5 ms·

It seems that we're slowly heading to a place where salaries are going to be much lower, because of less working hours and loss of the kinds of jobs that paid a

It seems that we're slowly heading to a place where salaries are going to be much lower, because of less working hours and loss of the kinds of jobs that paid a good living wage. Or those same jobs will just pay a lower salary. It could be good or bad. The good part is, less buying. Less shopping. Smaller homes. Lower needs. etc. The bad part, all of that part of the economy that was depending those incomes is going to have to transition to something else. Maybe it could lead to more people moving to lower cost countries... OR... more people living like how people live in Bangkok, Beijing or Bali. Either way, the end the middle class as we know it in America is quickly coming to an end.

airhead969 6y ago
There are more people because of population trends. Simultaneously, there are fewer jobs due to automation. Wages will continue to decline with an oversupply of labor.
- astrange 6y ago
  Automation does not reduce jobs. It is impossible to run out of jobs, because 1. demand is infinite 2. jobs are based on "comparative advantage", and people have comparative advantage with automation because they're the same species as their customers. Also, this isn't even happening. It's mostly an artifact because productivity of e.g. computer manufacturing looks super efficient if you measure each 2020 computer as containing a million 1970s computers. > Wages will continue to decline with an oversupply of labor. This is called the "lump of labor" fallacy. Increasing the number of people increases both supply and demand, and therefore improves the economy, and therefore may raise wages. (Economists don't simply use supply and demand for the labor market anyway, they consider things like monopsony and search models.)
andi999 6y ago
It doesnt have to be. Overall productivity is increasing (or at least has been for the last decades). So only the product of work hours times productivity determines if salaries get much lower or not. (Of course if from one day to the next you work only 50% then your claim is true)
jonplackett 6y ago
House prices not necessarily. House prices are driven by demand and by ability to borrow. If everyone takes a pay cut, everyone can pay less and house prices should go down. The only reason house prices have gone so silly recently is insanely cheap credit has let everyone bid against each other to drive house prices up.
- Rule35 6y ago
  Real estate rarely goes down, outside of a total bubble deflation. People just hold onto it longer, unable to profitably sell, further trapping others in a cycle of rent. The current bubble will drain money from producers to the value-empty mortgage sector for decades.
  - refurb 6y ago
    Real estate rarely goes down, outside of a total bubble deflation. Detroit, Baltimore, Camden would like a word with you and your theory that housing never goes down.
    - Rule35 6y ago
      > rarely > outside of a total bubble deflation. Detroit is rare, and Detroit's bubble popped hard at the same time as real-estate in general.
      - anm89 6y ago
        My city Pittsburgh would also like to have a word with you. It's doing well now after a 40 year downturn. Long enough to ruin many peoples lives permanently where they couldn't outlast the cycle. There are A LOT of places in the US where real estate has not been a panacea of wealth accumulation.
  - astrange 6y ago
    Your model that people can afford to hold onto an asset with maintenance costs forever seems like it can't be true. It's possible for your primary residence, but that's because homes have a use - you can live in them. If you're using it and paying the mortgage then it doesn't matter if you're underwater. Anyway, this can be solved by waiting for them to die, and in the meantime building more houses with more efficient land use.
switch007 6y ago
I definitely see lower wages due to less employment (as is rife in the UK with our zero hour contracts). House prices will rise unabated, compounding the cost of living issues. I’ll only support reduced work weeks (because it’ll inevitably be used to reduce wages eventually) if our housing problem is fixed.

airhead969 6y ago

There are more people because of population trends. Simultaneously, there are fewer jobs due to automation. Wages will continue to decline with an oversupply of labor.

astrange 6y ago
Automation does not reduce jobs. It is impossible to run out of jobs, because 1. demand is infinite 2. jobs are based on "comparative advantage", and people have comparative advantage with automation because they're the same species as their customers. Also, this isn't even happening. It's mostly an artifact because productivity of e.g. computer manufacturing looks super efficient if you measure each 2020 computer as containing a million 1970s computers. > Wages will continue to decline with an oversupply of labor. This is called the "lump of labor" fallacy. Increasing the number of people increases both supply and demand, and therefore improves the economy, and therefore may raise wages. (Economists don't simply use supply and demand for the labor market anyway, they consider things like monopsony and search models.)

andi999 6y ago

It doesnt have to be. Overall productivity is increasing (or at least has been for the last decades). So only the product of work hours times productivity determines if salaries get much lower or not. (Of course if from one day to the next you work only 50% then your claim is true)

jonplackett 6y ago

House prices not necessarily. House prices are driven by demand and by ability to borrow. If everyone takes a pay cut, everyone can pay less and house prices should go down. The only reason house prices have gone so silly recently is insanely cheap credit has let everyone bid against each other to drive house prices up.

Rule35 6y ago
Real estate rarely goes down, outside of a total bubble deflation. People just hold onto it longer, unable to profitably sell, further trapping others in a cycle of rent. The current bubble will drain money from producers to the value-empty mortgage sector for decades.
- refurb 6y ago
  Real estate rarely goes down, outside of a total bubble deflation. Detroit, Baltimore, Camden would like a word with you and your theory that housing never goes down.
  - Rule35 6y ago
    > rarely > outside of a total bubble deflation. Detroit is rare, and Detroit's bubble popped hard at the same time as real-estate in general.
    - anm89 6y ago
      My city Pittsburgh would also like to have a word with you. It's doing well now after a 40 year downturn. Long enough to ruin many peoples lives permanently where they couldn't outlast the cycle. There are A LOT of places in the US where real estate has not been a panacea of wealth accumulation.
- astrange 6y ago
  Your model that people can afford to hold onto an asset with maintenance costs forever seems like it can't be true. It's possible for your primary residence, but that's because homes have a use - you can live in them. If you're using it and paying the mortgage then it doesn't matter if you're underwater. Anyway, this can be solved by waiting for them to die, and in the meantime building more houses with more efficient land use.

switch007 6y ago

I definitely see lower wages due to less employment (as is rife in the UK with our zero hour contracts). House prices will rise unabated, compounding the cost of living issues. I’ll only support reduced work weeks (because it’ll inevitably be used to reduce wages eventually) if our housing problem is fixed.