3 ms·
This is not how it works in actuality [0]. Wages are market, not productivity, driven. Even if particular work-field doesn’t increase in productivity, aggregate
by ivalm 6y ago
This is not how it works in actuality [0]. Wages are market, not productivity, driven. Even if particular work-field doesn’t increase in productivity, aggregate wage increases (due to perhaps aggregate productivity increases or change in labor relations) cause salary increase. Similarly, productivity increases don’t themselves cause salary increases.
Real life example, factory worker productivity rose dramatically with automation, and salaries did not keep up. Physician productivity did not increase much but salaries grew.
[0] https://en.m.wikipedia.org/wiki/Baumol%27s_cost_disease https://en.m.wikipedia.org/wiki/Baumol%27s_cost_disease