(09-18-2019 02:03 PM)Owl 69/70/75 Wrote:  

(09-18-2019 01:45 PM)RiceLad15 Wrote:  

(09-18-2019 01:41 PM)Owl 69/70/75 Wrote:  

(09-18-2019 01:32 PM)RiceLad15 Wrote:  To your last three points - all valid points on why we shouldn't expect to see real wage growth similar to the years immediately following WWII. I'd point you to the FT article I sent for some analysis as to why we shouldn't be seeing the stagnation at the bottom while we see growth at the top.

Quote:So why is the economy not delivering? The answer lies, in large part, with the rise of rentier capitalism. In this case “rent” means rewards over and above those required to induce the desired supply of goods, services, land or labour. “Rentier capitalism” means an economy in which market and political power allows privileged individuals and businesses to extract a great deal of such rent from everybody else.

https://www.ft.com/content/5a8ab27e-d470...7ebd53ab77

I would invite you for once, for just once if that is your deal, to look at it from the point of view of the supply/investment side of the economy. If I'm on that side, my job is to maximize profits. That means, among other things, that if A is a lower-cost option than B, then I should usually go with A.
A lot of the wage stagnation is not so much because individual wages are stagnant as it is because the composition of the labor market is changing. More expensive workers are being replaced either by overseas workers (as jobs move offshore) or by robots or other AI applications.

Oh I totally get that - read the FT article, it talks about the influence of share prices and how they're affected by costs, in the general dampening of wages.
I don't see how me stating a problem (unless you're saying people generally having stagnant wages isn't a problem), is akin to not understanding why it has happened.

I'm saying it's a different problem from the one you are implying.

Let's say we have 100 workers making $40/hour and 100 workers making $10/hour. The average wage is $25/hour. Now let's say we increase everybody 10%, the $40/hour worker goes to $44, the $10/hour worker goes to $11, the overall average goes up 10% as well, to $27.50.

But suppose the composition of the labor force changes. Let's say 20 of the 100 jobs at $44/hour move to Germany, and we add 20 jobs at $11/hour. Now everybody at $44 and everybody at $11 got a 10% raise individually, but the average for the economy as a whole is [(80 x $44) + (120 x $11)]/200, or ($3520+$1320)/200=$4840/200=$24.20, so the average for the total population actually went down, even though each individual got a 10% raise.

As various economic incentives have caused us to move jobs overseas (and yes the $3/day third world country workers are a factor, but they are replacing the $10 workers, not the $40 workers) we get a dampening effect on wage growth. The solution IMO is to make the USA an economic Mecca for high-end jobs. But so far we are not doing that.

Not sure what you think that I'm implying with my statements, so it's hard for me to respond.

I agree with your thrust about trying to find ways to get companies to bring high-paying jobs to the US, as they have moved away because labor is an easy place to cut costs, and C-suite executives have a major incentive to cut costs.