Mmastodon BusinessEconomy first seen 5 h ago, last 4 h ago, peak #12
Economist Justin Wolfers highlights money illusion in pay debates
Original: Justin Wolfers on money illusion. Upon hearing of a two-percent faculty pay rise in an inflationary economy: "Nobody sto
Economist Justin Wolfers is discussing money illusion, the tendency to think in nominal rather than real terms. Reacting to a two-percent faculty pay rise announced during inflation, he noted nobody objected that the raise actually cut real wages and purchasing power, admitting he did not speak up either. The anecdote is prompting discussion about how easily workers overlook inflation when judging pay increases.
Why now: His candid admission that even economists fail to notice real wage cuts resonates amid ongoing inflation concerns.
Justin Wolfersmoney illusioninflation
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Evidence
- Justin Wolfers on money illusion. Upon hearing of a two-percent faculty pay rise in an inflationary economy: "Nobody stood up and said, 'Hang on, you're boasting about cutting our real wages and our ability to buy stuff.'" "I'll be honest: I didn't say it either. I'm an… · rationaldoge@hachyderm.io · 2
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