Everybody is worried about jobs. Some are worried about the trend to lower wages for the jobs we do get. But all too few are worried about a real long term problem that our economy and the world economy faces. The new era of high tech and globalization is making the labor of the average person worth less, even though productivity is higher than ever.
Robert Reich's Huffpo article highlights the problem.
Computers, software applications, and the Internet are letting us produce more with fewer people.
In theory, this is a huge plus. We can live better and have more time off.
But as Tonto asked the Lone Ranger, "who's 'we,' kemosabe?"
The challenge at the heart of the productivity revolution -- and it is a revolution -- is how to distribute the gains. So far, we've been failing miserably to meet that challenge.
The constraints on the production of goods is no longer the amount of available labor, but the supply of energy and raw materials. Technology creates higher productivity, so fewer workers are needed. With a surplus of workers, wages do not rise even as productivity does. It has been asserted that technology replaces jobs it eliminates with new jobs it creates. That might have been true in the past when technology replaced muscle power with machine power. But now technology is replacing human information work with machine information processing. This is no historical precedent for this, and we cannot rely on technology creating more jobs than it destroys. The result is that the benefits of economic growth do not go to workers, but to corporations and the rich. What makes things worse, high income inequality reduces demand in the economy, and demand is needed to make the economy grow.
It might get worse. Imagine what would happen if technology makes it possible to replace janitors or even auto mechanics with machines? Don't think it can happen? That's what people might have said about self driving car or a computer that can play the TV game Jeopardy. But those things are coming.
There is very little debate or effort to understand and deal with the situation, especially among politicians.
As Reich says:
Regressive right wingers want Americans to believe we've been living beyond our means, and can no longer afford it.
The truth is just the reverse. Most Americans' means haven't kept up with what the economy could provide - if the fruits of the productivity revolution were more widely shared.
This problem combines with the problem of resource exhaustion and energy shortage to make it very tough for those who hope to eliminate poverty in the world. The world needs to start figuring out how to make a future where everybody can have a liveable part in the economy.