Things that require labor get relatively more expensive as capital and labor become more abundant. This would be true even without government intervention thoug

Things that require labor get relatively more expensive as capital and labor become more abundant. This would be true even without government intervention though that doesn’t help. The below document goes into much more detail. > WHY ARE THE PRICES SO D*MN HIGH? > Health, Education, and the Baumol Effect https://www.mercatus.org/system/files/helland-tabarrok_why-are-the-prices-so-damn-high_v1.pdf https://www.mercatus.org/system/files/helland-tabarrok_why-a... > The Baumol effect is easy to explain but difficult to grasp.44 In 1826, when Beethoven’s String Quartet No. 14 was first played, it took four people 40 minutes to produce a performance. In 2010, it still took four people 40 minutes to produce a performance. Stated differently, in the nearly 200 years between 1826 and 2010, there was no growth in string quartet labor productivity. In 1826 it took 2.66 labor hours to produce one unit of output, and it took 2.66 labor hours to produce one unit of output in 2010. Fortunately, most other sectors of the economy have experi- enced substantial growth in labor productivity since 1826. We can measure growth in labor productivity in the economy as a whole by looking at the growth in real wages. In 1826 the average hourly wage for a production worker was $1.14. In 2010 the av- erage hourly wage for a production worker was $26.44, approxi- mately 23 times higher in real (inflation-adjusted) terms. Growth in average labor productivity has a surprising impli- cation: it makes the output of slow productivity-growth sectors (relatively) more expensive.