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 Via ANCAPS: Why we need more markets and less government

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Via ANCAPS: Why we need more markets and less government Vide
PostSubject: Via ANCAPS: Why we need more markets and less government   Via ANCAPS: Why we need more markets and less government Icon_minitimeMon Mar 28, 2011 1:15 am
Tyler’s got the abstract to a paper which shows why middle incomes have been stagnating (well, not rising very fast) and here’s, to me, the money ‘graph:

On the nontradable side, government and health care are the largest employers and provided the largest increments (an additional 10.4 million jobs) over the past two decades…..(…)….A related set of challenges concerns the income distribution; almost all incremental employment has occurred in the nontradable sector, which has experienced much slower growth in value added per employee. Because that number is highly correlated with income, it goes a long way to explain the stagnation of wages across large segments of the workforce.

So, that last sentence is really only a restatement of something Paul Krugman says in Ricardo’s Difficult Idea (I mention this just to show that this is not a right wing, neoliberal or even libertarian idea), that average wages in an economy are determined by average productivity in that economy.

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