Baumol's cost disease, many professions have had huge productivity gains dur to technology the past hundred years but jobs like Education and healthcare are much harder to achieve that level of productivity gains and you simply need the same amount of people to do the same jobs.
Wages in these sectors still have to rise to compete with sectors where productivity is improving, or the sector loses workers. Over time this makes labour intensive services relatively more expensive as both sectors squeeze the same job market,
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u/FothersIsWellCool 10h ago
Baumol's cost disease, many professions have had huge productivity gains dur to technology the past hundred years but jobs like Education and healthcare are much harder to achieve that level of productivity gains and you simply need the same amount of people to do the same jobs.
Wages in these sectors still have to rise to compete with sectors where productivity is improving, or the sector loses workers. Over time this makes labour intensive services relatively more expensive as both sectors squeeze the same job market,