2 ms·

I just think the term "Baumol's cost disease" may not be appropriate, as it seems much of the rise in wages in the childcare industry is due to minimum wage law

• blactuary 4y ago
  If that is the case that min wage laws are a major cause then it is definitely a case of baumol, because the wages would be increasing beyond the underlying productivity due to external factors. We expect wages to rise with gains in productivity, but the sectors of the economy that don't have any gains will necessarily increase along with the ones that do, because of labor market competition, minimum wage laws, etc. It puts a strain on those industries, just like we are seeing in child care