7 ms·

Gimme a good argument why good conditions should diminish, or deteriorate, despite the fact that workforce productivity, as well as corporate margins, have been

Gimme a good argument why good conditions should diminish, or deteriorate, despite the fact that workforce productivity, as well as corporate margins, have been growing steadily ever since.

kaashif 3y ago
I don't know whether they should or not, but it's clear that there was a very unusual set of conditions and it is unsurprising it didn't last forever, right or wrong.
- usrbinbash 3y ago
  On the contrary, it is VERY surprising these conditions didn't last, given that productivity only ever increased since then. If favorable, but short lived conditions were behind this sudden change, then it would affect the entire economic system, not just the workforce. How well people are off is a function of how many resources there are to go around. Since the end of WWII, these resources only ever increased. So did worker productivity, aka. the amount of resources produced per worker. So if people are worse off now, that leads to the very easy deduction that the fault lies in how these resources are distributed, not with a scarcity of the resources themselves. Or to put this another way: If the previously better conditions were just a fluke that couldn't be expected to last, how come that corporations seem to rake in ever more money as time goes on?
  - Aurornis 3y ago
    > How well people are off is a function of how many resources there are to go around. Since the end of WWII, these resources only ever increased. This is a very US-centric view. Demand for resources across the world has increased dramatically as everyone’s living standard increased. The situation isn’t going to make sense if you continue to ignore the rest of the world and try to understand the United States as if we lived in a perfectly isolated bubble.
    - usrbinbash 3y ago
      > Demand for resources across the world has increased dramatically as everyone’s living standard increased. As has productivity.
      - bayindirh 3y ago
        Increasing productivity brought is more complex goods, and they take longer to build. Hence, the throughput didn’t increase as much. Also some industries can barely keep up. We have seen this during the pandemic. “Chip crisis” is a great example.
  - fragmede 3y ago
    The Roman Empire's prosperity as the spoils of war are evident even to newest student of history. Why then is it surprising that the US also had some prosperity thanks to winning wars, and that there is none of that to be had if there aren't wars being won? Why is it expected that prosperity should last?
jl6 3y ago
It was only ever good conditions for some. If wealth redistributes faster than wealth grows, those some will experience loss while society at large experiences net gain.
- pokepim 3y ago
  [dead]
- eli_gottlieb 3y ago
  > If wealth redistributes faster than wealth grows And can we see this in any dataset, that the post-WW2 boom eventually gave more away in charity than it produced?
Aurornis 3y ago
If you look at average living conditions across the world, they did actually increase dramatically! This is what people miss about the conversation: That temporary period of brief prosperity was partially due to some of the relative differences across the world. Raising living standards across the world came at a small price of popping that bubble. Although median disposable income of Americans is still significantly higher than the rest of the world.
- jethro_tell 3y ago
  It's odd that this is the conversation when there was an extremely high top end tax and the government was taking that money and turning it into infrastructure and jobs. We saw this dream start to disappear as we un did those things in the name of freedom. Now, we produce more per capita than we ever did before and we get less of that pie as wages have stagnated and taxes go to corporate hand outs and entitlements (healthcare and social security), which are more or less a corporate hand out since they no longer provide pensions for people that work a life time for them. It's unclear to me why the conversation is centering better standards of living elsewhere as if we haven't added a couple billion people/consumers to the world in that time.
SideQuark 3y ago
Good conditions didn't diminish. People now buy vastly bigger and more things. Want to live on one salary like a 1950 person, with 1950 level goods, you can. Also more classes of people now have much better things: women, minorities. Labor is not the only input to productivity, so there is zero reason labor rewards should match productivity. As capital expenses increased to obtain modern productivity gains, the reward should go towards capital, which enabled purchase of upgrading tooling. Also as people demanded more rights and benefits, some is taken from wages. When you track total cost to employ, which is what an employer pays to have an employee, you can see all the gains. BLS tracks this and many other related variables (like wages, total remuneration, and a host of other costs and benefits employees have gained over the decades.) And corporate margins are pretty much the same as ever, net profit ~10% of revenue, since time immemorial. That 10% is what provides cushion so businesses don't implode every hiccup, leaving lots unemployed. [1] has some 1950-now data. There's plenty more places to find more. Fairly constant profit is why stock returns have averaged what they did over 100+ years. If now had vastly more profitable companies, it would have vastly increased returns. [1] https://cdn.pficdn.com/cms/pgim-fixed-income/sites/default/files/2021-04/The%20Evolution%20of%20U.S.%20Corporate%20Profits_2.pdf https://cdn.pficdn.com/cms/pgim-fixed-income/sites/default/f...
- deleted 3y ago
  [deleted]
- Turskarama 3y ago
  >Want to live on one salary like a 1950 person, with 1950 level goods, you can. No, you can't. People lived in smaller houses, but the vast majority of the increase of property values is _land_. If you want a house that's anywhere near as cheap as the average was 50 years ago, you get to live somewhere with no jobs. That is not equivalent. As for everything else, the majority of the modern day luxuries we enjoy amounts to a rounding error next to the actual necessities that people also had back then. Consumer electronics are _cheap_, not having them will not meaningfully increase anyones wealth.
  - SideQuark 3y ago
    The vast majority is not land. Here's [1] inflation adjusted land cost per acre over the last 50 years. Pick a piece of land at median 1950 sizes and the increase is around $500 in today's dollars. Now please cite why you claim the vast majority of the increase is land. Want to read what did increase? Houses got bigger as I stated [2]. [1] https://www.ers.usda.gov/webdocs/charts/55910/farmrealestatevalue2020_d.html?v=6230 https://www.ers.usda.gov/webdocs/charts/55910/farmrealestate... [2] https://www.supermoney.com/inflation-adjusted-home-prices/ https://www.supermoney.com/inflation-adjusted-home-prices/

Gimme a good argument why good conditions should diminish, or deteriorate, despite the fact that workforce productivity, as well as corporate margins, have been growing steadily ever since.

kaashif 3y ago

I don't know whether they should or not, but it's clear that there was a very unusual set of conditions and it is unsurprising it didn't last forever, right or wrong.

usrbinbash 3y ago
On the contrary, it is VERY surprising these conditions didn't last, given that productivity only ever increased since then. If favorable, but short lived conditions were behind this sudden change, then it would affect the entire economic system, not just the workforce. How well people are off is a function of how many resources there are to go around. Since the end of WWII, these resources only ever increased. So did worker productivity, aka. the amount of resources produced per worker. So if people are worse off now, that leads to the very easy deduction that the fault lies in how these resources are distributed, not with a scarcity of the resources themselves. Or to put this another way: If the previously better conditions were just a fluke that couldn't be expected to last, how come that corporations seem to rake in ever more money as time goes on?
- Aurornis 3y ago
  > How well people are off is a function of how many resources there are to go around. Since the end of WWII, these resources only ever increased. This is a very US-centric view. Demand for resources across the world has increased dramatically as everyone’s living standard increased. The situation isn’t going to make sense if you continue to ignore the rest of the world and try to understand the United States as if we lived in a perfectly isolated bubble.
  - usrbinbash 3y ago
    > Demand for resources across the world has increased dramatically as everyone’s living standard increased. As has productivity.
    - bayindirh 3y ago
      Increasing productivity brought is more complex goods, and they take longer to build. Hence, the throughput didn’t increase as much. Also some industries can barely keep up. We have seen this during the pandemic. “Chip crisis” is a great example.
- fragmede 3y ago
  The Roman Empire's prosperity as the spoils of war are evident even to newest student of history. Why then is it surprising that the US also had some prosperity thanks to winning wars, and that there is none of that to be had if there aren't wars being won? Why is it expected that prosperity should last?

jl6 3y ago

It was only ever good conditions for some. If wealth redistributes faster than wealth grows, those some will experience loss while society at large experiences net gain.

pokepim 3y ago
[dead]
eli_gottlieb 3y ago
> If wealth redistributes faster than wealth grows And can we see this in any dataset, that the post-WW2 boom eventually gave more away in charity than it produced?

Aurornis 3y ago

If you look at average living conditions across the world, they did actually increase dramatically! This is what people miss about the conversation: That temporary period of brief prosperity was partially due to some of the relative differences across the world. Raising living standards across the world came at a small price of popping that bubble. Although median disposable income of Americans is still significantly higher than the rest of the world.

jethro_tell 3y ago
It's odd that this is the conversation when there was an extremely high top end tax and the government was taking that money and turning it into infrastructure and jobs. We saw this dream start to disappear as we un did those things in the name of freedom. Now, we produce more per capita than we ever did before and we get less of that pie as wages have stagnated and taxes go to corporate hand outs and entitlements (healthcare and social security), which are more or less a corporate hand out since they no longer provide pensions for people that work a life time for them. It's unclear to me why the conversation is centering better standards of living elsewhere as if we haven't added a couple billion people/consumers to the world in that time.

SideQuark 3y ago

Good conditions didn't diminish. People now buy vastly bigger and more things. Want to live on one salary like a 1950 person, with 1950 level goods, you can. Also more classes of people now have much better things: women, minorities. Labor is not the only input to productivity, so there is zero reason labor rewards should match productivity. As capital expenses increased to obtain modern productivity gains, the reward should go towards capital, which enabled purchase of upgrading tooling. Also as people demanded more rights and benefits, some is taken from wages. When you track total cost to employ, which is what an employer pays to have an employee, you can see all the gains. BLS tracks this and many other related variables (like wages, total remuneration, and a host of other costs and benefits employees have gained over the decades.) And corporate margins are pretty much the same as ever, net profit ~10% of revenue, since time immemorial. That 10% is what provides cushion so businesses don't implode every hiccup, leaving lots unemployed. [1] has some 1950-now data. There's plenty more places to find more. Fairly constant profit is why stock returns have averaged what they did over 100+ years. If now had vastly more profitable companies, it would have vastly increased returns. [1] https://cdn.pficdn.com/cms/pgim-fixed-income/sites/default/files/2021-04/The%20Evolution%20of%20U.S.%20Corporate%20Profits_2.pdf https://cdn.pficdn.com/cms/pgim-fixed-income/sites/default/f...

deleted 3y ago
[deleted]
Turskarama 3y ago
>Want to live on one salary like a 1950 person, with 1950 level goods, you can. No, you can't. People lived in smaller houses, but the vast majority of the increase of property values is _land_. If you want a house that's anywhere near as cheap as the average was 50 years ago, you get to live somewhere with no jobs. That is not equivalent. As for everything else, the majority of the modern day luxuries we enjoy amounts to a rounding error next to the actual necessities that people also had back then. Consumer electronics are _cheap_, not having them will not meaningfully increase anyones wealth.
- SideQuark 3y ago
  The vast majority is not land. Here's [1] inflation adjusted land cost per acre over the last 50 years. Pick a piece of land at median 1950 sizes and the increase is around $500 in today's dollars. Now please cite why you claim the vast majority of the increase is land. Want to read what did increase? Houses got bigger as I stated [2]. [1] https://www.ers.usda.gov/webdocs/charts/55910/farmrealestatevalue2020_d.html?v=6230 https://www.ers.usda.gov/webdocs/charts/55910/farmrealestate... [2] https://www.supermoney.com/inflation-adjusted-home-prices/ https://www.supermoney.com/inflation-adjusted-home-prices/