What happened to wages?

[Lexicus]

You really need to reread this thread.

Don't tell him to do this, he'll notice the post where you typed this:

if you choose poorly, you have to shoulder some of the blame

 

[rah]

I stand by that statement. But with all the things I said around it. That you didn't repeat.
So you don't believe in personal responsibility? Everyone is blameless?

 

[Gorbles]

You really need to reread this thread.

shrugs

What can I say. I'm understanding of having to reply to so many different individual arguments in a single thread, as you've had to do, but you're going out of your way to not have an open discussion. Best of luck with it.

 

[uppi]

I would love to see stats that back up that claim.
I won't hold my breath.

I am going to refer to personal experience.

 

[Hygro]

Nah

Lol so if literally nobody trained we’d have the same wages and purchasing power.

 

[Lexicus]

Lol so if literally nobody trained we’d have the same wages and purchasing power.

At the aggregate level? Pretty much. I mean, not exactly sure what you mean by "trained" here but if we lacked any person qualified to do critical jobs that maintain society we'd quickly have bigger problems than low wages.

Just on the face of it though, this argument is silly. What we are talking about in this thread is a decreasing share of national income going to wages, while an increasing share goes to capital, a shorthand for things like stock dividends, asset appreciation, and rentier income. To argue that this problem can be solved by more people going into tech (or whatever is your preferred "hot" field, could be finance or estate law or a bunch of other things) is to fundamentally misunderstand the situation.

 

[Commodore]

What we are talking about in this thread is a decreasing share of national income going to wages, while an increasing share goes to capital, a shorthand for things like stock dividends, asset appreciation, and rentier income

Again, that still comes back to personal choices though. If wages aren't where the money is, then it doesn't make a whole lot of sense for people to continue to only rely on wages for income and avoid getting in on that sweet, sweet capital through investing. And I don't want to hear any of this BS about "people don't have the money to invest" either when there are apps out there that invest your spare change for you.

 

[Lexicus]

Again, that still comes back to personal choices though. If wages aren't where the money is, then it doesn't make a whole lot of sense for people to continue to only rely on wages for income and avoid getting in on that sweet, sweet capital through investing. And I don't want to hear any of this BS about "people don't have the money to invest" either when there are apps out there that invest your spare change for you.

Ah yes, that hallowed Boomer advice, honed from year to year: "just choose not to be poor lol"

But, more seriously, same problem applies. We can't all be rentiers. You are basically saying "just don't be the guy who gets screwed," which isn't a solution to the problem that someone is getting screwed.

 

[rah]

To argue that this problem can be solved by more people going into tech (or whatever is your preferred "hot" field, could be finance or estate law or a bunch of other things) is to fundamentally misunderstand the situation.

Has anyone here argued that? I certainly haven't. Could it help an individual, certainly.

 

[Commodore]

But, more seriously, same problem applies. We can't all be rentiers

But we can all be investors and modern technology makes it easier than ever to participate. So much so, that there really isn't any excuse for someone to not be investing something into their future. If you can afford a smartphone, you can afford to invest. Hell, one of the smartest things my brother did was borrow a little more than he actually needed for his student loans and invested the surplus. How many college students even think about doing something like that? Judging by how many don't have anything invested even well into their 30s, I'm guessing not many. And my brother is in his mid 30s, has his student loans paid off and has his own house flipping business that was initially funded by the returns on that student loan money he invested.

And that's the point I'm making. You aren't going to change the system. You just aren't. So the next best thing is to start finding ways to exploit the system to work in your favor. That's what I'm talking about with regards to personal choices. Maybe people would be a little more successful in life if they started thinking for themselves instead of just following the herd.

Ah yes, that hallowed Boomer advice, honed from year to year: "just choose not to be poor

Well, I'm not a Boomer and I'm not saying "just choose not to be poor". So you're 0 for 2 on that. Also, I will say it's funny that the younger generation are using that "Ok Boomer" crap to completely disregard the advice of an entire generation of people who have already gone through the struggles and draw from that wisdom, and then complain about how hard it is to succeed.

 

[Hygro]

At the aggregate level? Pretty much. I mean, not exactly sure what you mean by "trained" here but if we lacked any person qualified to do critical jobs that maintain society we'd quickly have bigger problems than low wages.

Though those bigger problems would also manifest as low wages. Conversely, if everyone made better personal choices, the opposite. This isn’t meaningless even in a conversation about the power of rentiers to capture any given year’s pie, year after year.

 

[Lexicus]

At least one person:

Better career choices cannot increase wages in the economy as a whole.

Of course they do.

Though those bigger problems would also manifest as low wages. Conversely, if everyone made better personal choices, the opposite. This isn’t meaningless even in a conversation about the power of rentiers to capture any given year’s pie, year after year.

Well, "better personal choices" is certainly vague enough that I can't really say this isn't true. But we are not talking about some nonspecific concept of personal improvement, we were talking about the proposition that people paid low wages are partially to blame for being paid low wages because they didn't choose to go into high-paying fields.

 

[rah]

Then quit pretending that I did.

 

[Hygro]

At least one person:





Well, "better personal choices" is certainly vague enough that I can't really say this isn't true. But we are not talking about some nonspecific concept of personal improvement, we were talking about the proposition that people paid low wages are partially to blame for being paid low wages because they didn't choose to go into high-paying fields.

I was. And if I had acted correctly in 2015 about the time I finally knew better I’d have created 4 years worth of useful things for others to build on.

It still necessitates a bargain, and a macro Bargain, but I sure wasn’t weighting labor’s position to my fullest potential working for $2.13 at the overstaffed restaurant.

So now my personal decision was weaker for Labor, Macro, on two fronts.

It counts. The lie is that it is sufficient. The other lie is that it is irrelevant. You’re fighting the first lie.

 

[Estebonrober]

https://www.businessinsider.com.au/...eet-stock-market-and-average-americans-2020-1

On Saturday, Representative Alexandria Ocasio-Cortez commented on a new high in the US stock market by saying that “the Dow soars, wages don’t. Inequality in a nutshell.”

Thought I might shake this topic up with a stock market wage comparison and the obligatory controversial AOC tweet! You're all very welcome for the fodder.

 

[rah]

I guess it's a great time to retire before the inevitable crash.

 

[Estebonrober]

I guess it's a great time to retire before the inevitable crash.

Hopefully I will be able to buy in at the inevitable bottom

 

[Hygro]

We know, for example that areas that see wage growth have specialized industries. You can see it both up top and coming from behind. Up top it’s more obvious: There’s investment in hardware tech (in this case first by government) in SF, firms grow, tech people move here, the companies win. They need software, they invest, the programmers move here, they win, then more virtuous cycle as they keep winning, attracting the labor, upgrading the labor (“human capital”) through the industrial process, attracting and making more capital, new firms start here because the people are here and new people are here because the firms are here. And wages rise. So does rent but not equally.

The same happens on the backend. It’s too expensive to replace functioning old capital so after tech makes the same type of industries more efficient it starts somewhere cheap. As the people move to the cities and learn to be industrial and the local engineers figure out more and new tech comes online to replace the next level of industry more efficiently they grow into that space as well.

Wages in this case also rise. Even in regimes that suppress wages.

 

[rah]

Many tech companies crashed an burned.

 

[El_Machinae]

That said, there can be fundamental market distortions that cause wage-seeking efforts to actually make things worse overall. The finance industry is a good example of this. There's very little value-add being done by most financial analysts, because all they're doing is looking at market trends and extrapolating them into the future. Oh, some formula or other, but very little price discovery per total dollar spent. And yet, more people keep going in.

It's not creating a bigger pie, because the cream is being skimmed off of the bottom. The money will be shuttled upwards. Everyone else is just contributing to the line that tells us the average, with advisor fees being the drain.

If the wage isn't a good signal, wage-seeking doesn't need to lead to improved aggregate growth. That said, the sum of better decisions is very much what can lead to an increase in mean. And it should, absent distortion.