Digital Revolution Will Kill Jobs, Inflame Social Unrest, Says Gartner 754
dcblogs writes "Gartner says new technologies are decreasing jobs. In the industrial revolution — and revolutions since — there was an invigoration of jobs. For instance, assembly lines for cars led to a vast infrastructure that could support mass production giving rise to everything from car dealers to road building and utility expansion into new suburban areas. But the "digital industrial revolution" is not following the same path. "What we're seeing is a decline in the overall number of people required to do a job," said Daryl Plummer, a Gartner analyst at the research firm's Symposium ITxpo. Plummer points to a company like Kodak, which once employed 130,000, versus Instagram's 13. The analyst believes social unrest movements, similar to Occupy Wall Street, will emerge again by 2014 as the job creation problem deepens." Isn't "decline in the overall number of people required to do a job" precisely what assembly lines effect, even if some job categories as a result require fewer humans? We recently posted a contrary analysis arguing that the Luddites are wrong.
Wages as share of GDP dropping since 1972 (Score:5, Insightful)
Yet stock market valuations increase, concentrating wealth in a lucky few.
Why can't companies pay better wages?
Wal-Mart increasing their wages to $12/hr. would increase their average item price by 1.1% --- perhaps then their workers could occasionally afford to shop somewhere else, or eat out at somewhere other than McDonald's.
Kodak vs Instagram? Really? (Score:5, Insightful)
Hard to say. (Score:5, Insightful)
Something that makes tech a little different, esp when it comes to software, is the near zero cost of reproduction. If industrial revolution Ford got double the orders for cars it would not only require more assembly lines but part suppliers would need to ramp up as would production of raw materials. If Microsoft's demand for MSOffice doubles, they might need a bit more bandwidth but there is no real spiderweb of increased jobs. They just allow more downloads or print more copies.
Re:Wages as share of GDP dropping since 1972 (Score:4, Insightful)
You can afford to pay $12 for a box of cereal. Be honest. You could do it.
Why don't you?
Labor is a market, just like any market. The work that unskilled people do in a non-skill-requiring job is worth a certain amount. That dollar amount is the intersection of [whatever a company is willing to pay] and [whatever those people are willing to work for].
You can start a company, pay people whatever you think is fair. That is your right.
Re:Wages as share of GDP dropping since 1972 (Score:5, Insightful)
Why can't companies pay better wages?
Because labor is subject to the same fundamental laws of supply and demand as any other resource. The pool of unskilled labor has a whole lot of supply.
There's no way to avoid this (Score:4, Insightful)
This has been going on for hundreds of years (Score:5, Insightful)
The groaning of the economically illiterate, that is.
I hereby sentence everyone to "Economics in One Lesson", by Henry Hazlitt.
New technology and new production efficiencies certainly displace people who were tied to the old technologies and methods. Most people don't think too highly of the folks behind Standard Oil, but an honest assessment would suggest that they did more to save whales than anyone at Greenpeace -- by making whale oil a less cost effective heating mechanism.
This naturally caused a huge job loss for the whaling industry -- which at the time was of course a great social woe.
Whalers, buggy whip manufacturers, and people whos jobs can be trivially replaced by robots are all going to be displaced when technology improves.
What bad economics (and policy makers) repeatedly do, and what is covered in Hazlitt's book, is they focus on what is seen and ignore what is unseen.
What is easy to see when a buggy whip manufacturer loses their job is that Bob lost a job.
What is harder to see is that nearly everyone else in the society is some fractional percent wealthier. The automobile saved people time, which is why it replaced the horse. People who spend less time unproductively can create additional wealth for the rest of society to benefit from.
I think most people agree that a world where we all have handheld supercomputers that can take photos is a better world than one where the instant camera is the only cost-effective consumer device for seeing a photograph within 1 hour of having shot it.
What this analysis fails to "See" is beyond the 13 jobs at instagram. It's easy to see the loss of jobs at Kodak or polaroid. But add up all of the jobs that are tangentially related to digital photography. Flickr? People working on DSLRs? People working on Photoshop? People who write a 99 cent appstore app that is a filter for your iphone's camera?
Cast a wide net to "see" what bad economists aren't seeing.
The thing about these luddite arguments that really shows they don't hold water is that if the old way was really better, we'd go back.
We, in aggregate, like the new way better -- which is why we aren't giving up our smartphones and rushing out to buy film cameras.
For once, I agree with Gartner (Score:5, Insightful)
Gartner, Forrester, etc. are the bane of my existence in IT, because they promote magical thinking among executives, but this time they're right about something.
No one is prepared to deal with the dirty little secret of the information age -- that there are going to be huge swaths of the population who will be out of work, with no prospects for future employment. The last time around, it was low-skilled factory workers. Now it's the middle class's turn! And when half the country has no money and no work, they're going to get angry.
I don't think the current generation of office workers is really thinking about how much less of them will be needed once companies get around to squeezing every single nickel out of every single business process. It's already happening on a huge scale, even in the IT sector. Anything rules-based is basically fair game for automation. Think back a couple of decades -- how many millions of bookkeepers, accountants, secretaries, low-level report-consolidation managers, etc. did large companies employ and pay a decent middle class salary to? Each one of those went out and bought those large companies' products, bought houses, cars and vacations. Now that strong base of consumers is disappearing, or they need to finance their purchases through debt because their wages don't keep up. Large numbers of corporate jobs can still be summed up as "I look at reports from this location, perform a few calculations and summarize the resulting numbers for my management by emailing them a spreadsheet." No one can tell me that the accountants haven't noticed this...
The vast majority of people in the middle class, in my opinion, are averse to social welfare policies simply because they don't think anything bad is ever going to happen to them. Worse, they think that if they support the richest people and just try really hard, they'll eventually be rich themselves. This thinking is going to backfire hard on them when their nice safe job is automated or no longer needed. For example, the most vocal opinions of the new healthcare law in the US are typically middle class families who get their insurance coverage through work and have never had to worry about not having it. Try explaining to them that there are a significant number of working individuals who can't afford insurance and you get, "But...but...socialism!!" All I can say is the next few years will be very interesting. If you believe the Star Trek TNG writers, it's going to take a massive upheaval to get to a post-scarcity utopia.
Utopia? (Score:3, Insightful)
I remember a long time ago when I was young that some people were predicting a future where due to technology advances you only had to work a small number of hours to meet your basic needs. People were worried about what we would do with all that leisure time.
Of course, this was naive and while it is true that technology advances have made it possible to produce much more with less labor, all of the productivity gains have been captured by the corporations and the 1%.
We now have a situation where there is a surplus of capital controlled by the rich 1% and corporations and also a surplus of workers due to gains in productivity. Unfortunately, this leads to low wages and not enough jobs. Poverty and social unrest are the result.
One would think that different approach to society would correct these imbalances by first raising the pay for work which would allow people to work fewer hours and create more jobs. Also, the idle capital of the rich and corporations could be harnessed (taxed) to improve infrastructure and social services.
We could have a utopia if the capitalists weren't so firmly in control of our government. Instead we have a dystopia with poverty, disease and social unrest... perhaps that could lead to a better government but it will be messy and the outcome is far from certain.
Re:Kodak vs Instagram? Really? (Score:5, Insightful)
There's new jobs being made when others disappear.
There're.
Anyway, it matters not how many new jobs are made, when the people whose jobs disappeared don't qualify for them. I highly doubt displaced, former foundry workers, who spent the last 30 years mastering the art of steel production, would give a flying fuck that Samsung opened a new facility where they used to work and is now hiring software engineers.
Not this shit again (Score:5, Insightful)
So, the guy didn't learn from the Industrial Revolution (and revolutions since) that all the fear of 'no more jobs for anyone' ended up being unfounded?
New technologies don't decrease the number of available jobs; wealth sequestration among the super-rich does. With the Middle Class having less and less money to spend, the demand for products -- and the jobs required to create them -- goes down. We've been seeing this over the past thirty years, which just happens to coincide with the rise of the computing industry.
Chicken Little (Score:5, Insightful)
Gartner says new technologies are decreasing jobs.
If this were actually true we would have seen a steady increase in the number of unemployed people over time during the past 20 years. Instead we had near record low unemployment until around 2008 when we had a banking (not technology) related financial crisis. Since then unemployment has been slowly but steadily falling back towards what passes for steady state norms. While it is true that people are not employed at the same companies they used to be, technology takes away some jobs and adds others. It also makes people more effective at the jobs they do.
But the "digital industrial revolution" is not following the same path. "What we're seeing is a decline in the overall number of people required to do a job,"
That's the entire point. It means you can get more done with the same number of people. It's called increasing productivity. Rather than having a room full of accountants entering journal entries by hand on a paper ledger we have one accountant keeping the books in some software and everyone else does something more productive. Instead of using switchboard operators we use computers to route calls. There is ZERO evidence that digital technology is eliminating jobs without replacing them with others. The number of jobs hasn't fallen due to technology but the skillsets required to fill them has changed.
Plummer points to a company like Kodak, which once employed 130,000, versus Instagram's 13.
I'm not sure they could come up with a more ridiculous example. Instagram is an add on feature to already existing social networks for sharing pictures. Kodak actually made critical parts of picture taking equipment. If you want to compare Kodak to something modern, compare them with CCD sensor manufacturers and camera makers which I assure you employ far more than 13 people.
Re:Wages as share of GDP dropping since 1972 (Score:3, Insightful)
Why can't companies pay better wages?
Because labor is subject to the same fundamental laws of supply and demand as any other resource. The pool of unskilled labor has a whole lot of supply.
Even more fun, if labor is, in fact, subject to the fundamental laws of supply and demand, it should (in a free market environment) achieve an equilibrium price equal to its marginal cost of production. Good thing that subsistence-level existence isn't horrible or anything.
And, none of this exclusively applies to the unskilled (though, obviously, the marginal cost of production of a college-educated worker is a lot higher, so such workers must earn more in absolute terms in order for their price to be equal to their marginal cost of production). The only people not predicted by 'the fundamental laws of supply and demand' to be reduced to subsistence are those who don't existing in a free market condition (eg. unionized labor, or workers in a category with a certifying association that constrains supply, like doctors and lawyers, or groups like investment bankers whose regulatory capture renders them partially immune to market forces) or who are (by luck or judgement) in possession of skills that face a sudden uptick in demand, allowing them to reap profits during the time it takes to ramp up supply. In gold rushes and oil boomtowns and things, this can even be unskilled labor; but it will more usually be specialists of one sort or another.
So long as labor is a commodity, only deviations from free-market conditions or being on the lucky side of shifts in demand that occur faster than supply can compensate keep anyone ahead of breaking even. Depending on how much it costs to stamp out a given set of skills, the 'break-even' paycheck might be higher or lower; but that'll be a function of educational debt and opportunity cost, not absolute wellbeing.
Re:Wages as share of GDP dropping since 1972 (Score:5, Insightful)
You can start a company, pay people whatever you think is fair. That is your right.
For someone with the username containing 'gandhi' you show a surprising lack of concern for civil rights.
The very central premise of capitalism is that in most cases *you can't start a business*. Technically of course you have the freedom to, and if you're in the right place with the right new idea you could do quite well, but capitalism thrives off economies of scale, and economies of scale mean that your little business is at a huge disadvantage to the incumbents. At some point we need a cut-off to prevent people from being abused.
Re:Wages as share of GDP dropping since 1972 (Score:5, Insightful)
. Good thing that subsistence-level existence isn't horrible or anything.
If you have a job in America (or two, for 60 hours a week of technically-not-full-time work, like I and everyone I knew worked in our 20s) you live better that 95% of people who have ever lived. Check out parts of the world where "subsistence living" still actually happens and adjust to reality.
The simple fact is, people want to be paid a bit better than their neighbors, and don't really compare their standard of living to most of history, or most of the world.
I don't care what economic system you embrace, you will never achieve a result of each person making a little bit more than average. Real life doesn't give "participation trophies", sorry about that.
Re:Hard to say. (Score:5, Insightful)
It's a stupid premise and a fasle dichotomy IMO.
The industrial revolution DID cause unrest. Only an idiot would think that wasn't the case. A whole body of famous literature is about said unrest, that people I would suspect are aware of even if not history in general. The Labor movement was an expression of unrest, as was the communist revolution.
It didn't take long for it to improve things overall, and not many sane people want to go back to a pre-industrial world, but to pretend it didn't cause job loss and unrest before job gain and improvement is absurd. I think that's what both the Luddites and the Futurists get wrong, there will be pain, there will be suffering, then there will be benefit. Markets take time to adjust, and attempts to short-circuit that adjustment time have historically gone terribly wrong (e.g. great leap forward).
Give me a break... (Score:4, Insightful)
So you are assuming the only costs Walmart has are from store labour? You know there are other aspects of the business don't you? Like rent, utilities, management, and that is just at store level. Then there is how many thousands they have to pay at head office in Arkansas. Then there are things like warehouses and distribution costs, and the cost of the goods they buy from CHINA. And I am sure there is a lot of other stuff that I am missing. Use your freakin' head, labour doesn't come out of profit, profit comes after ALL those other things, including labour, are taken into account against income earned.
Look, I have nothing against the argument that if you have no skills and never tried to get any (including dropping out of school), you shouldn't complain too much about low wages. On the other hand, if you never were given or never had the opportunity because of circumstances, well then I have some sympathy... not everyone's life is easy. But please don't shoot shit like that out your ass and ask us to believe it reflects reality.
This should be a good thing (Score:5, Insightful)
Reducing the amount of work it takes to keep the human race alive, fed, and housed should be unambiguously good. The reason it's not is because we've structured our society around the idea that all adults must be employed in full-time jobs (or be married to someone who is) to qualify for a decent life. We have this idea, particularly in America, that (employment) work is a virtue in and of itself. Unemployed people are shamed and villainized.
If we all lived on isolated family farms, it would be obvious that reducing the total workload is better for everyone -- less work = more free time. But instead, we live in a complex, interconnected industrial society. It's going to take a lot of large cultural changes before we can handle the idea that some people might not work at all, or only work a few hours a week. For perspective, we still don't have a consensus on whether something as difficult and time-consuming as being a stay-at-home mom counts as a job.
Re:Wages as share of GDP dropping since 1972 (Score:3, Insightful)
So, you're saying wages shouldn't be set by market pressures, but by some Central Committee, perhaps according to a Five Year Plan? History suggests that you're ignorant of history, if that's what you're suggesting.
Re:Wages as share of GDP dropping since 1972 (Score:2, Insightful)
If a CEO gets the owner one million dollars per day, the owner can afford to pay that CEO $999,999 per day and still pocket $1 a day. It's not your business. The owner can decide if the CEO is worth it. The CEO can decide if the pay is worth it.
Employees are free to sell their labor elsewhere. They have the right to order their affairs and sell their time as they see fit, finding the most advantageous deal they can. The employer can decide if the labor provided is worth it. The employee can decide if the pay is worth it.
Uh oh. I see the problem. Where does the 3rd party fit in? Some other person, like a government bureaucrat, intellectual elitist who doesn't actually do work for money, or politician pandering for popular votes... where can that person inject their bullshit in this scenario. A problem indeed!
Re:This has been going on for hundreds of years (Score:4, Insightful)
“The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”
One thing I recall vividly from my college macroeconomics course was the phrase "ceteris paribus" - all things being equal. While many economic theories are logically sound "ceteris paribus" the real world is not and never will be "ceteris paribus". In the real world jobless, poverty stricken, hopeless people do not disappear into the ether once they drop off a ledger. They do whatever animal instinct it takes to survive: they commit crimes, they revolt, they support any cockamamie cause that gives them the illusion of survival or restoration of better times. Does anyone really want to repeat the mistakes of the first half of the last century where debt, specifically war debt, plunged the planet into economic depression and chaos resulting in global world war? Economic policy should be set in a holistic fashion concerned with the long term interests of all participants, not just those the current market deems leaders.
Also remember economists are by no means immune from the same market forces that they study. How many economists are so devoted to their science that they would be willing to betray the the immediate interests of the their employer, typically governments or large corporate entities, if the science dictated it?
Re:Wages as share of GDP dropping since 1972 (Score:4, Insightful)
Damn it, why should someone with a debilitating handicap like that HAVE to work?
Re:Wages as share of GDP dropping since 1972 (Score:4, Insightful)
Re:Wages as share of GDP dropping since 1972 (Score:5, Insightful)
"The employee can decide if the pay is worth it."
Its lucky that the job market is infinitely flexible and everyone can pick and choose exactly what job they do, when they do it and how much they get paid for it.
Re:Wages as share of GDP dropping since 1972 (Score:5, Insightful)
Re:Wages as share of GDP dropping since 1972 (Score:5, Insightful)
In some magic fairyland, maybe. But when you're on your 200th interview for a 20-percent-pay-cut job and prospects aren't so rosy, what then?
Comment removed (Score:5, Insightful)
Re:Wages as share of GDP dropping since 1972 (Score:4, Insightful)
Labor is a market, just like any market. The work that unskilled people do in a non-skill-requiring job is worth a certain amount. That dollar amount is the intersection of [whatever a company is willing to pay] and [whatever those people are willing to work for].
You can start a company, pay people whatever you think is fair. That is your right.
What about the unacknowledged subsidy to the employer? They pay unlivable wages and brush off the cost of that (their savings from paying lower wages) onto society when said employees need to get healthcare and food assistance.
Re:Wages as share of GDP dropping since 1972 (Score:5, Insightful)
Here is the problem I see it.
1. Automation has reduced the need for unskilled labor.
2. Lower Education K-12 is designed to produce people who is able to perform unskilled labor effectively
3. Higher Education is designed to produce people who will go into research, and education for education purposes.
4. Due to having an economic advantage of not being bombed to hell in WWII the US had little economic competition for 50 years, now these countries have been rebuilt with a more modern infrastructure. But we had a few generation who had a higher quality of life that is now unsustainable, and we don't have an infrastructure to make lower quality of life better. (Public Transportation, Safe Low income housing...) So the $10.00 an hour worker would have a living wage. They may not have a Car or an X-Box but a safe roof over their head and able to raise a family in safety.
We need to fix lower education, and raise up the prestige of Vocational Training. So we are not unskilled labor, or college grads with no practical skills. The job of tomorrow need people who can be versatile and think on their feet, and adapt quickly to changes. We need to teach these skills.
We need to redesign residential areas where the Rich and the Poor live together and we have an infrastructure to allow people to work.
Re:Chicken Little (Score:5, Insightful)
If this were actually true we would have seen a steady increase in the number of unemployed people over time during the past 20 years. Instead we had near record low unemployment until around 2008 when we had a banking (not technology) related financial crisis.
During the Clinton administration, the average annual increase in jobs created was over 2.5% per year. Since 2000, that figure dropped to 0% and 0.21% during GWB's two terms. Obama's first term was also 0.21%. Population growth has been outpacing job creation for a while now, and youth unemployment in the US is around 17% and still rising.
Not only that, but Labour participation in the US has been steadily dropping since about 2000, from 67.5% to around 64%, with no signs of a reversal.
Underemployment has also been gradually increasing prior to 2008, and standing at about 17% today. Consumer debt levels are still standing at over 80%, up from 45% in 1980, suggesting that the jobs that are available are not sufficiently well paid, and are not keeping up with the cost of living.
These are not the indicators of a healthy labour market. Indeed, while unemployment is dropping slightly it is still roughly double pre 2008 levels, despite economic growth in the US.
An interesting thing to note is that not everyone employed is being paid. Being in a training scheme doesn't count to the unemployment list, nor being in education. Here in the UK, it's suggested that falling unemployment is mainly the result of government social security programs dumping people into either training or no income self employment, massaging the figures. The US might well be similar.
For me, the hypothesis that automation and technology are lowering job creation and wages is pretty sound.
In western societies where our economic growth is based around consumption of goods and services, what are we going to use to fuel growth when employment and wages drop even further? Are we just going to discard the unemployed we already have?
Its an economic and social time bomb.
Re:Wages as share of GDP dropping since 1972 (Score:5, Insightful)
So you can't do simple arithmetic? A single Wal-Mart drives dozens of stores out of business and you think that all those employees get (lower paying) jobs at Wal-Mart? And a few thousand IT employees nationwide somehow balances that?
The "enormous opportunities for increases in productivity and efficiency" you're talking about actually DECREASE the number of jobs available, and make the remaining (or newly "created" (i.e. refactored)) both lower-skilled and lower-payed.
Welfare state? Really? The only place in the US that a "welfare state" exists is in the fantasy Faux News alternate reality echo chamber. Anybody who even uses the term is living in delusion. You and I BOTH know that corporate and personal taxes are MUCH lower than in the 50s and 60s and that the overall economy is demonstrably worse since they have gone down. FACT: higher corporate taxes leads to reinvestment in the company, which leads to an expanding economy. Lower corporate taxes leads to wealth hoarding, which leads to a shrinking economy.
In short, you're an idiot who needs to stop drinking Rush Limbaugh's Kool-Aid.
Re:Wages as share of GDP dropping since 1972 (Score:2, Insightful)
You decide that what they're offering really IS what your time and skills are worth and take a job at the salary range offered?
If you think you're worth $60k per year but you've been to "200 interviews" and none are offering more than $25k per year then the problem isn't theirs - you're overvaluing your labor. You need to either settle for what you're worth or endeavor (through school, training, etc) to make yourself worth more.
Re:Wages as share of GDP dropping since 1972 (Score:5, Insightful)
There is a flaw in this system, and it is you. Survival of the fittest is a description, not a prescription.
Re:Wages as share of GDP dropping since 1972 (Score:3, Insightful)
The problem here is that the "market" as it is for the wage-earners and the "market" as it is for the owners, is not the same thing at all.
As the simplest example, that is where every penny of the billions "made" in arbitrage comes from, the fact that one person's "market" is not another person's "market", and one or the other corresponds more closely to the abstract and unknown continually-emerging "market".
So, sure, as a multinational corporation you have vastly better fine-grained statistical and geographical information than I have, and the hiring vectors to ensure the necessary pool of applicants to choose the least-able to actualize their value according to the ideal market. How is this an exemplar of the fairness of "the market"?
Further, your Five Year Plan, though certainly worthy of note, should also be considered within the light of ongoing competition in militaristic expansion with "our side" dedicated to bankrupting the other. That requires only a marginally greater efficiency in the base forms of economy. One cannot expect the same results with forms of "socialism" not carrying that burden. I suggest reference to your choice of Nordic countries for a more meaningful comparison.
Re:Wages as share of GDP dropping since 1972 (Score:5, Insightful)
The only reason I get to decide how much I get payed is that I work in an industry with a real unemployment rate around 4%, I am lucky enough to have high quality skills, intelligence, and the work experience to show I am worth the investment.
Most people don't work in that kind of field, and most people have more or less average competence, and many of them lack experience that demonstrates their capabilities. I am lucky as hell to be able to act participate equally in the job market. Most people have no such luxury and are struggling just to make ends meet, accepting less than they are worth, and then working twice as much just hoping to hold on and keep their family off the street.
Re:Wages as share of GDP dropping since 1972 (Score:5, Insightful)
You need to either settle for what you're worth or endeavor (through school, training, etc) to make yourself worth more.
That's easy for someone like you or to say, who presumably make more than $60k per year. But the reason I make 6 figures isn't because I chose to make 6 figures, it's because I got lucky and happened to both have the interests and innate ability in said interests to command those kinds of wages.
The problem isn't that people are too lazy to make themselves worth more. The problem is that we don't need an entire population of Doctors, Developers and Stock Brokers. Some people due to their economic status as children didn't have the access or exposure to the necessary prequalifications for a high paying career. Some people are just too dumb. Some people are really good at things that don't pay very well. There are a lot of people out there who are really good at Basketball. I'm terrible at Basketball. But even the people who are really good at Basketball still probably aren't good enough to qualify for the minuscule job market for professional basketball players. And highschool PE teachers isn't a $60k a year job.
Meanwhile the total personal income for 2012 in the US was $13.4 Trillion. Total number of workers is about 154 million. If we had a purely distributed wealth economy where everyone got a cut of the pot we would each make:
13.4T/154M = ~$86,500 per year.
Let's say the educated employees deserve more. These are our upper middle class and the unskilled labor deserves less. Let's say an education should about double your wages.
40% now makes $116,500k+ or more.
60% now makes $66,500 or less
But let's split that off too. Let's say professional degrees and middle management deserve more.
Let's take another $20k from the HS dropouts and $10k from the college grads.
Now:
10% now make $196k.
30% now make $106k
50% now make $66k
10% now make $46k
That's about what America would look like if we didn't let the free market assign you wage, we just gave everyone who stuck out college a guaranteed salary and every doctor/lawyer/masters/phd a guaranteed salary.
$25k would be almost half of the "base income" in that hypothetical scenario.
But let's address other libertarian anarcho-capitalist concerns. Without big buck potential nobody would start the next Microsoft. Personally I think a $200,000 salary would make a lot of people really happy since 99.5% of the population would see a HUGE pay increase. The number of people making six figure salaries would increase. The number of people buying cars would increase. The number of people upgrading their ipad every year would dramatically increase.
With 40% of the population suddenly making $100k a year if you did start the next Microsoft we could say you get stock. But have to pay a 60% dividend tax. You would still easily be a millionaire (or even billionaire) and the increase in customer purchase power would probably offset the 60% tax on dividends (plus you still make $200k a year) which should be enough to live off of. And unlike the status quo where bill gates can afford to risk his livelihood to start a company knowing his wealthy father will bail him out--more people will take risks and reach out hoping to maybe do a little better.
Re:Wages as share of GDP dropping since 1972 (Score:2, Insightful)
For example, let's say you live in an apartment that costs $800 a month. That's a big cost for someone who only brings home, say, $12k a year - someone like my sister. Who also is a single parent.
Add a second roommate with a job, and suddenly that $800 is split across two people. Have both people work at the same place, or have shifts that start at different times, and it's easy to share transportation. You don't need cable television, internet access, or a cell phone, although such things are useful.
The problem with this argument is that it's easy to suddenly find yourself in this situation with a one bedroom apartment. My wife and I moved to California for a new job that I had landed and started out in a 1 bedroom apartment that we could afford. 3 months later I was canned with most everyone else there. We were young and had very little savings. Breaking the lease would cost us 2 months rent that we didn't have. Then there was the cost of getting a new lease, 2 months rent up front for the first month + security deposit. All in all, to move would basically mean we would need to shell out 4 months worth of rent in one shot. We had maybe a quarter of that in savings and in southern California, unemployment doesn't even cover the rent for one month. So we were stuck and hoped I would find a new job earlier than 4 months. Neither of us were able since the country was spirling down into the depths of the depression. It took almost 6 months to find something else. Had it not been for very supportive parents, we likely would have been on the streets.
So what should someone do when they don't have money to even move?
Re:Wages as share of GDP dropping since 1972 (Score:3, Insightful)
So, who is the Owner selling things to to make that "pile of profits", if there are no customers because they're "unemployed and unemployable"?
Other owners. The fact that 99% of the population doesn't have money doesn't mean that nobody has money.
Re:Wages as share of GDP dropping since 1972 (Score:5, Insightful)
I see no reason any early teen that is willing to apply themselves could not do the same thing that I did and put forth a concentrated effort towards giving themselves a better future.
Yes, no reason why any particular early teen that is blah blah blah can't do the same thing.
But all of them? Lets say every one in the country were to take up your challenge. They'd all be above average earners?
Do you see the inherent basic math problem with that premise?
We need a solution that works for society, a solution that works for everyone. Not just someone in particular. Because a solution that elevates a few who try hard isn't really a solution, because if everyone tries hard then it doesn't work any more.
If everyone goes to school, and everyone busts their ass, and everyone applies themselves, then at the end of the tunnel... the pyramid of available jobs still needs to be filled, and the pyramid has a very large base.
If everyone does what you did, then some of them are still going to be stocking shelves at walmart and serving coffee at starbucks.
So we need to just accept that, and design an economy where we can compete with our peers to better our position in a job 'market' while at the same time ensuring that the bottom end of it is still pretty livable, since nobody how hard everyone tries an awful lot of us are going to be living there.