View Single Post
Old 9th October 2019, 11:31 AM   #173
blutoski
Penultimate Amazing
 
blutoski's Avatar
 
Join Date: Jan 2006
Posts: 11,837
Originally Posted by kellyb View Post
I would imagine that's a matter of great debate. I don't think professor and doctor salaries have risen nearly enough to account for the bubble-like growth over inflation and over the rate of growth in other countries seen in health care and education.

I'd imagine relaxed lending standards combined with the tightening of bankruptcy laws account for the increase in education debt and costs. The "financialization" of the economy hits real estate, education, and healthcare the hardest. (aka, the FIRE economy)

See:
https://www.ft.com/content/27212742-...4-e0bdc13c3bef
Yes, this is a factor as well, but the reference to the Balumal Effect is that compensation is growing despite stagnated productivity. Luxury features in dorms is a way to rationalize it by shifting the product purchased from stagnating educational value to adding additional 'value added' elements to the educational 'experience'.



Originally Posted by kellyb View Post
In health care, it's probably primarily CEO as well as stockholder profits. Doctor pay is higher in the US compared to other countries, but it can only account for a fairly small percentage inflated costs in the US.
Just to clarify: the Balumal Effect would also apply to all a healthcare company's employees' compensation, not just the physicians. ie: CEOs, managers, directors, lawyers and other specialists. It's an attempt to explain why wages are compensated at a higher rate than expected when comparing against productivity.


Basically, I brought these up to show the charts that show growth in costs for these sectors which are arguably 'necessities' and hard for Americans to 'opt out of' ("I don't need a dwelling" is not really an option, which is why I put housing in the necessities bucket) have not only grown faster than mode/medium or minimum wage, but also have grown so large that they are now dominant wallet share of the citizen such that all the abstract "but you get so much more TV for $300" counterarguments come across as missing the forest for the trees.

My dad paid 15% of his 1966 single household income on housing for the 2500 square foot house in a quarter acre suburban lot with a swimming pool. My 30 year old coworker spends 50% of her and her husband's combined dual income on a 550 square foot condo that doesn't even have ensuite laundry. Who cares that a $200 TV is 25% less expensive than 50 years ago.
__________________
"Sometimes it's better to light a flamethrower than curse the darkness." - Terry Pratchett
blutoski is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top