In order to ensure that this thread continues to meet TL standards and follows the proper guidelines, we will be enforcing the rules in the OP more strictly. Be sure to give them a re-read to refresh your memory! The vast majority of you are contributing in a healthy way, keep it up!
NOTE: When providing a source, explain why you feel it is relevant and what purpose it adds to the discussion if it's not obvious. Also take note that unsubstantiated tweets/posts meant only to rekindle old arguments can result in a mod action.
On January 06 2013 03:33 TheFrankOne wrote: "Beginning in the 1970s, economic growth slowed and the income gap widened. Income growth for households in the middle and lower parts of the distribution slowed sharply, while incomes at the top continued to grow strongly. The concentration of income at the very top of the distribution rose to levels last seen more than 80 years ago (during the “Roaring Twenties”)."
Glad to see a more progressive tax code. Most people haven't been seeing the same gains as the 90+ percentiles since the mid 70s. There are a variety of reasons for this apart from taxes but, the more unequal income is the more progressive the tax code should be IMO.
Sure (to an extent), but IMO the bigger problem isn't that the rich are getting richer - it's that the poor are not getting richer.
The poor in other countries are getting richer though.
A lot of our wounds regarding the poor are self inflicted. We've let poor performing schools get worse and created poverty traps.
At the other end we've worked really hard to create little enclaves of privilege. Big time bankers are too big to fail (get fired) and certain government employees get to fleece the taxpayers unchecked.
True, but you cannot honestly believe the majority of the rich will ever want live in the same neighborhood as your average Joe. Capital attraction is practically the 5th fundamental force of the universe, the rich tend to gravitate towards each other. They set up gated communities and top tier private schools for themselves, With this capital all going towards their areas it is natural that you would get areas that now lack the required capital and fall into poverty traps. The few hardworking individuals who do make it out of poverty though tend to themselves gravitate towards the other rich and simply bring their money into that area and the poor community never gets any richer.
I'm not following. I can see that being an issue for local property taxes but beyond that...
Is that not what you were on about with education. If I remember correctly schools get most of their funding from local property tax in the U.S. and as such having areas of high wealth individuals with good schools will naturally create a vacuum of capital around them where the schools are not nearly as good.
OK, though I'm not sure funding is the prime issue for education. I'm sure its an issue but is it the issue? My guess would be that poor communities (and by extension poorly funded schools) have existed for quite a while and yet my understanding is that the gap between good and bad schools has been growing. So there must be more at play than just funding.
If you or someone else has good info that funding is the main issue I'd gladly change my opinion here
"Americans believe a lack of financial support is the biggest problem currently facing public schools, according to the 44th annual Phil Delta Kappa International/Gallup poll of public attitudes toward public schools released Wednesday, but they also say that balancing the federal budget is more important than improving the quality of education.
Funding was by far the most pegged problem with 35 percent of those polled saying it is the biggest obstacle for public schools in their community. The next ranking problem was lack of discipline at 8 percent. At the same time, though, 60 percent said it is more important for the federal government to balance its checkbook over the next five years than improve the quality of public education, which earned 38 percent."
At least in terms of public polling Americans seem to believe funding to be the biggest issue.
But the public isn't always right.
I think funding is a contributor, but ultimately other factors play a huge role, like single parent households or households with 2 working parents. The latter obviously can be linked to median incomes not growing in 30 years.
On January 06 2013 03:33 TheFrankOne wrote: "Beginning in the 1970s, economic growth slowed and the income gap widened. Income growth for households in the middle and lower parts of the distribution slowed sharply, while incomes at the top continued to grow strongly. The concentration of income at the very top of the distribution rose to levels last seen more than 80 years ago (during the “Roaring Twenties”)."
Glad to see a more progressive tax code. Most people haven't been seeing the same gains as the 90+ percentiles since the mid 70s. There are a variety of reasons for this apart from taxes but, the more unequal income is the more progressive the tax code should be IMO.
Sure (to an extent), but IMO the bigger problem isn't that the rich are getting richer - it's that the poor are not getting richer.
The poor in other countries are getting richer though.
A lot of our wounds regarding the poor are self inflicted. We've let poor performing schools get worse and created poverty traps.
At the other end we've worked really hard to create little enclaves of privilege. Big time bankers are too big to fail (get fired) and certain government employees get to fleece the taxpayers unchecked.
True, but you cannot honestly believe the majority of the rich will ever want live in the same neighborhood as your average Joe. Capital attraction is practically the 5th fundamental force of the universe, the rich tend to gravitate towards each other. They set up gated communities and top tier private schools for themselves, With this capital all going towards their areas it is natural that you would get areas that now lack the required capital and fall into poverty traps. The few hardworking individuals who do make it out of poverty though tend to themselves gravitate towards the other rich and simply bring their money into that area and the poor community never gets any richer.
I'm not following. I can see that being an issue for local property taxes but beyond that...
Is that not what you were on about with education. If I remember correctly schools get most of their funding from local property tax in the U.S. and as such having areas of high wealth individuals with good schools will naturally create a vacuum of capital around them where the schools are not nearly as good.
OK, though I'm not sure funding is the prime issue for education. I'm sure its an issue but is it the issue? My guess would be that poor communities (and by extension poorly funded schools) have existed for quite a while and yet my understanding is that the gap between good and bad schools has been growing. So there must be more at play than just funding.
If you or someone else has good info that funding is the main issue I'd gladly change my opinion here
"Americans believe a lack of financial support is the biggest problem currently facing public schools, according to the 44th annual Phil Delta Kappa International/Gallup poll of public attitudes toward public schools released Wednesday, but they also say that balancing the federal budget is more important than improving the quality of education.
Funding was by far the most pegged problem with 35 percent of those polled saying it is the biggest obstacle for public schools in their community. The next ranking problem was lack of discipline at 8 percent. At the same time, though, 60 percent said it is more important for the federal government to balance its checkbook over the next five years than improve the quality of public education, which earned 38 percent."
At least in terms of public polling Americans seem to believe funding to be the biggest issue.
But the public isn't always right.
I think funding is a contributor, but ultimately other factors play a huge role, like single parent households or households with 2 working parents. The latter obviously can be linked to median incomes not growing in 30 years.
I am not an American student but as a student myself in the Canadian public system my biggest gripe is that they need to make school more interesting. In physics we have a great teacher who is enthusiastic and we get to do fun stuff like play around with a hover chair, and all the labs are very hands on and fun. As a result the class has a great average because people enjoy it and want to learn. If they could just make other classes more interesting I am sure kids would do better.
On January 06 2013 03:33 TheFrankOne wrote: "Beginning in the 1970s, economic growth slowed and the income gap widened. Income growth for households in the middle and lower parts of the distribution slowed sharply, while incomes at the top continued to grow strongly. The concentration of income at the very top of the distribution rose to levels last seen more than 80 years ago (during the “Roaring Twenties”)."
Glad to see a more progressive tax code. Most people haven't been seeing the same gains as the 90+ percentiles since the mid 70s. There are a variety of reasons for this apart from taxes but, the more unequal income is the more progressive the tax code should be IMO.
Sure (to an extent), but IMO the bigger problem isn't that the rich are getting richer - it's that the poor are not getting richer.
The poor in other countries are getting richer though.
A lot of our wounds regarding the poor are self inflicted. We've let poor performing schools get worse and created poverty traps.
At the other end we've worked really hard to create little enclaves of privilege. Big time bankers are too big to fail (get fired) and certain government employees get to fleece the taxpayers unchecked.
True, but you cannot honestly believe the majority of the rich will ever want live in the same neighborhood as your average Joe. Capital attraction is practically the 5th fundamental force of the universe, the rich tend to gravitate towards each other. They set up gated communities and top tier private schools for themselves, With this capital all going towards their areas it is natural that you would get areas that now lack the required capital and fall into poverty traps. The few hardworking individuals who do make it out of poverty though tend to themselves gravitate towards the other rich and simply bring their money into that area and the poor community never gets any richer.
I'm not following. I can see that being an issue for local property taxes but beyond that...
Oh, I think it's the story of everything, more or less. But then you should really just read this book:
Ex. Live in a relatively rich suburb and work in a relatively poor city. Residential property taxes will be paid to the suburb and commercial property taxes will be paid to the city.
This is called "avoiding social responsibility by pretending that there are such things as different places"
Does this graph take into account technological advances? I mean, wouldn't there be an increase in productivity if one went from chopping down trees with an axe to using a chainsaw? Does it take into account just the employees productivity, or the company's?
They are using this statistic to measure productivity from the Bureau of labor statistics
"The Major Sector Productivity program publishes quarterly and annual measures of output per hour and unit labor costs for the U.S. business, nonfarm business, and manufacturing sectors. These are the productivity statistics most often cited by the national media."
Which as far as I can tell does not seem to take into account technological advances. Does not change the fact people are getting more done but getting paid less for doing it.
By getting paid less for doing it, do you mean to say that the median income actually went down instead of up, as indicated on the chart? I'm a little confused as to what you're saying. I mean, I understand the difference that has grown, but it seems both lines are still going up.
However, think of it this way:
You have a village that the main business is chopping down trees. There's a 100 people in this village. Using axes, the company that employs people will demand a high number of jobs in order to sustain profit, much less revenue. When the advancement of chainsaws come around, the company no longer needs that many people to produce as much. This extra money can be used to raise pay, but just because they "produce" more doesn't mean their actually doing more work. One person is chopping with an axe for some number of hours while the other is sawing with a chainsaw.
The company has more public demand for jobs, meaning they have more power over the employees as technically, more people are able to be hired after the chainsaw layoff. The employees are not worth as much. (the litter to pick from grew larger.)
Does this graph take into account technological advances? I mean, wouldn't there be an increase in productivity if one went from chopping down trees with an axe to using a chainsaw? Does it take into account just the employees productivity, or the company's?
They are using this statistic to measure productivity from the Bureau of labor statistics
"The Major Sector Productivity program publishes quarterly and annual measures of output per hour and unit labor costs for the U.S. business, nonfarm business, and manufacturing sectors. These are the productivity statistics most often cited by the national media."
Which as far as I can tell does not seem to take into account technological advances. Does not change the fact people are getting more done but getting paid less for doing it.
By getting paid less for doing it, do you mean to say that the median income actually went down instead of up, as indicated on the chart? I'm a little confused as to what you're saying. I mean, I understand the difference that has grown, but it seems both lines are still going up.
However, think of it this way:
You have a village that the main business is chopping down trees. There's a 100 people in this village. Using axes, the company that employs people will demand a high number of jobs in order to sustain profit, much less revenue. When the advancement of chainsaws come around, the company no longer needs that many people to produce as much. This extra money can be used to raise pay, but just because they "produce" more doesn't mean their actually doing more work. One person is chopping with an axe for some number of hours while the other is sawing with a chainsaw.
The company has more public demand for jobs, meaning they have more power over the employees as technically, more people are able to be hired after the chainsaw layoff. The employees are not worth as much. (the litter to pick from grew larger.)
When I said paid less, I meant proportional to the amount of value they are producing, I think we all know who is benefiting from the increased productivity anyway.
Does this graph take into account technological advances? I mean, wouldn't there be an increase in productivity if one went from chopping down trees with an axe to using a chainsaw? Does it take into account just the employees productivity, or the company's?
They are using this statistic to measure productivity from the Bureau of labor statistics
"The Major Sector Productivity program publishes quarterly and annual measures of output per hour and unit labor costs for the U.S. business, nonfarm business, and manufacturing sectors. These are the productivity statistics most often cited by the national media."
Which as far as I can tell does not seem to take into account technological advances. Does not change the fact people are getting more done but getting paid less for doing it.
By getting paid less for doing it, do you mean to say that the median income actually went down instead of up, as indicated on the chart? I'm a little confused as to what you're saying. I mean, I understand the difference that has grown, but it seems both lines are still going up.
However, think of it this way:
You have a village that the main business is chopping down trees. There's a 100 people in this village. Using axes, the company that employs people will demand a high number of jobs in order to sustain profit, much less revenue. When the advancement of chainsaws come around, the company no longer needs that many people to produce as much. This extra money can be used to raise pay, but just because they "produce" more doesn't mean their actually doing more work. One person is chopping with an axe for some number of hours while the other is sawing with a chainsaw.
The company has more public demand for jobs, meaning they have more power over the employees as technically, more people are able to be hired after the chainsaw layoff. The employees are not worth as much. (the litter to pick from grew larger.)
When I said paid less, I meant proportional to the amount of value they are producing, I think we all know who is benefiting from the increased productivity anyway.
But do you see why they don't start getting paid more just because they are producing more when the number of jobs available goes down? They can fire someone if they fuck up, and just hire someone they laid off from the chainsaw layoff.
On January 06 2013 05:14 Sermokala wrote: Lol and here comes the marxist literature. Well done man well done.
Oh well, Marxism isn't any crazier than the Laissez-faire Capitalism that so many libertarians keep spouting so I don't see what the problem is. Other than the fact that so many in the U.S. support the crazy libertarians that is.
I would group the crazy libertarians in the same group as the marxists yes. They arn't apart of the republican party anymore so we don't have to show them any respect in turn. Like how democrats view the green party.
Actually the libertarian faction is gaining a lot of clout in the GOP. Not sure where you get your information from... It's going to be a moderate/libertarian control going forward, while conservatives slowly get pushed out.
If thats the truth then the GOP will be dead in a matter of decades. The tea party and libertarians have never and will never have a legitimate chance in any serious election. Thats the same type of faction that wants to oust the social conservative core of the party. Its going to be hard enough to have any sort of serious challenge in the next few decades with the tea party alienating minorities and women. I would like there to be an actual republican part in a civil discourse in this country.
Does this graph take into account technological advances? I mean, wouldn't there be an increase in productivity if one went from chopping down trees with an axe to using a chainsaw? Does it take into account just the employees productivity, or the company's?
They are using this statistic to measure productivity from the Bureau of labor statistics
"The Major Sector Productivity program publishes quarterly and annual measures of output per hour and unit labor costs for the U.S. business, nonfarm business, and manufacturing sectors. These are the productivity statistics most often cited by the national media."
Which as far as I can tell does not seem to take into account technological advances. Does not change the fact people are getting more done but getting paid less for doing it.
By getting paid less for doing it, do you mean to say that the median income actually went down instead of up, as indicated on the chart? I'm a little confused as to what you're saying. I mean, I understand the difference that has grown, but it seems both lines are still going up.
However, think of it this way:
You have a village that the main business is chopping down trees. There's a 100 people in this village. Using axes, the company that employs people will demand a high number of jobs in order to sustain profit, much less revenue. When the advancement of chainsaws come around, the company no longer needs that many people to produce as much. This extra money can be used to raise pay, but just because they "produce" more doesn't mean their actually doing more work. One person is chopping with an axe for some number of hours while the other is sawing with a chainsaw.
The company has more public demand for jobs, meaning they have more power over the employees as technically, more people are able to be hired after the chainsaw layoff. The employees are not worth as much. (the litter to pick from grew larger.)
When I said paid less, I meant proportional to the amount of value they are producing, I think we all know who is benefiting from the increased productivity anyway.
But do you see why they don't start getting paid more just because they are producing more when the number of jobs available goes down? They can fire someone if they fuck up, and just hire someone they laid off from the chainsaw layoff.
Yes I think I understand basic econ thank you very much. The question I am raising is more one of social responsibility, should corporations be required to give their employees a larger share of the gains when their productivity increases due to whatever factors or does the corporation get to keep it all. If we go way back to the Carnegie Steel days: "After a recent increase in profits by 60%, the company refused to raise worker's pay by more than 30%. When some of the workers demanded the full 60%, management locked the union out." we see that when a company made more money through whatever means the workers demanded their fair share of it. Of course the company refused and just like what happens today and we got this: "Afterwards, the company successfully resumed operations with non-union immigrant employees in place of the Homestead plant workers, and Carnegie returned to the United States. However, Carnegie's reputation was permanently damaged by the Homestead events." If we don't stop corporations abusing workers we are going to see a lot more social stratification, which at least in my opinion is not good.
I would just like to note I also think it is absurd that the employees wanted 60% pay raise but they should have met somewhere in the middle rather then get violent.
Does this graph take into account technological advances? I mean, wouldn't there be an increase in productivity if one went from chopping down trees with an axe to using a chainsaw? Does it take into account just the employees productivity, or the company's?
They are using this statistic to measure productivity from the Bureau of labor statistics
"The Major Sector Productivity program publishes quarterly and annual measures of output per hour and unit labor costs for the U.S. business, nonfarm business, and manufacturing sectors. These are the productivity statistics most often cited by the national media."
Which as far as I can tell does not seem to take into account technological advances. Does not change the fact people are getting more done but getting paid less for doing it.
By getting paid less for doing it, do you mean to say that the median income actually went down instead of up, as indicated on the chart? I'm a little confused as to what you're saying. I mean, I understand the difference that has grown, but it seems both lines are still going up.
However, think of it this way:
You have a village that the main business is chopping down trees. There's a 100 people in this village. Using axes, the company that employs people will demand a high number of jobs in order to sustain profit, much less revenue. When the advancement of chainsaws come around, the company no longer needs that many people to produce as much. This extra money can be used to raise pay, but just because they "produce" more doesn't mean their actually doing more work. One person is chopping with an axe for some number of hours while the other is sawing with a chainsaw.
The company has more public demand for jobs, meaning they have more power over the employees as technically, more people are able to be hired after the chainsaw layoff. The employees are not worth as much. (the litter to pick from grew larger.)
When I said paid less, I meant proportional to the amount of value they are producing, I think we all know who is benefiting from the increased productivity anyway.
But do you see why they don't start getting paid more just because they are producing more when the number of jobs available goes down? They can fire someone if they fuck up, and just hire someone they laid off from the chainsaw layoff.
Yes I think I understand basic econ thank you very much. The question I am raising is more one of social responsibility, should corporations be required to give their employees a larger share of the gains when their productivity increases due to whatever factors or does the corporation get to keep it all. If we go way back to the Carnegie Steel days: "After a recent increase in profits by 60%, the company refused to raise worker's pay by more than 30%. When some of the workers demanded the full 60%, management locked the union out." we see that when a company made more money through whatever means the workers demanded their fair share of it. Of course the company refused and just like what happens today and we got this: "Afterwards, the company successfully resumed operations with non-union immigrant employees in place of the Homestead plant workers, and Carnegie returned to the United States. However, Carnegie's reputation was permanently damaged by the Homestead events." If we don't stop corporations abusing workers we are going to see a lot more social stratification, which at least in my opinion is not good.
I would just like to note I also think it is absurd that the employees wanted 60% pay raise but they should have met somewhere in the middle rather then get violent.
Part of the difficulty with the example you give is the structure of both the pay raise and the profit rise. Profits are calculated before you pay the owners who need to get paid as well. Profits are also very volatile while wages are very sticky. Profits are up this year 60% but next year they could be down just as much while wages will likely keep whatever pay raise was instituted.
Does this graph take into account technological advances? I mean, wouldn't there be an increase in productivity if one went from chopping down trees with an axe to using a chainsaw? Does it take into account just the employees productivity, or the company's?
They are using this statistic to measure productivity from the Bureau of labor statistics
"The Major Sector Productivity program publishes quarterly and annual measures of output per hour and unit labor costs for the U.S. business, nonfarm business, and manufacturing sectors. These are the productivity statistics most often cited by the national media."
Which as far as I can tell does not seem to take into account technological advances. Does not change the fact people are getting more done but getting paid less for doing it.
By getting paid less for doing it, do you mean to say that the median income actually went down instead of up, as indicated on the chart? I'm a little confused as to what you're saying. I mean, I understand the difference that has grown, but it seems both lines are still going up.
However, think of it this way:
You have a village that the main business is chopping down trees. There's a 100 people in this village. Using axes, the company that employs people will demand a high number of jobs in order to sustain profit, much less revenue. When the advancement of chainsaws come around, the company no longer needs that many people to produce as much. This extra money can be used to raise pay, but just because they "produce" more doesn't mean their actually doing more work. One person is chopping with an axe for some number of hours while the other is sawing with a chainsaw.
The company has more public demand for jobs, meaning they have more power over the employees as technically, more people are able to be hired after the chainsaw layoff. The employees are not worth as much. (the litter to pick from grew larger.)
When I said paid less, I meant proportional to the amount of value they are producing, I think we all know who is benefiting from the increased productivity anyway.
But do you see why they don't start getting paid more just because they are producing more when the number of jobs available goes down? They can fire someone if they fuck up, and just hire someone they laid off from the chainsaw layoff.
Yes I think I understand basic econ thank you very much. The question I am raising is more one of social responsibility, should corporations be required to give their employees a larger share of the gains when their productivity increases due to whatever factors or does the corporation get to keep it all. If we go way back to the Carnegie Steel days: "After a recent increase in profits by 60%, the company refused to raise worker's pay by more than 30%. When some of the workers demanded the full 60%, management locked the union out." we see that when a company made more money through whatever means the workers demanded their fair share of it. Of course the company refused and just like what happens today and we got this: "Afterwards, the company successfully resumed operations with non-union immigrant employees in place of the Homestead plant workers, and Carnegie returned to the United States. However, Carnegie's reputation was permanently damaged by the Homestead events." If we don't stop corporations abusing workers we are going to see a lot more social stratification, which at least in my opinion is not good.
I would just like to note I also think it is absurd that the employees wanted 60% pay raise but they should have met somewhere in the middle rather then get violent.
Part of the difficulty with the example you give is the structure of both the pay raise and the profit rise. Profits are calculated before you pay the owners who need to get paid as well. Profits are also very volatile while wages are very sticky. Profits are up this year 60% but next year they could be down just as much while wages will likely keep whatever pay raise was instituted.
long term return on capital is pretty stable. capital will always make its share.
On January 06 2013 07:01 oneofthem wrote: but if wages rise it's inflation! the horror
Inflationary, not inflation.
well, there is this whole NAIRU idea that basically makes a policy imperative out of having unemployment. not very far from the idea of a reserve pool of labor that keeps wage down.
On January 06 2013 07:01 oneofthem wrote: but if wages rise it's inflation! the horror
Inflationary, not inflation.
well, there is this whole NAIRU idea that basically makes a policy imperative out of having unemployment. not very far from the idea of a reserve pool of labor that keeps wage down.
But in that circumstance wages are irrelevant. If wages rise $1 and prices rise $1 real wages have risen $0. Keeping wage price inflation in check does not mean keeping real wages in check.
For me personally I am surprised that Obama was able to get the Republicans to negotiate on the fiscal cliff deal at all. The Republicans (especially in the House) have shown very little interest in compromising on anything lately. I am hoping that their poor showing in the election (where they only kept the House, but lost ground in the Senate and didn't take the Presidency) will make them see the need to compromise and work together with Democrats more.
On January 06 2013 07:01 oneofthem wrote: but if wages rise it's inflation! the horror
Inflationary, not inflation.
well, there is this whole NAIRU idea that basically makes a policy imperative out of having unemployment. not very far from the idea of a reserve pool of labor that keeps wage down.
But in that circumstance wages are irrelevant. If wages rise $1 and prices rise $1 real wages have risen $0. Keeping wage price inflation in check does not mean keeping real wages in check.
having unemployment does mean less bargaining power for labor and less share of production value for labor, so real wage can be kept down.
On January 06 2013 07:27 Sumahi wrote: For me personally I am surprised that Obama was able to get the Republicans to negotiate on the fiscal cliff deal at all. The Republicans (especially in the House) have shown very little interest in compromising on anything lately. I am hoping that their poor showing in the election (where they only kept the House, but lost ground in the Senate and didn't take the Presidency) will make them see the need to compromise and work together with Democrats more.
Or emboldened that they were able to keep control of congress and with a perceived mandate of a divided government they will continue acting the same they did before.
On January 06 2013 07:01 oneofthem wrote: but if wages rise it's inflation! the horror
Inflationary, not inflation.
well, there is this whole NAIRU idea that basically makes a policy imperative out of having unemployment. not very far from the idea of a reserve pool of labor that keeps wage down.
But in that circumstance wages are irrelevant. If wages rise $1 and prices rise $1 real wages have risen $0. Keeping wage price inflation in check does not mean keeping real wages in check.
having unemployment does mean less bargaining power for labor and less share of production value for labor, so real wage can be kept down.
When unemployment is that high the policy is to bring unemployment down.
Some unemployment doesn't mean that real wages can be kept down. Too much unemployment does.
On January 06 2013 07:01 oneofthem wrote: but if wages rise it's inflation! the horror
Inflationary, not inflation.
well, there is this whole NAIRU idea that basically makes a policy imperative out of having unemployment. not very far from the idea of a reserve pool of labor that keeps wage down.
But in that circumstance wages are irrelevant. If wages rise $1 and prices rise $1 real wages have risen $0. Keeping wage price inflation in check does not mean keeping real wages in check.
having unemployment does mean less bargaining power for labor and less share of production value for labor, so real wage can be kept down.
When unemployment is that high the policy is to bring unemployment down.
Some unemployment doesn't mean that real wages can be kept down. Too much unemployment does.
Out of curiosity then, what in your opinion constitutes Too much unemployment?
On January 06 2013 07:01 oneofthem wrote: but if wages rise it's inflation! the horror
Inflationary, not inflation.
well, there is this whole NAIRU idea that basically makes a policy imperative out of having unemployment. not very far from the idea of a reserve pool of labor that keeps wage down.
But in that circumstance wages are irrelevant. If wages rise $1 and prices rise $1 real wages have risen $0. Keeping wage price inflation in check does not mean keeping real wages in check.
having unemployment does mean less bargaining power for labor and less share of production value for labor, so real wage can be kept down.
When unemployment is that high the policy is to bring unemployment down.
Some unemployment doesn't mean that real wages can be kept down. Too much unemployment does.
Out of curiosity then, what in your opinion constitutes Too much unemployment?
>5% is pretty standard. Around that and you are left with structural unemployment, more or less.
In other words you want enough jobs available for everyone that wants one and it just becomes a matter of matching the available worker to the available job.
EPT![[image loading]](http://www.cbpp.org/images/cms/11-28-11pov-f1.jpg)
![[image loading]](http://upload.wikimedia.org/wikipedia/commons/4/45/Productivity_and_Real_Median_Family_Income_Growth_1947-2009.png)
