Economics Scholarly Failure

Excuse me, I have to quickly outsmart all of economics here. (Again, this is to to economics' shame, not my credit.) When I see the word 'puzzling' I attribute it to self-inflicted stupidity. This was indeed the case this time.

both employment and wages fall due to decreased demand.

Technology increases productivity, which causes deflation, effectively increasing wages. Since I'm not all of economics I can't get exact numbers, but it will be close to parity, netting no change in wages. Further, demand for raw materials actually increases. Employment only falls short term, because the market gets further away from equilibrium, temporarily.

This explanation may help us understand why we see steep declines in employment while wages remain steady

Mainstream economics exists to glorify what its paymasters wanted to do anyway. This means it's their job to not understand how a minimum wage works.

It's obvious now I've said 'minimum wage,' right? If wages must fall, but can't, you get unemployment, while wages remain steady.

Wages remain steady because there's a status cline that overrides wage compression. Have to pay the not-janitor a set percentage more than the janitor. If market wages fall below that for the not-janitor, since the market can't lower the janitor's wage, the market responds with rationing, which is equivalent to unemployment in this case. Specifically, it can only hire not-janitors with above-previous-average productivity, who are willing to work for less than their market wage. If humans weren't slow and stupid, minimum wages would entirely eliminate non-minimum-wage jobs at any point wages are falling.

But the quoted combination could happen anyway. Technological unemployment: wages down, productivity up:wages up. So, wages: no change, but unemployment.

None of this is to say that I don't think better productivity wouldn't cause leisure to substitute for employment. Further, that's a good thing. However, it raises another government boondoggle, which is regulatory overhead. The overhead for a half-time worker isn't half as big as a full-time worker. But, at the same time, hours over 40 cost 50% extra on the margin. Ergo, all wage employees must work exactly 40 hours, absent very strong contrary factors. All salary workers must work as much as they can be convinced to amortize their regulatory overhead. (On top of it already being a good deal for the employer.)

When there's less work, because more productivity, employers fire someone rather than reduce time worked, and thus wages. Or, the salaried worker works less for the same pay.

Right now, I’m gathering facts about the possible mechanisms at play, beginning with a hard look at time-use by young men with less than a four-year degree.

Viciousness in the population must be at fault, because our rulers are virtuous, not vicious. Everything they do is anointed.

I am currently working to document this phenomenon, but there is a real challenge in determining what the right policy response might be to address the underlying issues.

Boy, demonstrating the whiteness of black sure is tough.