01-14-2017, 12:59 PM
(01-14-2017, 11:46 AM)David Horn Wrote:(01-12-2017, 09:16 PM)Warren Dew Wrote:(01-12-2017, 01:08 AM)pbrower2a Wrote:(01-11-2017, 08:48 PM)Warren Dew Wrote: Out of curiosity, what policy changes do you think caused the labor market shifts in around 2000?
Politicians set policy. Politicians cannot stop some economic realities.
Capitalism is much more effective in creating opportunity where there are shortages. If multitudes want something new and expensive (like cars in the early part of the 20th century; wristwatches, refrigerators, radios, phonographs, televisions, personal computers, and video-game players at various times, then there are opportunities for capitalists. Once markets are saturated, the high prices and opportunities for both capitalists and manufacturing workers are gone. The economy then goes to replacement which makes a manufactured object a commodity instead of a big-ticket item.
I was asking because 2000 was around when there was a steep decline in manufacturing employment in the US, compensated by a rise in health care and certain other categories. The graph looked like what might result from a policy change, rather than economic changes, which are more continuous.
I agree with you that traditional manufacturing is not the future. I think the future is in services, and ideally our economic policies should promote the transition to services.
The first indication of discontinuity was the unlinking of productivity and median income gains. That happened ~1973 and the new trend lines continued up to the present.
Agreed. As I demonstrated in the 2016 election thread, the most likely cause of that discontinuity was uncapping of immigration so the owners could import as much labor as they needed without increasing wages. Incidentally this is more than a decade too early to reflect any Chinese inflluence on the situation.
The 2000 discontinuity is specifically in manufacturing, and is in number of jobs in that sector, not just wages. It's a different discontinuity.