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Old 12-02-2013, 04:58 PM
 
7,281 posts, read 9,650,463 times
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I know this topic will be controversial, so be it.

When automation penetrated our industries, we explained to displaced workers that technology was unstoppable and that the new workforce would have to adapt. Fine. We lost most of our industrial capacity and other countries were only too happy to take up the slack. Fine.

Now with more and more "smart" technology, specifically all those nifty devices we hold all day long to entertain us, provide us with virtual knowledge and so on, have we stopped to think about what is going on and how the longer term effects will change the economy and even hamper its growth? Let me explain what I mean:

Automation reduced the labor needed to make certain products and those products were once the mainstay of our economy. Labor requirements meant people were working. Hi-Tech came along and didn't just move labor off-shore (it did do that to some degree) but it concentrated a significant amount of wealth so that only a relatively few companies benefited and in those companies, the combined workforce is nothing compared to the needs prior to the upswing of those technologies.

I am not talking about people moving from an industrial or manufacturing base to one dominated by technology, I'm referring to the fact that fewer and fewer people are needed to provide the technology to consumers. That should be a good thing except that the fewer people work, the fewer can buy the very products being made.

Take as an example smartphones. The total number of people it takes to make smartphones is nothing compared to the numbers once required to provide the labor in previous manufacturing bases. While that should be a good thing because overall, prices do come down. What it doesn't account for though is the exponentially lower labor needs; who is going to buy all those products?

Don't get me wrong, I use and think technology is great; it provides lots of access to information and some entertainment that previous wasn't possible but therein lies the dirty details. Take entertainment made possible by technology and accessible via smartphones, tablets and computers. It takes very few people to create a game these days, yet the game generates huge revenues. What does all that money buy but a virtual experience that while providing lots of cash for the developer, doesn't then translate into additional employment needs.

Take Apple Inc. but it could be others as well. Apple generated huge amounts of cash yet it needs very few people to do it. The number of people needed to manufacture its products is minuscule and the programmers and so on represent likewise, a very small number of people. That is good for the company and shareholders but is it good for the economy?

This trend is growing and take the novel and innovative 3D printers. Soon, many products will be made using that technology and the workforce needed to make a large variety of products will be reduced yet again. Amazon wants to use drones to deliver goods and if that ever becomes a reality, yet again a workforce is reduced.

What isn't reduced are the revenues being generated. So as the trend progresses, at what point are there simply not enough people working to supply consumers to buy everything? While I'm sure this could be dismissed as saying it compares to what happened with manufacturing in the US and the heavy industries, is it really? Previously, the idea was that displaced workers would either adapt or eventually reach retirement and no longer be a factor to consider. So here we are but where do technology workers go when those jobs also cease to exist? Is everyone going to make 3D printers? I don't think so.

With each new generation of technology, the workforce needed is reduced. While there are new types of jobs, there are fewer of them.

As the revenue per employee goes up fewer and fewer employees are being needed. Sooner or later you run out of consumers able to buy anything because they are no longer working.

Jobs are still difficult to come by as the next crop of college grads is finding out. What they do find are lower paying jobs and that includes those headed into high-tech. The jobs that do exist can be high paid positions but again, fewer are needed. The economy doesn't need fewer but higher paid workers, it needs many moderately paid workers. The trend is complete opposite of what it takes to avoid stagnation.

I think we are headed there because not everyone can be a "green" worker nor can they all write code for games, or be actors in movies.

We aren't headed so much for the haves and have nots as much as the working and those who simply don't.
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Old 12-02-2013, 05:17 PM
 
Location: Waiting for a streetcar
1,137 posts, read 1,249,230 times
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It's really very simple. Real per capita GDP continues to climb. That's the pie. The only questions are with regard to how the pie is going to be parcelled out. If you insist on giving almost all the pie to just a handful of people, then no matter how big the pie might get, it still won't be enough to go around. That's the problem. Here are some pictures of it...


Wealth distribution In America - YouTube
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Old 12-02-2013, 08:14 PM
 
Location: East of Seattle since 1992, originally from SF Bay Area
34,176 posts, read 62,191,877 times
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The problem for workers in the kinds of jobs being eliminated is that companies are in business to make a profit. When they invest in technology it's a one-time cost, plus some maintenance, whereas employees are an ongoing cost that rises all the time with salaries, benefits, especially healthcare, retirement contributions, HR people, and lawyers to interpret complicated labor laws. People need to choose their occupations very carefully. The recent attention to $15 minimum wage for fast food workers will encourage even more automation than the timers for burgers and fries, and automatic drink delivery systems as they become much more cost effective. We have increasingly popular self-check at grocery stores, I'd look for them at department and hardware stores soon.
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Old 12-03-2013, 10:46 AM
 
7,281 posts, read 9,650,463 times
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Quote:
Originally Posted by Hemlock140 View Post
The problem for workers in the kinds of jobs being eliminated is that companies are in business to make a profit. When they invest in technology it's a one-time cost, plus some maintenance, whereas employees are an ongoing cost that rises all the time with salaries, benefits, especially healthcare, retirement contributions, HR people, and lawyers to interpret complicated labor laws. People need to choose their occupations very carefully. The recent attention to $15 minimum wage for fast food workers will encourage even more automation than the timers for burgers and fries, and automatic drink delivery systems as they become much more cost effective. We have increasingly popular self-check at grocery stores, I'd look for them at department and hardware stores soon.
Agreed.

Even the careful choice of careers won't do much to maintain a balance of working consumers to consumers with little means to consume except for government assistance. As technology progresses, fewer and fewer people will be needed to manufacture and the root of the technology doesn't require a large workforce either.

Also agreed on the attention to the $15 wage or so called living wage. Many jobs that pay minimum wages can be eliminated through technology. I bet McDonalds has a fully automated "food" delivery store under development. Far more people probably drive through those places anyway and so the only human contact the customer ever has is with a hand pushing the bag out the window.

A website can replace tens of thousands of sales personnel as proved by Amazon.

At what point does the whole equation tip and the spiral of not enough workers supporting a consumer based economy rear its head and culminate in a radical change in society?
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Old 12-03-2013, 11:00 AM
 
7,281 posts, read 9,650,463 times
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Quote:
Originally Posted by fairlaker View Post
It's really very simple. Real per capita GDP continues to climb. That's the pie. The only questions are with regard to how the pie is going to be parcelled out. If you insist on giving almost all the pie to just a handful of people, then no matter how big the pie might get, it still won't be enough to go around. That's the problem. Here are some pictures of it...


Wealth distribution In America - YouTube
That simplistic analysis doesn't work. First, one would have to accept that the existing wealthy are responsible for concentrated wealth, that isn't true. It is the individual that creates something like Amazon, Facebook and Microsoft that is a significant contributing factor to reducing the need for workers. Three very different facets of technology: Amazon the man in the middle, Facebook selling absolutely nothing but virtual existence and Microsoft with leveraged software to allow access through systems that person for person create very little.

If this were simply about wealth distribution, that could be solved in many different ways but that isn't the case. Eventually, concentrated wealth becomes diluted because there is only so much that wealth can control through financial means when the cost of delivery for things consumed continue to cost less and less.

It is the millionaire on the deserted island theory. All the money doesn't do them any good if it doesn't matter if you have it or not. When the consumer base is eroded to the point where it can't support those who want to sell products (the so called wealthy) all the accumulated wealth also dilutes. That is where government comes in because only it can print money and give that away to others.

Of course, some say that eventually this all leads to another type of society where the pursuits are noble and the consumer ceases to exist as a means to support an economy. Who knows?
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Old 12-03-2013, 11:16 AM
 
1,566 posts, read 2,909,303 times
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Quote:
Originally Posted by Hemlock140 View Post
The problem for workers in the kinds of jobs being eliminated is that companies are in business to make a profit. When they invest in technology it's a one-time cost, plus some maintenance, whereas employees are an ongoing cost that rises all the time with salaries, benefits, especially healthcare, retirement contributions, HR people, and lawyers to interpret complicated labor laws. People need to choose their occupations very carefully. The recent attention to $15 minimum wage for fast food workers will encourage even more automation than the timers for burgers and fries, and automatic drink delivery systems as they become much more cost effective. We have increasingly popular self-check at grocery stores, I'd look for them at department and hardware stores soon.
home depot has them
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Old 12-03-2013, 12:25 PM
 
Location: Jamestown, NY
7,841 posts, read 7,980,630 times
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Quote:
Originally Posted by fairlaker View Post
It's really very simple. Real per capita GDP continues to climb. That's the pie. The only questions are with regard to how the pie is going to be parcelled out. If you insist on giving almost all the pie to just a handful of people, then no matter how big the pie might get, it still won't be enough to go around. That's the problem. Here are some pictures of it...


Wealth distribution In America - YouTube
^^^
Quote:
Originally Posted by Mack Knife View Post
That simplistic analysis doesn't work. First, one would have to accept that the existing wealthy are responsible for concentrated wealth, that isn't true. It is the individual that creates something like Amazon, Facebook and Microsoft that is a significant contributing factor to reducing the need for workers. Three very different facets of technology: Amazon the man in the middle, Facebook selling absolutely nothing but virtual existence and Microsoft with leveraged software to allow access through systems that person for person create very little.

If this were simply about wealth distribution, that could be solved in many different ways but that isn't the case. Eventually, concentrated wealth becomes diluted because there is only so much that wealth can control through financial means when the cost of delivery for things consumed continue to cost less and less.

It is the millionaire on the deserted island theory. All the money doesn't do them any good if it doesn't matter if you have it or not. When the consumer base is eroded to the point where it can't support those who want to sell products (the so called wealthy) all the accumulated wealth also dilutes. That is where government comes in because only it can print money and give that away to others.

Of course, some say that eventually this all leads to another type of society where the pursuits are noble and the consumer ceases to exist as a means to support an economy. Who knows?
Actually, that "simplistic analysis" works very well ... just NOT for defenders of the current conservative economic paradigm that reducing taxes on the wealthy benefits everybody. We've seen in the last 30 years since this became the Republicans' mantra that it hasn't worked for anybody but the wealthy.
  • We have a deteriorated and deteriorating infrastructure in this country.
  • We have substandard public buildings from local elementary schools in rural areas to the US Capitol.
  • We have the greatest income disparity since the 1920s.
  • We have huge government debt.
  • We have one of the highest percentages of people living in poverty that we've ever had.
  • We have huge amounts of consumer debt.
Modestly raising the income tax rates on the wealthiest Americans can do a lot to address most of these problems because it would enable the lots of people who don't have decent jobs now to work at decent jobs, which, of course, increases demand for lots of other things.
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Old 12-03-2013, 12:38 PM
 
11,978 posts, read 5,097,861 times
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Quote:
Originally Posted by Mack Knife View Post
At what point does the whole equation tip and the spiral of not enough workers supporting a consumer based economy rear its head and culminate in a radical change in society?
Barring chaos and actual revolt, look to the Swiss, where they are discussing handing out money to all. And look to the proponents of MMT and the ELR.

MMT - Job Guarantee and Employer of Last Resort - We're back, You Moneterist!! | MyFDL

Thomas Palley » Blog Archive » MMT/ELR: A Mix of Old and Unsubstantiated New Ideas

The Job Guarantee is Not Workfare | New Economic Perspectives

Bill Gross advocates for a Job Guarantee Program | New Economic Perspectives
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Old 12-03-2013, 04:50 PM
 
Location: Waiting for a streetcar
1,137 posts, read 1,249,230 times
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Quote:
Originally Posted by Mack Knife View Post
That simplistic analysis doesn't work.
It's plain and simple cold hard facts that can't be refuted. All the wealth has been and is still being sucked up by smaller and smaller segments of the population while the rest of the people are simply hung out to dry. You can offer all the childish Horatio Alger prattle that you'd like, but nobody owes a lifetime of poverty to Bezos, Zuckerberg, or Gates. They are the equivalent of lottery winners. There is nothing there for the economy as a whole. For the economy as a whole to work, there needs to be the sort broad-based capacity to produce and consume that corporatists -- like the industrialists a century and more before them -- are working to destroy. That's the problem.

It's people named Reagan and Romney. It's people named Bush and Rove and Weyrich and Norquist. It's people named Koch and Coors and Scaife and Bradley and Olin and Walton. These are the people who are killing and paying for the killing of America.
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Old 12-03-2013, 04:52 PM
 
Location: Waiting for a streetcar
1,137 posts, read 1,249,230 times
Reputation: 1120
Quote:
Originally Posted by bxlefty23 View Post
home depot has them
CVS has them.
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