5 ms·
If anything, you seem to be saying the opposite of the Baumol effect! From Wikipedia: > The rise of wages in jobs without productivity gains derives from the r
by tgb 6y ago
If anything, you seem to be saying the opposite of the Baumol effect! From Wikipedia:
> The rise of wages in jobs without productivity gains derives from the requirement to compete for employees with jobs that have experienced gains and so can naturally pay higher salaries, just as classical economics predicts.
You claim that those low-efficiency jobs would still have workers if we were allowed to pay them a low enough price. Baumol effect says they'd choose to work higher-efficiency jobs until you paid them the same wage as a high-efficiency job worker.
- mrosett 6y ago> You claim that those low-efficiency jobs would still have workers if we were allowed to pay them a low enough price. I think you misunderstood "If you could pay someone $4/hour..." It's not a statement about minimum wage or anything like that; GP isn't claiming that there's a potential market of $4/hr labor that would exist without regulation. Instead I interpreted the sentence as "Consumers value certain tasks at e.g. $4/hr but due to the Baumol effect nobody is willing to work for that amount."
- TomSwirly 6y ago> $4/hr but due to the Baumol effect nobody is willing to work for that amount. No, it is NOT the Baumol effect that causes that. It's due to the fact that you cannot afford to live on $4/hr.
- Smaug123 6y agoBut why can you not afford to live on $4/hr? Or, why is everything so much more expensive than it used to be? These questions may have answers or they may have broken assumptions, but you did not even attempt to address the point at issue.
- tgb 6y agoIt's a rather weird way of saying that, but I suppose that must be what they meant.