D
Deleted member 231381
Unconfirmed Member
Cost disease is relatively easily explained. Certain things are innately labour intensive - you can't achieve any efficiencies in the amount of labour you use. We can't now perform a Beethoven orchestra with one person; a teacher can't teach the same class five times faster than they did in 1960. This is super is super relevant to the sector I currently work in, social care - no matter how much better technology gets, a care worker is never going to be able to turn a half an hour call into two minutes. Bum-wiping doesn't have any technological breakthroughs on the horizon.
At the same time, other industries are seeing enormous technological progressions, and so labour has become vastly more productive than before thanks to all of these new technologies available. Productivity has soared, and so wages soar with it (to an extent, at least, although there's another story there).
But if wages remained the same in labour-intensive industries as they always had, nobody would work in them. Like, suppose being a teacher in 1800 paid 5 shillings and being a cloth-maker in 1800 paid 5 shillings. By 1850, a cloth-maker is 4 times as productive per person thanks to machiney, and accordingly gets paid 20 shillings. If you kept the teacher's salary the same, then... nobody would teach. They'd all shift to making cloth. So the increase in productivity in capital-intensive industries forces an increase in labour costs in labour-intensive industries, even though they're not any better than they used to be.
You can see that all of the industries affected by cost disease are of a nature similar to educating, or caring for people, or going to see the films. You can't really make them more efficient - I can't view a film four times faster than in 1980. A doctor's call that needs to take half an hour will always take approximately half an hour, you can't really get any more efficiencies in the time it takes to diagnose things.
Now, cost-disease shouldn't matter, because those costs are labour costs, so wages ought to be increasing in proportion to the costs, so in real terms, the proportion of wages spent on those goods ought to be remaining fixed. Cinema tickets might be, in real terms, four times more expensive than they were in your grandpa's day, but your wages, in real terms, ought to be four times higher than his. The reason they're not isn't because of cost disease, it's because starting in the 1980s, wages and productivity decoupled. That's the real story here.
At the same time, other industries are seeing enormous technological progressions, and so labour has become vastly more productive than before thanks to all of these new technologies available. Productivity has soared, and so wages soar with it (to an extent, at least, although there's another story there).
But if wages remained the same in labour-intensive industries as they always had, nobody would work in them. Like, suppose being a teacher in 1800 paid 5 shillings and being a cloth-maker in 1800 paid 5 shillings. By 1850, a cloth-maker is 4 times as productive per person thanks to machiney, and accordingly gets paid 20 shillings. If you kept the teacher's salary the same, then... nobody would teach. They'd all shift to making cloth. So the increase in productivity in capital-intensive industries forces an increase in labour costs in labour-intensive industries, even though they're not any better than they used to be.
You can see that all of the industries affected by cost disease are of a nature similar to educating, or caring for people, or going to see the films. You can't really make them more efficient - I can't view a film four times faster than in 1980. A doctor's call that needs to take half an hour will always take approximately half an hour, you can't really get any more efficiencies in the time it takes to diagnose things.
Now, cost-disease shouldn't matter, because those costs are labour costs, so wages ought to be increasing in proportion to the costs, so in real terms, the proportion of wages spent on those goods ought to be remaining fixed. Cinema tickets might be, in real terms, four times more expensive than they were in your grandpa's day, but your wages, in real terms, ought to be four times higher than his. The reason they're not isn't because of cost disease, it's because starting in the 1980s, wages and productivity decoupled. That's the real story here.
