The symbiotic relationship between increasing productivity and rising
wages began to dissolve in the 1970s. As
of 2013, a typical production worker
earned about 13% less than in 1973 (after adjusting for
inflation), even as worker productivity more
than doubled, over that same 40-year
span. In short, wages went down as worker productivity and the cost
of basics rose! But
why would the cost of basics rise if worker productivity doubled?! Somewhere in the system there must be a
whole lot of wasted effort, wasted production, or theft, or some combination of
all of those, if this puzzle is to be explained.
Obviously too much labor was being spent on the production of
superfluous goods and services and not enough was being spent on the production
of basics. But why was that choice made,
and by whom? Answer: It happened because there
were and are great profits to be made, by the owners of capital, from the production and
sale of ever increasing amounts of luxuries and the superfluous -- especially if
they can keep finding clever ways to keep driving wages down at the same time.
What most people don't yet realize is that these facts and statistics
represent an enormous theft from
America's working class, as perpetrated by our financial elite, who regularly purchase
members of congress for the purpose of continuing this ongoing and systematic
theft. With a compliant congress, union activity can
be minimized, the minimum wage can be kept down, programs like the CCC and WPA
can be prevented from reoccurring, a reduced workweek can be prevented, and wages &
educational opportunities can be minimized for most people. (As long as enough voters can be dumbed down,
in 3rd-rate schools, staffed by 3rd-rate teachers,
Republican TV advertising still has a chance of winning elections.)
Hard
evidence of this theft
On January 2, 2010, the
Washington Post reported that the first decade of the twenty-first century resulted in the creation of "no new jobs." This hasn't been true for any decade since
the Great Depression; indeed there has never been a postwar decade
that produced less than a 20% increase
in the number of available jobs. Even
the 1970s, a decade associated with stagflation and an energy crisis, generated
a 27% increase in jobs, as Robert Reich points out.
The lost decade of the 2000s is
especially astonishing when you consider that the US economy needs to create
roughly a million jobs each year just to keep up with the automatic growth in
the size of the workforce. (Noneconomics-types
should understand that the 'workforce' consists of all those people who are
ready and able to work, including all those currently employed.) In other words, during those first ten years
of this century, there were about 10 million missing jobs that would normally
have been created, but weren't, largely because advanced robots and new computer
applications were doing ever more of the available work.
Because of this huge and growing
amount of (real) unemployment, income inequality
has soared to levels not seen since 1929.
Why, exactly, did income inequality soar? It's
because the more people who must compete for a limited and ever smaller number
of jobs, the more that wages are driven downward by way of the increased
competition for jobs -- one more example of the old law of supply and
demand.
By this means, the share of
profits from rising productivity increases, which went into workers' pockets back in
the 1950s, . . began being retained almost entirely by business owners and
investors. And, make no mistake, this is
a form of theft. So, as a result of
this ongoing theft, the share of
overall national income going to labor [as opposed to capital(ists)], has fallen
precipitously, as Reich points out, and appears to be in continuing free fall. Our Goldilocks period is over, and the
American economy is moving into a new era --
the era of the steadily disappearing middle class. Meanwhile, big corporations have accumulated $2 trillion in cash that they really
don't know what to do with, other than hide it offshore to avoid paying their
fair share of taxes -- also using some of it to buy back shares in their
companies, so as to keep their respective stock prices up.
This
will be an era defined by a fundamental shift in the relationship between
workers and machines
And this shift will ultimately
challenge one of our most basic assumptions about technology, i.e. that machines are tools that
increase the productivity (and incomes) of workers.
Instead, the machines themselves are in
a very real sense turning into workers, i.e. 'workers' who replace human workers. As robots and computer applications do ever
more of the work, the dividing line between the capability of labor and the
capability of capital is blurring as never before. Why?
Because, to the extent that labor is done by machines and computer
programs, this kind of capital becomes
a form of labor, as it replaces ever more human labor.
All this progress is, of course,
being driven by the relentless acceleration in the sophistication and power of computer&information
technology. While many people are by now
familiar with Moore's Law (i.e. the well-established and empirically based rule
of thumb that says computing power roughly doubles every eighteen to
twenty-four months), . . not everyone has fully grasped or assimilated the political-economic implications
of this unprecedented, extraordinary, and exponential progress, . . which is
this:
We either need a shorter
workweek, OR a whole lot more
employment in the public sector of
our economy, so as to put to work all
those folks whose jobs are gradually being
replaced by robots, automation
and new computer applications -- or we need some combination of the two.
So,
without a whole lot more public sector employment and/or a shorter workweek (so
as to redistribute the shrinking amount of work among the ever growing number
of people needing decently paid work), what will happen
to American jobs, incomes, and wealth over the coming decade or two?"
Reich answers by amplifying and expanding on, and driving home, the answers and
explanations just provided, using examples like those that follow here. Human
workers will, to an ever larger extent, be
competing with, and be replaced by, a great multiplicity of things, like those
that follow here, the prototypes of which we are already familiar with, all of
which will be greatly improved and made more efficient and less costly as time
goes on: automated tellers, computerized cashiers, automatic
car washes, and robotized vending machines -- as well as personal computers
linked to television screens through which tomorrow's consumers will be able to
buy furniture, appliances, and all sorts of consumer electronics from their
living rooms, . . ever more easily examining
the merchandise from all angles, ever more easily selecting whatever color,
size, special features, and price seem most appealing, and then transmitting
the order instantly to warehouses, from which their selections will be shipped
directly to their homes. In other words,
Amazon will replace ever more department stores, shops, clerks and trips to the
mall. So, too, with financial
transactions, airline and hotel reservations, rental car agreements, and similar
contracts, which will all be executed between consumers in their homes, and
computer banks somewhere else on the globe, connected to us by satellite.
Perhaps as soon as ten years from
now, Reich says, Amazon will have wiped
out most of today's retail jobs, while self-driving cars, buses and trucks
will eliminate the need for a great many bus drivers, truck drivers, sanitation
workers, and even Uber drivers.
Even more alarming, we are now
faced not just with labor-replacing
technologies but with knowledge-replacing
technologies. The combination of
advanced sensors, voice recognition, artificial intelligence, big data,
text-mining, and pattern-recognition algorithms, is beginning to generate super-smart
robots capable of quickly learning human actions, and even learning from one another.
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