For instance, who needs changes in equilibrium in order to make the best use of their time and energies? How could incremental forms of ownership assist the definitions of investment which currently exist? Do economies which also rely on energy production as a wealth component, feel "complete" in terms of work life balance? A visual in this regard might help, in terms of where wages in the U.S. have changed over the last decade. Is is fair to suggest that where dark blues exist, equilibrium needs little "help" from the time input of individuals? Hmm. From the related WSJ article:
Energy: When you see that dark blue running through the middle of the country, one of the big movers in that pay growth has been energy - oil and gas extraction and refining. In a sense, they make this map look "better" than it is, where the experience of many Americans is concerned.In some respects, the wealth improvements in the map are almost inverse, to where wage growth was associated in the U.S. for several decades. Think about the monetary implications, in that this seems to suggest a return to a commodity based vision of growth. But commodities serve as beginning points for wealth creation, in mature and complex economies.
Commodities can only go so far in monetary flows, to contribute to assets, incomes and services formation - all of which economies the world over, continue to rely on. What's more, increased wealth is not necessarily job formation. While I live in a primary oil production county, unemployment here among males ages 25 to 54 (according to this interactive map) is still at 22%. And of those gainfully employed, more homes in the area are increasingly being shared, by groups of individuals who otherwise would not make rent on their own.
Hence the recent decline in commodity prices such as oil is not quite the positive it might seem under different supply side circumstance. To be sure, there is nothing wrong with commodities as primary wealth formation. However, the fact that wage growth in general would decline in relation to commodity formation - particularly after the twentieth century promise of knowledge use - is somewhat disconcerting. As Scott Sumner points out in a recent post about America's recent industrial production boom: productivity - it's a great thing, and once again the U.S. has it in spades. But what is that telling us?? Scott continues:
Agriculture went through this in the late 19th century and early 20th century. And now it's manufacturing's turn.When one thinks of changes in income gains and losses at the WSJ link, it's not hard to see how the Fed has continued to downplay the human component since the Great Recession - mistaken though they are in doing so. What potential wealth have they yet to recognize? Productive time use options remain necessary, to maintain desirable economic complexity and keep knowledge applications central to economic activity.
Perhaps the fact that commodity prices are currently falling, also serves as a reminder that no central banker can really afford to forget what counts most. What might the economic oasis of the near future look like? With a little luck - it would include a newly empowered, inclusive and dynamic services sector.