7 ms·

Also the real wages have not increased much but all the expenses have, it's just demoralizing

a-user-you-like 4y ago
You mean inflating the currency to hell has negative consequences? Shock.
sokoloff 4y ago
It cannot be the case that “all expenses” have grown faster than inflation (which is what real wages takes into account).
- swagasaurus-rex 4y ago
  All expenses have grown faster than wages, or wages have not kept up with inflation Either way its a pay drop.
  - rahimnathwani 4y ago
    GGP referred to 'real wages', and implied that they've increased.
  - vkou 4y ago
    > All expenses have grown faster than wages, or wages have not kept up with inflation Your expense is someone else's wage + a capitalist's profit margin. Expenses across the entire economy can only outgrow wages if someone's taking a bigger slice of profit off the top. When we talk about inflation, we always conflate the two, as if they are the same thing. They are not.
    - brewdad 4y ago
      > Expenses across the entire economy can only outgrow wages if someone's taking a bigger slice of profit off the top. Have you paid attention to the Delta between executive pay and that of general labor over the past 4 decades? This is exactly what has been happening.
  - gruez 4y ago
    > All expenses have grown faster than wages, or wages have not kept up with inflation Source? Even the famously wrong[1] productivity/wage gap graph from epi.org admits that wage has at least been growing in real terms. [1] https://old.reddit.com/r/badeconomics/comments/6rtoh4/productivity_pay_gap_in_epi_we_trust/ https://old.reddit.com/r/badeconomics/comments/6rtoh4/produc...
    - jessaustin 4y ago
      I've seen some pretty dumb arguments linked here but that one takes the cake. The EPI graph isn’t measuring productivity vs. pay, even for "typical workers"; it’s measuring wage inequality. Umm yes it is a problem that wages for the vast majority of workers have stagnated; the possibility that some CEOs have done well doesn't counteract that. Also if they don't like the particular figures that "EPI" used, maybe they would prefer the Fed's research that shows exactly the same phenomenon using different data sources? [0] Then there is some reference to Mankiw making some assumption about labor supply and demand being infinitely differentiable and continuous, as well as violating "Rule V" in the adjacent sidebar. Meanwhile the newly-constructed local Taco Bell has two employees, a closed dining room, and the drive-in queue starts on the road before the entrance to the parking lot. This is my shocked face, at Mankiw doing something dumb. Essentially, we should not see 40 year runs of compensation lagging productivity due to some outsized returns to shareholders. That would likely reveal a structural problem in the labor market, at least by my understanding. "This would be a bad thing and our system is perfect so this accusation of badness must be wrong!" OK, Pollyanna. It would be inconvenient if the increased market concentration we see in every industry has given the remaining firms greater pricing power both as buyers of labor and inputs and sellers of products, so let's assume that didn't happen even though this graph clearly shows it. Truth in advertising for this subreddit, it seems. Psychological commitment to the status quo yields unconvincing arguments plainly contradicted by public experience. [0] https://research.stlouisfed.org/publications/economic-synopses/2015/06/24/lagging-long-term-wage-growth/ https://research.stlouisfed.org/publications/economic-synops...
- samstave 4y ago
  Do "real wages" include exec bonuses in the maths? What about waste on MBAs? - I have MILLIONS of square feet of FAANG builds under my belt (including healthcare, which is never included in FAANG (but now that one of the hospitals I was designer of was purchased under the Zuck's name...)) should be included. I've made so many people more rich.
nxm 4y ago
But people still want and yell for “affordable housing”. Can’t have your cake and eat it too
- arcticbull 4y ago
  Affordable housing is just a zoning issue. The cost of construction is a tiny fraction of the cost of a new house in major metros. The cake you can't have and eat at the same time is: "I want affordable housing" and "I want my house to be a good investment."
  - loandbehold 4y ago
    That's not even remotely true. Cost of construction is typically 60 to 80% of the cost. In high cost of living areas land is more expensive but so are construction costs.
    - CydeWeys 4y ago
      There's no way. Most of the value of housing in expensive areas is the land itself, not the cost of the building.
      - SideQuark 4y ago
        Most houses aren't built where land is so expensive, so that's nearly irrelevant to the overall cost of housing in the US
      - loandbehold 4y ago
        You are wrong. For instance in Southern California the cost to build new house is around $350 per sqft. Building 2000 sqft house is around $700K. House like that may sell for around 1 million. So that would be 70% construction and 30% land.
        notch656c 4y ago
        How does that happen? For 700k I could hire 2 skilled persons and 5 undocumented immigrants to work an entire year. How long does it take to raise a house?

You mean inflating the currency to hell has negative consequences? Shock.

It cannot be the case that “all expenses” have grown faster than inflation (which is what real wages takes into account).

swagasaurus-rex 4y ago
All expenses have grown faster than wages, or wages have not kept up with inflation Either way its a pay drop.
- rahimnathwani 4y ago
  GGP referred to 'real wages', and implied that they've increased.
- vkou 4y ago
  > All expenses have grown faster than wages, or wages have not kept up with inflation Your expense is someone else's wage + a capitalist's profit margin. Expenses across the entire economy can only outgrow wages if someone's taking a bigger slice of profit off the top. When we talk about inflation, we always conflate the two, as if they are the same thing. They are not.
  - brewdad 4y ago
    > Expenses across the entire economy can only outgrow wages if someone's taking a bigger slice of profit off the top. Have you paid attention to the Delta between executive pay and that of general labor over the past 4 decades? This is exactly what has been happening.
- gruez 4y ago
  > All expenses have grown faster than wages, or wages have not kept up with inflation Source? Even the famously wrong[1] productivity/wage gap graph from epi.org admits that wage has at least been growing in real terms. [1] https://old.reddit.com/r/badeconomics/comments/6rtoh4/productivity_pay_gap_in_epi_we_trust/ https://old.reddit.com/r/badeconomics/comments/6rtoh4/produc...
  - jessaustin 4y ago
    I've seen some pretty dumb arguments linked here but that one takes the cake. The EPI graph isn’t measuring productivity vs. pay, even for "typical workers"; it’s measuring wage inequality. Umm yes it is a problem that wages for the vast majority of workers have stagnated; the possibility that some CEOs have done well doesn't counteract that. Also if they don't like the particular figures that "EPI" used, maybe they would prefer the Fed's research that shows exactly the same phenomenon using different data sources? [0] Then there is some reference to Mankiw making some assumption about labor supply and demand being infinitely differentiable and continuous, as well as violating "Rule V" in the adjacent sidebar. Meanwhile the newly-constructed local Taco Bell has two employees, a closed dining room, and the drive-in queue starts on the road before the entrance to the parking lot. This is my shocked face, at Mankiw doing something dumb. Essentially, we should not see 40 year runs of compensation lagging productivity due to some outsized returns to shareholders. That would likely reveal a structural problem in the labor market, at least by my understanding. "This would be a bad thing and our system is perfect so this accusation of badness must be wrong!" OK, Pollyanna. It would be inconvenient if the increased market concentration we see in every industry has given the remaining firms greater pricing power both as buyers of labor and inputs and sellers of products, so let's assume that didn't happen even though this graph clearly shows it. Truth in advertising for this subreddit, it seems. Psychological commitment to the status quo yields unconvincing arguments plainly contradicted by public experience. [0] https://research.stlouisfed.org/publications/economic-synopses/2015/06/24/lagging-long-term-wage-growth/ https://research.stlouisfed.org/publications/economic-synops...
samstave 4y ago
Do "real wages" include exec bonuses in the maths? What about waste on MBAs? - I have MILLIONS of square feet of FAANG builds under my belt (including healthcare, which is never included in FAANG (but now that one of the hospitals I was designer of was purchased under the Zuck's name...)) should be included. I've made so many people more rich.

nxm 4y ago

But people still want and yell for “affordable housing”. Can’t have your cake and eat it too

arcticbull 4y ago
Affordable housing is just a zoning issue. The cost of construction is a tiny fraction of the cost of a new house in major metros. The cake you can't have and eat at the same time is: "I want affordable housing" and "I want my house to be a good investment."
- loandbehold 4y ago
  That's not even remotely true. Cost of construction is typically 60 to 80% of the cost. In high cost of living areas land is more expensive but so are construction costs.
  - CydeWeys 4y ago
    There's no way. Most of the value of housing in expensive areas is the land itself, not the cost of the building.
    - SideQuark 4y ago
      Most houses aren't built where land is so expensive, so that's nearly irrelevant to the overall cost of housing in the US
    - loandbehold 4y ago
      You are wrong. For instance in Southern California the cost to build new house is around $350 per sqft. Building 2000 sqft house is around $700K. House like that may sell for around 1 million. So that would be 70% construction and 30% land.
      - notch656c 4y ago
        How does that happen? For 700k I could hire 2 skilled persons and 5 undocumented immigrants to work an entire year. How long does it take to raise a house?