Economics & Finance
Baumol's Cost Disease
In labor-intensive service sectors with stagnant productivity gains—such as healthcare, education, and live performance—wages must rise in line with high-productivity industries due to competition for talent in unified labor markets. This forces the real cost of these services to climb structurally over time, not because quality improves, but as an inevitable consequence of productivity remaining flat.
Read the daily articles behind this idea on the Chinese edition.