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forumposter123@protonmail.com's avatar

Most people associate "we are getting richer" with "I can afford the necessities of life easier."

Since they consider healthcare, education, childcare, etc to be necessities, it feels like a "disease" that they don't get any cheaper (in fact rise as a % of income).

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Cinna the Poet's avatar

I take it that the real insight of Baumol's point is not either of your two observations about supply and demand arithmetic. Rather it's the observation that productivity increases that reduce prices in one large sector of the economy will tend to *cause* demand (for labor) to outstrip productivity and raise prices in other sectors with more static productivity.

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