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Fri Dec 14, 2012, 12:33 AM

"Jobs, Productivity and the Great Decoupling"

Jobs, Productivity and the Great Decoupling




What’s going on? Why have job volumes and wages become decoupled from the rest of the train of economic progress? There are several explanations, including tax and policy changes and the effects of globalization and off-shoring. We agree that these matter but want to stress another driver of the “Great Decoupling” — the changing nature of technological progress.

As digital devices like computers and robots get more capable thanks to Moore’s Law (the proposition that the number of transistors on a semiconductor can be inexpensively doubled about every two years), they can do more of the work that people used to do. Digital labor, in short, substitutes for human labor. This happens first with more routine tasks, which is a big part of the reason why less-educated workers have seen their wages fall the most as we moved deeper into the computer age.

As we move ahead the Great Decoupling will only accelerate, for two reasons. First, computers will keep getting cheaper over time. Digital labor will become cheaper than human labor not only in the United States and other rich countries, but also in places like China and India. Off-shoring is only a way station on the road to automation.

Second, technologies are going to continue to become more powerful, and to acquire more advanced skills and abilities. They can already drive cars, understand and produce natural human speech, write clean prose, and beat the best human Jeopardy! players. Digital progress has surprised a lot of people, and we ain’t seen nothing yet. Brawny computers, brainy programmers, and big data are a potent combination, and they’re nowhere near finished. The implications of their work for the labor force are nicely summarized by the venture capitalist Marc Andreessen, who says: “The spread of computers and the Internet will put jobs in two categories: People who tell computers what to do, and people who are told by computers what to do.” Only one of these two job categories will be well paid.


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Reply "Jobs, Productivity and the Great Decoupling" (Original post)
applegrove Dec 2012 OP
SoCalDem Dec 2012 #1
PETRUS Dec 2012 #2
DJ13 Dec 2012 #3
HiPointDem Dec 2012 #4
Egalitarian Thug Dec 2012 #5

Response to applegrove (Original post)

Fri Dec 14, 2012, 12:46 AM

1. I prefer "unwinding"..

The Grand Unwinding Has begun

SoCalDem Donating Member (1000+ posts) Sat Sep-27-08 11:53 AM
Original message

We've all been given another warning. Now we must choose..Unsustainability or an Unwinding?

This whole Wall Street Debacle is just another "clue" to us all.
The warp-speed of our lives is at the heart of the "problem". We have been cultivated to believe that we must always GROW, always crave MORE, BIGGER, BETTER, SHINIER...at any cost.

America has believed its own press for far too long. Our "experts" make up statistics all the time. We are told routinely that we are the most generous, the smartest, the most prosperous, the healthiest, and yet none of that is true.

Most Americans live with TWO truths....the truth they see every day where they live and the "truth" they see & hear on TV.

We have always been "major-urban" and "rural-small town" and although small town people now have access to more than they used to, their mindset has not changed all that much since the 40s & 50s.. They are the LAST to see much real progress, and the first to experience a serious downturn in the economy, since they live on the fringe...

"Government" has a vested interest in growth at any cost. The "bigger" things get, the more complicated they get, and the greater the need for more legislation and more government hiring to oversee that growth (even though very little real oversight happens).

Bigger companies mean higher paid and more lobbyists are available to donate MORE money to campaigns.

Workers during the Industrial Revolution were told that machines would lighten their workload, and give them more leisure time...It did..The problem was that leisure time turned out to be unemployment, since fewer workers were needed once machines took over many of the more mundane tasks.

In the 20' s& 30s, workers were told that the automobile would provide them with an easier life, and give them mobility. It did, but it also created whole new industries that fouled the air they breathed, and put a whole lot of people on the move to areas that were fragile and not all that hospitable to the farming that followed.. Over-farming, led to the Dust Bowl and the demise of many of them.

In the 50's & 60's we were told that computers would some day make our lives and jobs easier. I dearly love my computer, but truthfully, once many jobs were switched from pencil-on-paper or people face-to-face, it made it quite easy to find someone across the world, who would work for a lot less, to do those jobs.

Every "advancement" has come with its own "destruct" button built into it.

Malls and discount centers were wondrous to people when they first showed up, but those "big-boxes" and the stores held within them, were owned by people elsewhere, and all the money poured into them, did not stay in the community where it was spent.

The local businesses that had once managed to satisfy all the needs and wants of the community, were suddenly no longer "good enough", and many people went from being proprietor of their own business, to hourly-paid sales clerk.

Advertising has groomed us to want more and more and enough is never REALLY enough. Big business has to grow bigger and bigger, so we must continue to buy and buy and buy some more...even if we cannot afford it...and more and more of us can no longer afford to keep buying.

We have houses, FULL to the brim with "stuff" and the only solution to that is to buy even BIGGER houses, so we can buy more stuff. The bigger the house, the bigger the payment, so many people are paying thousands every month so their dog & cat have a great place to lounge in all day, as they sit stuck in traffic and huddled in a cubicle at work..and their kids grow up in daycare with strangers, or wear keys around their necks so they can hang out with the dog and cat for 3-4 hours until tired-Mom and tired-Dad show up with KFC or pizza, sometime around 7PM.

Most of us no longer even know HOW to live simply. Our lives , and expenses have spun out of control . We have "stuff" that we can no longer repair or service ourselves (even if we wanted to or had the time to). Things we watch, listen to, or use to call each other, often come with complicated long-term contracts, and we are always searching for better "deals" and more sophisticated "features", even though most of us either work too much to have time to really use them much, or we end up unemployed and unable to even afford them.

The bind we find ourselves in, is this.. We have allowed ourselves to be taken in, and while we were "sleeping", the rest of the world has caught up with us, and in many cases, passed us up entirely.

When we left "Main Street" in the dust, we gave the corporations permission to leave US in the dust too, if the price was right.

We allowed our labor to be diminished in value, to the point that now our economy is 70% "service".. This only works as long as enough of us have the "extra" money for all that "servicing".

In less than 40 years, we went from being the breadbasket of the world, and the major supplier of "things" to the world...to an importer of food (costly to us and the environment, in many ways), and importer of things we used to make here, but no longer do.

A relative few have gotten incredibly rich from this whole change-over, but millions more have gotten poorer and sicker from it. The people we hire to look out for our well-being, have sold out to their corporate-funders, and while they have free rein to speculate and enrich themselves, the taxpayers are always called upon to "repair" their damage they do to the economy every 20 years or so. This is all done while we , the people, are told to stand alone, be resposnsible, look out for ourselves, plot our own journey, be resourceful, be entrepreneurial, take responsibility for our own actions.

It may be too late to unwind now, and I truly fear for the younger ones among us. The unwinding will come..it always does, and I probably will be gone when it happens, but I'm not sure that our country will survive in a fashion we would recognize when it's all done..

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Response to applegrove (Original post)

Fri Dec 14, 2012, 12:50 AM

2. From Dean Baker:

There is no serious dispute that the United States has seen a massive increase in inequality over the last three decades. However there is a major dispute over the causes of this rise in inequality.

The explanation most popular in elite and policy circles is that the rise in inequality was simply the natural working of the economy. Their story is that the explosion of information technology and globalization have increased demand for highly-skilled workers while sharply reducing the demand for less-educated workers.

While the first part of this story is at best questionable, the second part should invite ridicule and derision. It doesn’t pass the laugh test.

As far as the technology story, yes information technologies have displaced large amounts of less-skilled labor. So did the technologies that preceded them. There are hundreds of books and articles from the 1950s and 1960s that expressed grave concerns that automation would leave much of the workforce unemployed. Is there evidence that the displacement is taking place more rapidly today than in that era? If so, it is not showing up on our productivity data.

More at the link: http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/inequality-the-silly-tales-economists-like-to-tell

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Response to applegrove (Original post)

Fri Dec 14, 2012, 01:04 AM

3. Yes, technology, yes "globalization", but

I think the real underlying reason wages haven't kept pace with productivity the last 30 years is the result of the change in pay structures for corporate executives away from an actual monetary bonus towards tying their compensation to the valuation of their company's stock.

That created incentives to cut corners on increasing profits, and the workers are the first to suffer in the pursuit of higher profits, higher executive compensation.

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Response to applegrove (Original post)

Fri Dec 14, 2012, 02:53 AM

4. "Only one of these two job categories will be well paid." = is that so? & why would that be?


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Response to applegrove (Original post)

Fri Dec 14, 2012, 03:04 AM

5. And yet, those of us that do tell computers what to do have seen our wages collapse


just as fast as the those who are told. I must note here that the asshole that made that statement does neither, he is just another sellout POS that uses money to steal the product of other people's work.

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