‘This figure is the end of the world for the average people. It reflects a rather depressing picture: The state and the economy are advancing by storm — but the workers are almost not benefitting from this progress and are left behind. It is almost a catastrophe.’
That’s Dr. Roey Tzezana, a “future studies” researcher at Tel Aviv University and a research fellow at Brown University, referring to the growing gap between labor productivity and wages, as seen in this chart:
In other words, as automation continues to render jobs obsolete, the divide between the rich and everybody else will only continue to grow, and the middle class as we know it will cease to exist. Such a scenario will create a society of extreme pockets of wealth and those who can barely get by.
And that’s a problem for everybody, he said.
“It doesn’t match the ideas of democracy because democracy is based on the middle class,” Tzezana told Haaretz. “It is harder for workers from the lower class to vote in an intelligent manner and make intelligent decisions. It is a situation that over time does not enable the continuation of democracy as we know it.”
He used an example of a factory with 1,000 workers scaling back to just 100 by keeping those with high-level skills to operate the machines that replace the lower-level workers, who are then relegated to service jobs at markedly less pay.
“This is not the problem of just one or two people,” Tzezana continued. “When a lot of people experience this drop, we are talking about an economic crisis: It is not just a problem only for those who can’t pay their mortgages — 60% of the sales of most companies are to the general public and if the public can’t afford to buy a new computer, the entire economy enters a crisis.”
To listen to more from Tzenana, check out his TED Talk:
When the government STEALS $3Trillion+ plus from the economy, and the Federal Reserve inflates away more trillions in inflation, it has to come from somewhere. One of the places it comes from is increased productivity. Rather than these benefits ending up in the pockets of employees, it is taken in higher regulatory costs, higher taxation, lost value of the dollar, higher prices for raw materials, etc. The insidious nature of the theft is almost beyond comprehension in its vast scope.
Why they want the guns, peasant uprising’s can be dicey for the leadership
Forget Yang’s welfare program. Instead eliminate all federal taxes for individuals. Zero. It’s a small part of the federal government’s loot anyway. But don’t hope for it. The last thing those bastards want is Americans keeping their own money. Sets a bad example, don’t you know.
Well, if they’re publishing it over at Haaretz, it’s gotta be true. Does this mean we won’t have to suffer our neighbor’s bad voting choices anymore?
This futurist crap is all bullshit. I’m amazed that anyone pays for this kind of shit.
I wonder who is left to buy anything when everything being made comes from automated factories? In New York at one time someone put barrels of water with holes in them on a cart hauled by horses to clean the streets of horseshit and the sweepers rioted with signs saying, “Down with the labor-saving devices!” Might be early to contend there will be no jobs for the working man.
This isn’t rocket science.
“And that’s a problem for everybody, he said.”
Good or bad, like it or not, right or wrong, income/wealth inequality, if it gets extreme enough, creates a very bad situation.
Would you rather rule in a turd world country or be middle class in a 1st world country?
Give me 1st world country for 1000, Alex.
You clearly do not understand what drives those seeking power.
Illustration: When “art” consisting of a ripe banana duct taped to the wall fetches $120,000-$150,000 in the elite’s art world, you know that it can’t be about anything that we would recognize as normal or logical. They have so much money it is like air to us. They have so much power they know they are untouchable. They have so much influence they know what they want, they can make happen.
I am amazed that anyone would think revolution is avoidable; it is not. It has been and always will be the normal and natural corrective to the excesses that work their way into every human system. It may be a revolution of thought, but it usually winds up as a revolution of arms. The elite today are Modern Pompeians, living at the base of Vesuvius, hearing increasing rumbling…and heading off to the next orgy without a care in the world.
Me, I’m long head pike manufacturers.
Ha! I enjoyed that past just an up vote!
Were you around TBP a couple of years ago when the discussion of the Tom Cruise/Nicole Kidman movie Eyes Wide Shut was ongoing?
Do you remember the storyline?
LL,
I posit that they would not have the power without the Mullah first. Besides, I don’t believe my comment was aimed at “what” the power seekers drive is derived from. I’m just saying that if you want a nice, calm and happyish country, you should aim for a very large middle class and LOTS of class jumping. I believe both of those are in decline.
Oh, and homogeny.
Am really interested in pursuing something my son said to me during last visit:
“Mom, people just need to get it into their heads that AI and Automation are here.” And when all the labor is performed by machinery, which needs oil, who accumulates the wealth represented by labor which requires no money. Only oil? (this last paraphrased, hopefully well enough to let you see he’s a brat, but a smart brat.)
He said his generation accepts the idea of UBI because of the lack of access they have to wealth. It is the Boomers fault they lack access: we provided poor education and sheltered them from hard work.
The entire generation may be schitzo except for small pockets of millennials kept completely free of techno influence.
Because, he informed me he was working for half the salary of what someone of his experience (a whole YEAR) should be working for within a couple of hours of laying a guilt trip on me about income inequality.
This income/wealth inequality thing really grabbed my son’s attention, for some reason. Do you think it has to do with the “Culture of Poverty” created by Lyndon Johnson’s welfare policies? Was it Step 1?
Someone around here has ben saying much the same thing as the author. It boils down to what are low skilled workers worth in a global, high tech economy? Answer: not very much.
Pretty much the other side of what my son is saying… he says with AI and Automation replacing labor, the “value” of human labor goes way down.
Ingenuity and skill create their own value, but the low skilled worker will need to be subsidized by those holding wealth.
Or removed.
He has Aspergers, so he’s allowed to say shit in a deadpan way that is really rather cruel. Like a comedian.
A Futurist?
My that’s quite the sobriquet.
Heavy hangs the crown.
after a long internship as a pastist…
“It’s harder for workers from the lower class to vote in an intelligent manner and make intelligent decisions.”
That sounds like…
“We candle makers are suffering from the unfair competition of a low-priced foreign rival. Our customers desert us and related industries are also injured. This rival is the sun! Please pass a law requiring the covering of all windows, skylights, holes and cracks. Domestic manufactures will be stimulated. Agriculture will thrive on the need for tallow. Whale oil demand will improve shipping and thus defense. Jobs will be created and everyone will benefit. We have always served our country well and gratitude demands we be protected.” – Frederic Bastiat
All the commenters believe there will be big problems with future productivity, etc. What makes you think more than say 500 million will be around to complain?
The perfect storm is present for a drastic population reduction. Think about it…..
The growing gap between productivity and hourly wages is due to two major factors: 1) the creation of money out of nothing by the Fed and fractional reserve banks which has transferred wealth from honest workers, pensioners and savers to the banking/financial/corporate ruling class, the so-called 1%. With an annual inflation rate between 8 and 13% (source: http://www.chapwoodindex.com/), this translates into the theft of ~50% of American wealth over the past five years alone which constitutes plunder on an astounding scale; 2) mass immigration from the third world which suppresses the price of labor while increasing the tax burden on American workers, estimated by the National Academy of Science at over $300 billion net (after taxes) per year. Put another way, the wages due to increased productivity have been stolen from workers by a powerful and thieving banker/financial/corporate class who have subverted the US Republic and now control the levers of power…including Congress, the “judicial” system, and government regulatory and security agencies. This gap is not do to market forces or free enterprise…but to massive theft and plunder by an evil oligarchy without a shred of humanity.
Wdg – with respect to point number two, there is a lot of research out there about whether or not that statement is true. Anything that is economy wide is difficult to study, as it involves huge numbers of variables, and how those variables are measured and considered impacts the results/conclusions of the study.
For instance, the Cato Institute (a libertarian organization) published this: https://www.cato.org/cato-journal/fall-2017/does-immigration-reduce-wages
The conclusion they came to is that wages are not suppressed by immigration. Whether or not it is true, it makes some interesting observations. For instance, what has the increased numbers of women in the workforce done to wages? Some studies say that has negatively impacted wages.
You make a statement that immigration suppresses wages, but I assure you that it is not a settled matter of fact, and great divergence ofopinion on the matter exists. Tossing out the left and right outlier studies, diverse opinions still exist.
Long, long ago I was involved in a study that indicated that immigrants took up high numbers of skilled positions, ie welders and such, and had a general positive impact overall on wages. That was a different era, and immigrants were relatively few then.
With respect to the cost of immigrants, it is substantial. The majority of estimates put it around $150 billion, not $300. The real issue and question is whether over time will today’s immigration pay for itself in future generations. I am skeptical, as it seems unlikely that bringing in millions of unskilled people from cultures that do not value education, and who seem to have IQs in the low 90s, will have a positive impact in the future.
The Cato article did not take into account the amount of social services that the illegals (those here illegally are not immigrants) consume vs. what they contribute. The results are negative as regards contributions. The illegals take more than they provide, and since they receive benefits that others must pay for they can work for less, working for less means that wages remain low so long as someone hires illegals.
“Consider health care: More than seven in 10 illegal immigrants do not have health insurance. When they get sick, they frequently turn to emergency rooms, which legally cannot turn patients away. The cost of that care is ultimately passed on to government programs and everyone with a private insurance plan. Americans pay about $18 billion a year to provide free and subsidized health care for illegal immigrants.
The same goes for welfare and food assistance programs. Eighty-nine percent of households headed by illegal immigrant parents utilize at least one welfare program. These families draw nearly $6 billion in welfare benefits per year.
Children from illegal immigrant households also strain our public-school system. Nearly a quarter of students in U.S. public schools now speak a language other than English at home – that share has more than doubled since 1980. Taxpayers shell out roughly $1.6 billion a year to teach these kids English.”
https://nationalcenter.org/project21/2019/03/20/illegal-immigrations-burden-on-opportunity-welfare-and-black-america/
Really? Only $25.6 billion? That’s pennies in the cushion.
LL,
When has the demand/supply law(?) ever not worked like this…
Donk – immigrants add to both lines. And hence why it is difficult for those who study this stuff to come to consensus.
You are trying to make the point that immigrants add supply only, but are ignoring, or seem to be ignoring, they also create demand (ie they consume). Plus, there is the future generation benefit that is really hard to quantify.
But if they make less, demand more tax dollars and reduce wages…the future looks so bright, I gotta wear shades?
Donk – I understand. But again, second and third gens often add a lot. Look at the Irish for instance. I mean Admin is Exhibit A.
Good point. Time will tell.
Hell, maybe the magic dirt theory holds water after all. It just takes time. 🙂
Do you know what else causes an increase in demand? Government mandate.
The answer for many including the dispossessed middle class is to find intentional communities that already are or are learning to be self sufficient. Tens of thousands of these have been established around the world over the last 50-60 years. These are the seeds of a new civilization that will emerge from the wreckage of the post modern world. They are often formed around a religion, philosophy or ecological precept. Many of these communities grow their own food and produce their own energy.