Hi, Alex, bro. Howdy?
I read your piece and have got a question for you.
You show productivity growth has been weak in industry, weaker than in services. Maybe this is because the industry demands more complex investments than the services sector. And complex investments depend a lot on good institutions and stable rules (which are soringly lacking), whereas service sector investments are less complex. This is what my other bro, Samuca, is saying (Acemoglu, which is not my bro because he is 100 times more intelligent and skilled than me told sort of the same story to explain the reverse of fortunes in the 1800s).
Right. But if productivity has been performing badly in industry, why the heck wages went up more than in services?? Tight labor mkts alone cannot account for that; it explains rising overall wages. You have to couple this with sth else...more organized labor? But does this explain wage growth differentials (instead of levels)?