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Maybe it has something to do with stagnant wages for 2 generations now.
Over the past 60 years, real hourly wages for production and nonsupervisory workers increased by around 19% (adjusted for inflation) from 1964 to 2020, according to data from the Bureau of Labor Statistics (BLS). That is labor's share of productivity increases.
You personally work in education - a field where there has been scant productivity increases over those 60 years (actually, education has experienced negative productivity growth). In broad strokes, those involved in an industry that does not see productivity growth will not see wage growth. Amazingly, despite zero or negative productivity growth, educational employees keep getting paid more.
Quote:
Originally Posted by redguard57
Stock market gains and things like that are enjoyed by a small percent of the population
Everyone with an IRA or 401K benefits. Everyone who participates in an employee stock ownership program benefits.
Everyone who invests benefits. That is the broad majority of the population.
Quote:
Originally Posted by redguard57
with the benefits maximized for those that already have a lot.
A small $10,000 portfolio invested in a US Total Market fund grew by over 4X over the past 20 years.
A larger $1,000,000 portfolio invested in a US Total Market fund grew by over 4X over the past 20 years.
[quote=moguldreamer;65042090]Over the past 60 years, real hourly wages for production and nonsupervisory workers increased by around 19% (adjusted for inflation) from 1964 to 2020, according to data from the Bureau of Labor Statistics (BLS). That is labor's share of productivity increases.
Quote:
You personally work in education - a field where there has been scant productivity increases over those 60 years (actually, education has experienced negative productivity growth). In broad strokes, those involved in an industry that does not see productivity growth will not see wage growth. Amazingly, despite zero or negative productivity growth, educational employees keep getting paid more.
Education suffers from Baumol's cost disease. No technology we apply makes human brains work faster. There's no way to increase productivity in that sense. We can't increase the speed of production because the human brain learns at a speed set by evolution. Rather, technology inputs only increase the costs while production rate is the same. If all we still used were chalkboards we could deliver it cheaper.
Baumol looked at the cost of playing a piece of music. If you are going to play Beethoven's 9th, there's no way to improve that production process. It takes 70 minutes. Period. The cost of the musicians goes up over time. Technology inputs can improve the sound quality but it adds to your cost.
Quote:
Everyone with an IRA or 401K benefits. Everyone who participates in an employee stock ownership program benefits.
Everyone who invests benefits. That is the broad majority of the population.
A small $10,000 portfolio invested in a US Total Market fund grew by over 4X over the past 20 years.
A larger $1,000,000 portfolio invested in a US Total Market fund grew by over 4X over the past 20 years.
The same 4X.
Which quite benefits the $1M guy!
Last I checked only 40% of workers have 401ks, and most of them have relatively small balances.
They are irrelevant here, since clearly this thread is of the "ask a question then argue with anyone who doesn't answer in the way you were hoping" category.
Quote:
Originally Posted by mysticaltyger
But don't expect the media to tell you this. They won't until after the crisis has already happened.
Yes there is a massive conspiracy among the hundreds of thousands of people in the media to hide the truth from the hapless Americans who aren't as clever as you to see the truth.
If we got out of the 2008 financial crisis why has the Federal reserve had to keep the rates at artificially low rates? Surely a thriving economy could survive rates reverting to the mean of 5%. No; this economy has only survived by cheap money.
If we got out of the 2008 financial crisis why has the Federal reserve had to keep the rates at artificially low rates? Surely a thriving economy could survive rates reverting to the mean of 5%. No; this economy has only survived by cheap money.
So now an economy in recession is defined as one having low interest rates, and a thriving economy is characterized by interest rates that have reverted to some historical mean?
So now an economy in recession is defined as one having low interest rates, and a thriving economy is characterized by interest rates that have reverted to some historical mean?
Hardly worth responding to this comment but I will anyways. Read up on how the federal reserve attempts to respond to economic conditions. If the economy is overheating they tend to raise interest rates. When the economy is faltering they reduce interest rates. Why have they kept interest rates so low for the past decade?
Heck, maybe I have it all wrong. Why don't you tell ME why the Federal reserve has kept interest rates at historical lows since 2009.
You personally work in education - a field where there has been scant productivity increases over those 60 years (actually, education has experienced negative productivity growth). In broad strokes, those involved in an industry that does not see productivity growth will not see wage growth. Amazingly, despite zero or negative productivity growth, educational employees keep getting paid more.
What has happened in education is the "raw materials" are harder to work with, so productivity has declined. US oil production declined in the 1980s through the 2010s because our supplies of extractable oil declined. You don't blame the roughnecks when the well runs dry, why blame teachers when more students are coming from single parent households, ESL households, and chaotic households?
Maybe ChatGPT is education's shale moment? Kids can't write, give em a machine that can write. One can dream. (I'm actually not optimistic; basically all the studies on educational interventions have shown that none of them work sans super-expensive governess-style tutoring. The pace of education is dictated by biology and culture.)
Also chiding teachers for being paid more despite falling productivity is not how labor markets work. There's only a correlation between value delivered and wages insofar as value delivered affects the supply of and demand for your kind of labor. There's a shortage of teachers that outpaces demand, so wages have risen.
Hardly worth responding to this comment but I will anyways. Read up on how the federal reserve attempts to respond to economic conditions. If the economy is overheating they tend to raise interest rates. When the economy is faltering they reduce interest rates. Why have they kept interest rates so low for the past decade?
Heck, maybe I have it all wrong. Why don't you tell ME why the Federal reserve has kept interest rates at historical lows since 2009.
Low interest rates and QE are the only thing that has kept the US economy afloat since the Great Recession.
Otherwise, deflation would be the result. Which frankly NEEDS to happen at this point, but the FED and Central Banks are totally against this happening.
Low interest rates and QE are the only thing that has kept the US economy afloat since the Great Recession.
Otherwise, deflation would be the result. Which frankly NEEDS to happen at this point, but the FED and Central Banks are totally against this happening.
I agree with you. Thinking about the post I replied to (lieqiang) it was a strawman argument. I never wrote that a "an economy in recession is defined as one having low interest rates, and a thriving economy is characterized by interest rates that have reverted to some historical mean"
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Hardly worth responding to this comment but I will anyways. Read up on how the federal reserve attempts to respond to economic conditions. If the economy is overheating they tend to raise interest rates. When the economy is faltering they reduce interest rates. Why have they kept interest rates so low for the past decade?
