4 ms·

I find the great decoupling fascinating and I don't think it gets enough study. There are a couple other things that I think contributed: The massive increase

I find the great decoupling fascinating and I don't think it gets enough study. There are a couple other things that I think contributed: The massive increase of women joining the labor market in the US just after 1970 largely as a consequence of the widespread adoption of oral contraceptives in the young population. [1] The People's Republic Of China was formally admitted to the UN in 1971, and following that in 1972 Nixon visited - effectively opening China as an actual labor market. Edit: I think one of the major takeaways should be that, changes in worldwide monetary policy allowed for pent up demand for globalization to be realized and that accelerated shifts from onshore to offshore manufacturing. Basically it allowed the US to stop building, and start buying. [1] https://dash.harvard.edu/bitstream/handle/1/2624453/Goldin_PowerPill.pdf?sequence=4_1 https://dash.harvard.edu/bitstream/handle/1/2624453/Goldin_P...

taffer 6y ago
Until Deng's reforms in the 1980s, China remained economically irrelevant.
jasonhansel 6y ago
I wonder if this chart is also relevant: https://commons.m.wikimedia.org/wiki/File:Global_Temperature_And_Forces.svg https://commons.m.wikimedia.org/wiki/File:Global_Temperature...
rbanffy 6y ago
> The massive increase of women joining the labor market in the US This drives down the cost of labor. If, to make ends meet, you need two people working, they won't be able to easily move to pursue better employment unless both find employment at the same place at the same time, or that the new offer is significantly better than the previous one. As this would depress salaries everywhere, that's very unlikely.
- speeder 6y ago
  What is very unlikely? I do not understood what you meant.
  - rbanffy 6y ago
    Moving to a different geography for a substantially higher compensation. The same phenomenon depresses compensation everywhere, so chances are most people won't be able to find compensation that's enough to keep the family going.
    - DenisM 6y ago
      > As this would depress salaries everywhere, that's very unlikely. This part of your comment was super confusing. So much so it seems better in reverse: >As that's very unlikely, this would depress salaries everywhere.
      - rbanffy 6y ago
        The unlikely is that they'd find employment that's good enough to provide for the whole household elsewhere, because all geographies would be experiencing the same pressure.
- earthboundkid 6y ago
  Unlike increasing the labor market via immigration or population increase, women mostly live in households with men, so adding them to the pool increases the number of workers, but not the number of households. Employers need to pay enough for it to be worthwhile for the household, not the individual worker. The result is lower wages per worker.
tankenmate 6y ago
Another big mover came just after, 1973, the oil supply shock. This in turn lead to stagflation. Another thing I didn't see in that data set was the relative growth / decline of union membership; i.e. how that affected wage growth, indirect effect of negotiating power. It would also be interesting to see whether that was a leading co-factor or a following co-factor.
- Gibbon1 6y ago
  What interesting is looking at world oil production over the last 100 or so years. Oil production follows a smooth exponential curve right up till about 1970. And then it becomes supply constrained.
- chmod600 6y ago
  Unions lose a lot of power during globalization anyway. Even if they had hung on to membership, what would they do?
  - complexworld 6y ago
    Organized labor can negotiate with corporations and politicians to defend the interests of their members. The way things are now in the US wasn't inevitable.
brightball 6y ago
This is something I’ve always assumed to be true. It’s incredibly interesting that so much money is concentrated on the major Pacific ports (California and Washington). I always wonder how much of the California economic claims are due to California vs due to access to cheap overseas labor with major ports.

taffer 6y ago

Until Deng's reforms in the 1980s, China remained economically irrelevant.

jasonhansel 6y ago

I wonder if this chart is also relevant: https://commons.m.wikimedia.org/wiki/File:Global_Temperature_And_Forces.svg https://commons.m.wikimedia.org/wiki/File:Global_Temperature...

rbanffy 6y ago

> The massive increase of women joining the labor market in the US This drives down the cost of labor. If, to make ends meet, you need two people working, they won't be able to easily move to pursue better employment unless both find employment at the same place at the same time, or that the new offer is significantly better than the previous one. As this would depress salaries everywhere, that's very unlikely.

speeder 6y ago
What is very unlikely? I do not understood what you meant.
- rbanffy 6y ago
  Moving to a different geography for a substantially higher compensation. The same phenomenon depresses compensation everywhere, so chances are most people won't be able to find compensation that's enough to keep the family going.
  - DenisM 6y ago
    > As this would depress salaries everywhere, that's very unlikely. This part of your comment was super confusing. So much so it seems better in reverse: >As that's very unlikely, this would depress salaries everywhere.
    - rbanffy 6y ago
      The unlikely is that they'd find employment that's good enough to provide for the whole household elsewhere, because all geographies would be experiencing the same pressure.
earthboundkid 6y ago
Unlike increasing the labor market via immigration or population increase, women mostly live in households with men, so adding them to the pool increases the number of workers, but not the number of households. Employers need to pay enough for it to be worthwhile for the household, not the individual worker. The result is lower wages per worker.

tankenmate 6y ago

Another big mover came just after, 1973, the oil supply shock. This in turn lead to stagflation. Another thing I didn't see in that data set was the relative growth / decline of union membership; i.e. how that affected wage growth, indirect effect of negotiating power. It would also be interesting to see whether that was a leading co-factor or a following co-factor.

Gibbon1 6y ago
What interesting is looking at world oil production over the last 100 or so years. Oil production follows a smooth exponential curve right up till about 1970. And then it becomes supply constrained.
chmod600 6y ago
Unions lose a lot of power during globalization anyway. Even if they had hung on to membership, what would they do?
- complexworld 6y ago
  Organized labor can negotiate with corporations and politicians to defend the interests of their members. The way things are now in the US wasn't inevitable.

brightball 6y ago

This is something I’ve always assumed to be true. It’s incredibly interesting that so much money is concentrated on the major Pacific ports (California and Washington). I always wonder how much of the California economic claims are due to California vs due to access to cheap overseas labor with major ports.