Thursday, July 07, 2005

Isaac is right...

...in his post below. The Paul I *meant* to quote was from his classic essay "Ricardo's Difficult Idea." Of course if I had quoted his bit about productivity from that article I would have seen this:
Non-economists typically think that wages should reflect productivity at the level of the individual company. So if Xerox manages to increase its productivity 20 percent, it should raise the wages it pays by the same amount; if overall manufacturing productivity has risen 30 percent, the real wages of manufacturing workers should have risen 30 percent, even if service productivity has been stagnant; if this doesn't happen, it is a sign that something has gone wrong. In other words, my criticism of Michael Lind would baffle many non-economists.
His point is that productivity and real wages are connected in the whole economy, but not necessarily at the firm or industry level. Clearly, I am one of the non-economists that he is talking about.

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Anonymous Jason Kessler said...

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10:15 PM  

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