Weekly I/O #20
Baumol’s Cost Disease, No Phone, Repeated Mistakes, Two Ways to Categorize, Elephant Gym
Weekly I/O is a project where I share my learning Input/Output. Every Sunday, I write an email newsletter with five things I discovered and learned that week.
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The below is extracted from the email sent on Apr 18, 2021
Here’s a list of what I’m exploring and pondering this week.
1. Baumol’s cost disease: Why prices of labor-intensive services keep going up regardless of low productivity growth?
Baumol’s cost disease is a phenomenon pointed out by the economist William Baumol. While rising wages are typically attributed to the growth in labor productivity, there can be upward salary pressure at jobs without significant productivity growth. This can be used to further explain why services become more expensive than goods over time (see the figure from Wikipedia).
The rise of wages in jobs without productivity gains derives from the requirement to compete for employees with jobs that have experienced productivity growth and therefore can pay higher salaries. In other words, even in areas where productivity has not been improved, the compensation of its employees will still increase due to the improvement in productivity in other industries.
The example Baumol gave is that if the musicians in a string quartet were paid less than the assembly workers in the semiconductor company, they might decide to quit to get a job in the semiconductor company. However, because the quartet needs its musicians as much as a semiconductor company needs assembly workers, the group must raise wages to keep the talent. Therefore, even though there’s no productivity growth for the musicians, they still get better wages thanks to the productivity growth for the semiconductor industry.
Even though the phenomenon may not be obvious and kind of unintuitive, this theory is widely supported by economists according to an evaluation from Chicago Booth’s Initiative on Global Markets. When the responses are weighted by how confident the experts’ are in their responses, 88 percent agree with the statement that “rising productivity in manufacturing leads the cost of labor-intensive services — such as education and health care — to rise.”
2. The No Phone On Bed Rule.
Just want to share that one of the best decisions I made this year is that I decided to not use my phone on my bed anymore. This little rule turned out to be pretty good for me in many aspects and now I won’t have the chance to resent myself for falling asleep unintentionally by using my phone on the bed.
3. “A mistake repeated more than once is a decision.” — Paulo Coelho
This also reminded me that an accident that happened more than once should be fixed or regulated by the system.
4. “Most events in life can be categorized in one of two ways: a good time, or a good story” — Margot Leitman
5. Elephant Gym on Audiotree Live (Full Session)
Elephant Gym is an instrumental math rock trio based in Taiwan. Influenced by several Japanese math rock and post rock bands like Toe, LITE, and Tricot (they also performed a live session on Audiotree), Elephant Gym’s music is known for its bass-driven melodies and irregular rhythms. In this session, the emotion they put in the performance along with the great audio engineering from Audiotree was really beautiful.
Math rock is a niche style of indie rock influenced by post rock and progressive rock built on atypical rhythmic structures and time signatures. It’s characterized by mostly unpredictable courses, which include dissonant chords, hard stops, angular melodies, and general irregularity. Some people described this genre as organized chaos.
Some other math rock bands I really love include tfvsjs, Delta Sleep, Tide/edit, Toe, Tricot, TTNG, Giraffes? Giraffes!, rega.
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