5 ms·

I think piketty would disagree. Productivity per worker has gone up but the share of profits going to workers has gone down. This is not some kind of inflatio

by lokar 3y ago

I think piketty would disagree. Productivity per worker has gone up but the share of profits going to workers has gone down. This is not some kind of inflation driven by scarcity.

mensetmanusman 3y ago
The ultra wealthy hired the best to win a game of financial manipulation that the rest of us didn’t even know was being played. The median salary would be six figure if the share of productivity gains was distributed like it was in 1970.
- adrianN 3y ago
  Is the average salary six figures?
  - 93po 3y ago
    No
  - idiotsecant 3y ago
    That's sort of a tricky question since most of the income and wealth of the upper crust of modern society is not expressed as a salary. The simple answer is no, but the fact that it's such a complex answer is itself indicative of a systemic problem.
  - eek2121 3y ago
    Salary != Wealth. There are billionaires that don’t make a single penny a year, and broke folks pulling in 6-7 figures. Looking at some type of combination of income + net worth is probably better in most cases. That being said, most folks in the US make less than $100,000/year and have less than a $100,000 net worth.
  - andruby 3y ago
    GDP per capita in the US is $80K [wikipedia] I assume it includes everyone regardless of age, so the average salary when only considering people working if probably $100K or above
- stevezsa8 3y ago
  I think focussing on salary alone isn't a great strategy. If you doubled everyone's salary, the gain would almost certainly be absorbed by real estate or some other necessity. Regulations on maximum working hours, access to fair housing, education, healthcare etc might work better.
  - jeffreyq 3y ago
    Can you further elaborate on why more government intervention would work better?
    - stevezsa8 3y ago
      There are valid arguments on both sides of the issue. What do you think would be the best way to help ensure everyone gets a fair share?
  - swagasaurus-rex 3y ago
    I agree with you that gains in income will be absorbed. Providers of necessities can demand large portions of people’s income due to lack of supply. It’s a basic monopoly. We see that in real estate, health care, education, elderly and child care. They can’t charge endlessly because at some point people are priced out. Homelessness, lack of education, delaying medical care until an emergency and relying on laws that non-payers cannot be denied treatment. But they can travel up the supply demand curve and take from everybody that can still afford it, because the supply is constrained. TVs are cheap, because of competition from overseas. Land or health care prices are not.
- andruby 3y ago
  GDP per capita is $80K in the US. I suspect this includes people of all ages, so if we distribute this only to working age, that’s probably close to $100K (six figures)
  - jiveturkey 3y ago
    GDP != salary. https://www.forbes.com/advisor/business/average-salary-by-age/ https://www.forbes.com/advisor/business/average-salary-by-ag... median wage at 45yo (the peak) is $64k.
    - andruby 3y ago
      I know. I’m an economist. The post was talking hypothetical if the gains were better distributed. GDP/capita is that maximum hypothetical number where the full gross domestic production is evenly distributed to all people.
      - jiveturkey 3y ago
        gotcha. that makes sense
CuriouslyC 3y ago
Except that with machines doing more of the on the job labor at the same time that women are entering the work force en-mass, there was more competition for fewer jobs which depressed wages.
- carlosjobim 3y ago
  There is always an infinite amount of jobs. Whenever too few people hoard too much wealth is when economic activity slows down and some jobs are no longer worth doing.
polynomial 3y ago
Of course not, it's driven by ability to pay. And while I'm not a professional economist it does seem that you are correct in that demand-pull based inflation (cost of goods) tends to only happen in periods of economic expansion, while cost-push inflation (size of money supply) tends to be the driver in slower times.

by lokar 3y ago

I think piketty would disagree. Productivity per worker has gone up but the share of profits going to workers has gone down. This is not some kind of inflation driven by scarcity.

mensetmanusman 3y ago

The ultra wealthy hired the best to win a game of financial manipulation that the rest of us didn’t even know was being played. The median salary would be six figure if the share of productivity gains was distributed like it was in 1970.

adrianN 3y ago
Is the average salary six figures?
- 93po 3y ago
  No
- idiotsecant 3y ago
  That's sort of a tricky question since most of the income and wealth of the upper crust of modern society is not expressed as a salary. The simple answer is no, but the fact that it's such a complex answer is itself indicative of a systemic problem.
- eek2121 3y ago
  Salary != Wealth. There are billionaires that don’t make a single penny a year, and broke folks pulling in 6-7 figures. Looking at some type of combination of income + net worth is probably better in most cases. That being said, most folks in the US make less than $100,000/year and have less than a $100,000 net worth.
- andruby 3y ago
  GDP per capita in the US is $80K [wikipedia] I assume it includes everyone regardless of age, so the average salary when only considering people working if probably $100K or above
stevezsa8 3y ago
I think focussing on salary alone isn't a great strategy. If you doubled everyone's salary, the gain would almost certainly be absorbed by real estate or some other necessity. Regulations on maximum working hours, access to fair housing, education, healthcare etc might work better.
- jeffreyq 3y ago
  Can you further elaborate on why more government intervention would work better?
  - stevezsa8 3y ago
    There are valid arguments on both sides of the issue. What do you think would be the best way to help ensure everyone gets a fair share?
- swagasaurus-rex 3y ago
  I agree with you that gains in income will be absorbed. Providers of necessities can demand large portions of people’s income due to lack of supply. It’s a basic monopoly. We see that in real estate, health care, education, elderly and child care. They can’t charge endlessly because at some point people are priced out. Homelessness, lack of education, delaying medical care until an emergency and relying on laws that non-payers cannot be denied treatment. But they can travel up the supply demand curve and take from everybody that can still afford it, because the supply is constrained. TVs are cheap, because of competition from overseas. Land or health care prices are not.
andruby 3y ago
GDP per capita is $80K in the US. I suspect this includes people of all ages, so if we distribute this only to working age, that’s probably close to $100K (six figures)
- jiveturkey 3y ago
  GDP != salary. https://www.forbes.com/advisor/business/average-salary-by-age/ https://www.forbes.com/advisor/business/average-salary-by-ag... median wage at 45yo (the peak) is $64k.
  - andruby 3y ago
    I know. I’m an economist. The post was talking hypothetical if the gains were better distributed. GDP/capita is that maximum hypothetical number where the full gross domestic production is evenly distributed to all people.
    - jiveturkey 3y ago
      gotcha. that makes sense

CuriouslyC 3y ago

Except that with machines doing more of the on the job labor at the same time that women are entering the work force en-mass, there was more competition for fewer jobs which depressed wages.

carlosjobim 3y ago
There is always an infinite amount of jobs. Whenever too few people hoard too much wealth is when economic activity slows down and some jobs are no longer worth doing.

polynomial 3y ago

Of course not, it's driven by ability to pay. And while I'm not a professional economist it does seem that you are correct in that demand-pull based inflation (cost of goods) tends to only happen in periods of economic expansion, while cost-push inflation (size of money supply) tends to be the driver in slower times.