2. Lower the price to wholesalers by just enough to keep their profit per item sold the same. If the wholesalers and retailers did the same, the resulting price decrease, would benefit consumers, and increase sales, which would increase manufacturer, wholesaler and retailer profits. Workers would not be affected.
3. Leave the price unchanged, and increase worker pay just enough to restore the original labor cost per item.
In our current era, with effective labor unions in industry a quaint memory, I doubt that option 3 is exercised by any company that is not one of the minuscule number of worker-owned co-ops [1]. In general, we might reasonably assume a mix of options 1 and 2. To the extent that option 1 is used, workers, via job loss, are hurt by advances in technology. Where a major cost reduction leads to a major increase in sales of product, workers may benefit by an increase in job availability via option 2. However, in an era when American factories are being exported, and automation is cutting employment in the remaining factories, advances in technology, which is, in effect, owned by those with the big bucks, are far more likely to eliminate than to create jobs for Americans.
We should also take into account the fact that the virtual disappearance of effective labor unions means that workers have no means for preserving their jobs, or negotiating for reasonable compensation when they lose their jobs under circumstances resembling those sketched above. It is clear that advances in computer-related technology are often associated with automating work done by humans, and so eliminate jobs. The jobs eliminated by technology are often tedious, repetitive jobs--but not always. For example, work done by skilled machinists can often be automated, as can the work involved in the control of complex chemical manufacturing processes. Also, when many low-skill jobs are eliminated, such as those of many workers on automobile assembly lines, the supervisory, and personnel department jobs associated with those jobs are also eliminated. Often the work of engineers automates, not only work done by unskilled, semi-skilled, and skilled workers, but also some of the work done by other engineers, and so eliminates some engineering jobs as well.
Yet another factor hurting workers is the effect of modern technology in facilitating the transportation of goods over long distances. This makes profitable the export of factories to countries where workers are grossly underpaid and abused. And, of course, it also facilitates shipping various goods from low-wage countries to higher wage countries. In particular, American workers, particularly the least skilled, but also many skilled people, have lost their jobs or been forced to work for less pay.
It is hard to escape the conclusion that most advances in science and technology benefit the owners of companies, often at the expense of company employees, sometimes including the engineers and scientists responsible for the advances. There is no effective mechanism in our economic system that enables company employees to share in the benefits of advances in technology. On the contrary, as illustrated above, they are often victims of progress. The effects over the past half century are dramatic. For example, median inflation-adjusted real income for full-time male workers in the US was lower in 2016 than it was in the mid-1970s. This despite (often because of) major improvements in productivity resulting from technological progress [2].
Growing income inequality:
In 1970, the average income of chief executive officers (CEOs) was about 40 times that of the average pay of workers in their companies. In the 2000s this ratio soared to over 350 [3]. In 2009, the total wealth of the richest 400 Americans exceeded the total wealth of the poorest half of the population (about 150 million people) [4]. So most Americans benefited very little from the great advances in technology. Note also that very few, if any, of those who became super-rich were engineers or scientists whose ideas led to substantial advances benefiting society.
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