Mmastodon BusinessEconomy first seen 8 h ago, last 30 min ago, peak #12
Economist Justin Wolfers flags money illusion in faculty pay rise
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 commenting on a two-percent faculty pay raise announced during an inflationary period, calling it an example of money illusion. He notes nobody pointed out the raise actually amounts to a cut in real wages, weakening purchasing power, admitting he did not speak up either. The anecdote is being shared as a lesson in how nominal raises can mask real losses.
Why now: Inflation remains a live concern, making examples of how people misjudge real versus nominal pay gains resonate.
Justin Wolfersfacultymoney illusion
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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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