6 ms·

Can this all be explained by the cost of labor being uniform (since humans are humans in all industries)? So if one industry demands more labor, all others wil

Can this all be explained by the cost of labor being uniform (since humans are humans in all industries)? So if one industry demands more labor, all others will feel the rising price of labor?

smallnamespace 6y ago
The cost of labor is far from uniform. A FAANG employee's labor is higher than a Uber driver's, driven by both supply (most people can drive an Uber) and demand (FAANG companies make a lot of money, something like >$1mm per engineer). But getting back to the article, it only looks at the productivity of industries (which speaks to demand for certain types of labor), but the cost of training, say, a string quartet musician hasn't markedly decreased since the cost of education also hasn't fallen much.
- jhardy54 6y ago
  That depends how you measure costs. As a human, working for a for-profit tech company for 8 hours coats approximately the same amount of energy / effort as volunteering for a non-profit tech company, but it costs the organization vastly different amounts of money.
- joe_the_user 6y ago
  If we talk about a highly skilled programmer requiring a lot of labor to produce, then we talk about something like "amortized labor" having uniform cost (the article mentions that it takes a lot of labor produce an orchestra player, for example). Even if some people are more skilled than other, if it takes a lot of labor to figure out who's really talented, you can price things this way.
neilwilson 6y ago
It can be explained if you cost things in hours rather than money. As we improve technology fewer and fewer hours are required to create an item. But a violin concerto takes the same amount of human time. Which then leads to the conclusion that we really exchange time when trading. Each of us only has a finite amount of time after all.
opportune 6y ago
Kind of, but that's a roundabout way of saying "opportunity cost".

Can this all be explained by the cost of labor being uniform (since humans are humans in all industries)? So if one industry demands more labor, all others will feel the rising price of labor?

smallnamespace 6y ago

The cost of labor is far from uniform. A FAANG employee's labor is higher than a Uber driver's, driven by both supply (most people can drive an Uber) and demand (FAANG companies make a lot of money, something like >$1mm per engineer). But getting back to the article, it only looks at the productivity of industries (which speaks to demand for certain types of labor), but the cost of training, say, a string quartet musician hasn't markedly decreased since the cost of education also hasn't fallen much.

jhardy54 6y ago
That depends how you measure costs. As a human, working for a for-profit tech company for 8 hours coats approximately the same amount of energy / effort as volunteering for a non-profit tech company, but it costs the organization vastly different amounts of money.
joe_the_user 6y ago
If we talk about a highly skilled programmer requiring a lot of labor to produce, then we talk about something like "amortized labor" having uniform cost (the article mentions that it takes a lot of labor produce an orchestra player, for example). Even if some people are more skilled than other, if it takes a lot of labor to figure out who's really talented, you can price things this way.

neilwilson 6y ago

It can be explained if you cost things in hours rather than money. As we improve technology fewer and fewer hours are required to create an item. But a violin concerto takes the same amount of human time. Which then leads to the conclusion that we really exchange time when trading. Each of us only has a finite amount of time after all.

opportune 6y ago

Kind of, but that's a roundabout way of saying "opportunity cost".