Russ Roberts has an important post here that ties together a lot of different debates of late—Peter Thiel/Tyler Cowen’s Great Stagnation thesis, the Occupy/inequality complaints, and Charles Murray’s Coming Apart. Read it.
Friday, May 24, 2013
A different reason for the apparent stagnation is that a growing share of productivity gains is being diverted to health and other fringe benefits. This trade-off is most severe for the lowest wage workers. http://www.towerswatson.com/assets/pdf/5216/Towers-Watson-Treating_Ills-Executive_Summary.pdf Thus, even though real compensation may be rising for workers at all wage levels, measures that focus exclusively on worker pay will make it appear that wages are “stagnating” more for low-income workers than higher-income workers.