of a manager, and a writer of procedure manuals, has probably taken on more of "how to quickly onboard someone into acceptable productivity, and make their hiring worthwhile until they inevitably quit." It may even be cheaper to churn, rather than pay longevity raises and benefits.

anovikov 8y ago
How does the demand exceed supply? It would mean that the increase in number of people is higher than increase in amount of available housing. It doesn't seem to be the case. If this is about everyone flocking to areas with best economy then well, it could be a problem for highly paid professionals but hardly for minimum wage workers.