Innovation Used to Benefit Workers. Can It Again?

Bob Lord

Bob Lord Tax lawyer, Phoenix, Az.

A few weeks ago, I cringed when I saw this headline at a popular progressive website: “See How Well the GOP Tax Scam Is Creating Jobs? Walmart Announces Plans for 360 Robot Janitors.”

It’s the same way I’ve cringed when conservative scolds taunt fast food workers that they’ll regret demanding a living wage, because it will cause their jobs to be mechanized out of existence.

On both the left and the right, Americans see innovation mainly as a threat to workers. The unfortunate thing is: They may not be wrong.

It didn’t used to be this way.

Replacing human labor with a machine used to mean fewer work hours per worker, with little or no loss in pay. It meant workers being freed up to do other, more rewarding work.

Until about 1980, technological advances benefited American workers and American society. Technological advances improved productivity, and workers shared in the benefits proportionately. Wages rose at the same rate as productivity.

Not only were American workers paid more, they enjoyed progressively shorter work weeks. As workers’ pay increased, they could buy more, which created more work, and more demand for workers.

Then, things changed. Technology continued its relentless march forward, but productivity increases stopped translating into higher wages. Instead, policy choices made by America’s political leaders caused the increased wealth and income from those productivity improvements to flow almost exclusively to those at the top.

Over the course of just four decades, America went from historically low levels of economic inequality to its highest level of economic inequality ever, surpassing even the inequality that reigned during the country’s gilded age. While the wealthiest American families own 60 times the wealth they owned in the early 1980s, the wealth of the median American family has decreased.

Those trends have now been at work for so long that the American view of technological advance has been turned on its head.

Today, it’s taken as a given that technology that replaces human labor will enrich only the developers of the technology — and the wealthy shareholders and executives of the corporations that employ it to eliminate jobs. We assume, not incorrectly, that the workers whose jobs are eliminated will suffer, while no other workers benefit.

It doesn’t have to be this way.

How crazy is it that we see the elimination of backbreaking labor as a bad thing? Nearly 50 years ago, science fiction writer Arthur C. Clarke proclaimed: “The goal of the future is full unemployment, so we can play. That’s why we have to destroy the present politico-economic system.”

In those words, Clarke captured the true value of technological advance: Technology should drive us ever closer to a society free of mundane human tasks. Instead, thanks to that “present politico-economic system,” it’s now employed in service of creating obscene wealth for a tiny fraction of our population.

That group, about 125,000 households in all, lives in absurd opulence. They own multiple mega-mansions. They fly in their own airplanes. Some own their own islands. Some earn more in a day than workers earn in a year. “Wealth beyond the dreams of avarice,” to quote a phrase most frequently attributed to English dramatist Edward Moore.

It doesn’t have to be this way. We may never achieve Clarke’s utopian vision, but we could be one heck of a lot closer to it. Stronger unions, a federal jobs guarantee, a universal living wage, and single-payer health insurance could all help restore the balance between labor and technology.

Those idea will have strong proponents in the next Congress. So now we can get to work destroying that “politico-economic system.”

 

This piece was originally published on Otherwords.org

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Reposted from Inequality.org

Posted In: Allied Approaches

Union Matters

No Money for Pensions, But Plenty for Parties

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

Private equity work has been sweet for Marc Leder, the numero uno at Sun Capital Partners. He’s parlayed his takeovers of troubled firms into a fortune big enough to make him a co-owner of the Philadelphia 76ers in basketball and the New Jersey Devils in hockey. New York’s tabloids, meanwhile, have come to dub the hard-partying Leder “the Hugh Hefner of the Hamptons.” The secret to his success? Private-equity firms, notes Center for Economic and Policy Research economist Eileen Appelbaum, plunder assets from the companies they buy, then send them into bankruptcy to sidestep their obligations to workers. Over the past decade alone, Sun Capital has bankrupted five firms and left their pension funds $280 million short. Leder, for his part, claims that the “vast majority” of Sun Capital deals have been successful. And he only parties hearty, the private-equity kingpin adds, 25 nights a year.

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How We Got Here

How We Got Here