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> If you can make $30 an hour as a digital freelance marketer (a job that did not exist a generation ago), then you won’t accept less than that from working in food service. And if you can make $150 an hour installing HVAC for data centers, you’re not going to accept less from doing home AC service.

Plenty of people work jobs for less money because they enjoy the work more. I’m not sure if it’s worth reading what follows if most of the argument is predicated on this claim.


That might be true but that doesn't mean the effect is false in the aggregate. The classic example given in Baumol's paper was a violinist[1]. Sure, playing a violin might be more enjoyable than working in HVAC or churning out enterprise CRUD apps, and some people might even accept a paycut[2] to be a violinist, but that doesn't mean the effect isn't real. Despite zero productivity growth in being a concert violinist, wages for it has still risen, thanks to productivity growth elsewhere. People might be willing to take a pay cut to be a violinist, but not a arbitrarily large paycut.

[1] https://en.wikipedia.org/wiki/Baumol_effect

[2] https://en.wikipedia.org/wiki/Compensating_differential

I'm still amazed at how Baumol got his name on something already named [1].

[1]: https://en.wikipedia.org/wiki/Opportunity_cost

I would have made a different argument. Often the "instantaneous" wage is high, but you're never told the volume. The data center HVAC job will be done one day and you'll have to wait for another data center to be built and possibly even move there.

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