[dd_roger]

The argument about increased productivity is a fallacy. Only the primary and secondary sectors have a long track record of increased productivity, in services on the other hands -which represent an ever growing share of the working population in western countries- productivity has been stagnating for multiple decades (in some industries it's actually receding, thankfully compensated by the few industries that have good growth).

[Barrin92]

not sure why this is downvoted. This is known as Baumol's cost disease. Policemen, school teachers, or painters today are no more (or barely more) productive than they were 50 or 100 years ago, yet their salaries have multiplied.

This is so because when salaries in productive industries start to rise every other sector also has to raise wages to attract any worker at all, which in turn raises prices. It's also why coffee is more expensive in Silicon Valley than in Podunk Idaho. It's not because baristas in California are more productive, it's because the region is richer and you can't buy your freshly brewed latte from China or India.