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Comment by atleastoptimal | Hacker News Reader

Here's the thing. This is going to happen to everyone, as in, no person will be valuable enough via the contribution of their labor to survive without subsidies.

At the level of automation we've reached in society, low-skilled labor is worth, per hour, a very small amount.

As AI and automation improve, the majority of people will have negligible economic utility. The only way around this is to let those people starve or implement UBI. There is no magical future where AI serves as a democratizing "labor enhancer" for the masses. The value-add of some random person will be 0 in nearly all cases.

We will have to decouple our implicit assumption that a person's value is tied to their potential economic value.

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Actually, it's the opposite. At the level of automation we've reached, labor is worth, per hour, way more than 100 years ago. The problem is just that this value is siphoned off by shareholders who do not have to work to receive the monetary value that should go to the worker. So the issue is simply in how corporations are set up and how the stock market is designed.

The entire system is designed to drain as much value out of hardworking people into the pockets of those who do not work, but simply own shares.

Being able to buy and sell shares is not problematic per se, but there should be rules in place that give all workers of a publicly traded company better access to owning parts of said company. In other words, all workers of a rich company should be (relatively spoken) rich, corresponding to the value they provided to the company.

And I would say that developed western nations, including the USA, have done a pretty good job of providing subsidies and benefits for low skilled workers, so they can get on the lowest rung of the totem pole and contribute to society without starving. We specifically have food stamps, the EITC, welfare, child tax credit, housing vouchers, and so on specifically so they can provide valuable labor to society (and minimum wage is definitely a cost to businesses) and not starve.

and I would assume you would agree that these benefits be expanded as needed and cover a larger population if necessary, right? In fact, it would correct if everyone gets these living expenses taken care of, right?

No I don’t want to give free housing to rich people. I support means tested benefits. The goal is to make people self sufficient, not dependent on the government handout for life.

Surviving in these systems is incredibly stressful and leads to trauma for both the workers and their families. The stigma, uncertainty, and bureaucracy exact tremendous tolls.

Try surviving in the world before those systems existed.

This is not a helpful mindset. Because things were worse before, we should ignore how they are still not faultless?

Isn’t perfect the enemy of good? It’s better, but not better enough until it’s faultless?

The comment I replied to made no constructive suggestions.

They didn't explicitly, no. But implicitly, their constructive suggestions seem obvious to me. Reduce barriers to benefits often called "means testing" - also make them more comprehensive.

Oh, it was most certainly worse. But that doesn't mean we can't do better.

I wonder how our "pretty good" would rank in percentage terms on an absolute scale (what is possible under the circumstances we find ourselves in).

I bet cultures that have the ability to consider such perspectives would beat us handily, especially if they could do it willingly.

Asking for a friend - how do you get access to those programs? He's about to be homeless.

Just Google your state plus food stamps.

Typically that will lead to a portal for all of the Social services benefits.

If not they need to also Google your state plus Medicare, as long as your state participated in the Medicare expansion.

It's Texas so there could be problems. Certainly no Medicare expansion.

oof yeah. Not sure what to say about that.

worth of labor is not the worth of product/service.

Amazon picks the places where it can hire extremely cheap labor, because usually they are the only game in town. (monopsony market for labor.)

it happened without automation and happens with automation too.

of course it's on society to help those who are stuck in these unfortunately places.

> monopsony market for labor

Yes, when the inelastic aggregate supply of labor (expressed as an explicit work quota or expressed as an implicit work quota equal to cost of living divided by wages) exceeds the demand for labor, capitalism turns what should be a happy situation (let's all work a bit less!) into a horror show where working hard for scraps is a privilege and rotting in unemployment is the norm.

Which system works better?

We've been here before, shortly after the industrial revolution. Some countries tried communism, some countries tried fascism, and the US tried Roosevelts. The results speak for themselves. Large, meaningful compromises to labor can thread the needle well enough to avoid bloodshed. We need us another Roosevelt.

Whatever system they use in Scandinavian countries.

we are working less.

is it due to capitalism? is it just the technological progress fairy? (maybe the fairy is more attracted to the smell of capitalist pigs?)

it's not capitalism's fault that people are extremely bad at coordination problems (it's Mr. Moloch's fault obviously, who poisons people's minds with shortsightedness!)

it's not capitalism's fault that people choose to block densification of cities, higher taxes, welfare reforms, or that people vote based on their xenophobia.

> Amazon picks the places where it can hire extremely cheap labor, because usually they are the only game in town

That only works for some of their locations. They are limited by the need for their distribution centers to be in good proximity to the customers they deliver to. In my area, that means their largest distribution center is in one of the more expensive areas of the city. And the other big one is in a less-nice area that is probably still fairly expensive because it's close to the center of the metro area.

Sure, but their move into cities was after they already had a brutal margin and the free money press of AWS.

And cost pressure always applies.

They might put smaller less labor-intensive centers in those places. (Maybe a handover depo for last-mile delivery with some Prime stuff.) Though, of course, maybe the cost of managing non-uniform centers is more than vice versa.

Isn’t that how the market should work? Economically depressed area has people in need of jobs, companies should come in and satisfy that demand, making the place less economically depressed and eventually raising the cost of labor. No point to put an Amazon warehouse in Seattle’s south lake Union neighborhood, for example.

it's not how it works if there is a monopoly. E.g amazon is the only employer. I think this is where the local and federal governments should step in. If someone is working for 40 hours and needs foods stamps then the companies should be required to reimburse the government. It's a disgrace for society to take advantage of people like that.

If Amazon has a monopoly because they are the only ones interested in taking advantage of the surplus labor, then that’s a huge problem, but unless they are somehow locking other companies out, they aren’t the cause of that problem. Are you trying to tell me that Amazon shouldn’t bring those jobs to those areas, and that would somehow be better for the residents? I don’t see any good logic in that, yes, they are taking advantage of an opportunity, but no, those people are worse off if they don’t take advantage.

I’d love to see you go to a place like Yazoo Mississippi and tell the residents how lucky they are to not have Amazon there employing them.

The issue is simply companies taking advantage of people. We like to call it the market, but the market only works when there is a balance. I am simply advocating for a balancing force. Government or Unions usually fill this role.

I would equally challenge you to go to a warehouse and listen to peoples stories about their working conditions and personal stories.

I have friends who are immigrants and have heard them recommending Amazon to each other for warehouse work; apparently Amazon is very flexible if your schedule has to change.

Amazon is a huge player in e-commerce, but there are a lot of employers of warehouse workers and Amazon isn't close to having labor pricing power from what I can see. It's true I am located in a large city and they might have more wage-setting power in smaller cities.

In most cases for low end jobs, you have a lot choices, you just work somewhere else. Amazon usually isn’t the only job in these towns, just the one that pays the most without requiring much education and experience. Ya, life still sucks for a lot of these people working in a warehouse, but less than it would without the job.

The edge could be taken off of these jobs by just giving health insurance to everyone and not making it employer responsibility anymore. This would actually hurt Amazon since they often provide health benefits more easily than the rest (by giving enough hours). Detaching healthcare and maybe even minimum wage (via UBI) would go farther than expecting companies provide everything to workers no matter the job value.

Do amazon workers not require house, food, entertainment, etc.? Amazon isn't the only employer anywhere. Those people want and need services.

only doesn't mean they don't have effective pricing power in the local labor market due to their size

It is how it works given enough time and size and spherical cows and a bit of vacuum. :)

Amazon does provide jobs, in fact it provides too many jobs, crowding out other buyers on the local market, then after they downside/close, Amazon can effectively set the price of labor there, and it sets it to the minimum. (Meaning Amazon takes all the economic surplus produced, basically those who work there cannot save, cannot really raise children, etc.)

The problem is not that the market doesn't work, the problem is that it doesn't help with the desirable things society wants.

And if we only consider economic surplus, it is better to have Amazon there than not. (Before Amazon we can assume people there had even worse jobs, and the region heavily subsidized by various welfare programs.) But big companies inherently do very profitable things that look like coordination (ie. they look like they are in a cartel), that's why - other factors being equal - they won't open factories/warehouses in already saturated labor markets, instead they pick a place where cost of operation is cheaper (wages are lower).

And then through consolidation the market can get into a (pathological) state where there are only big companies, and they just buy/deter/sabotage new small companies.

No. You're forgetting that there is a finite amount of work needed and so orders-of-magnitude fewer people are required.

Also, the average real purchasing power in America has been declining for a very long time and cannot afford goods and services except through taking on debt.

There are two basic solutions to this problem.

1. Everyone works less (the government mandates a 35, 30, 20... hour workweek), raising the relative value of labor.

2. We collectively do more than the bare minimum needed for survival and comfort (the government raises taxes, spending them on activities like building sports stadiums or moonbases), raising the demand for labor.

Or we could just have the government stop having laws that constrain competition, so that automation makes things cost less instead of siphoning the money into the coffers of megacorps, and then at lower prices people buy more products and services, increasing the demand for labor and decreasing the cost of living.

The recent profitflation phenomenon demonstrates pretty conclusively that we can’t rely on lower production costs to result in lower prices without a lot of aggressive trust-busting.

> so that automation makes things cost less instead of siphoning the money into the coffers of megacorps

I cannot trust any company with any modicum of success not to immediately exit into the hands of megacorps. I cannot hope that companies have any type of morality/"want to make the world better" anymore.

But you trust governments to have that morality?

You don't need to trust in their morality, you have a direct ability to influence representative democracies.

You have no way to influence the governance of corporations.

Sure you do. You could buy shares.

It won’t give you much influence in isolation, but I challenge you to show more influence over your elected representatives.

> Sure you do. You could buy shares.

Oh, yeah, it's a great system if you're someone who has money. Most people don't.

Representatives, on the other hand, can't exist without votes.

Most of the money in politics is spent on convincing voters to vote for a particular rep, that's why money holds sway over politicians. But money in itself isn't actually going to get someone elected.

And isn't it weird how the people who do get elected actually tend to be of at least vaguely similar political leanings to their constituents?

If money was all it took, we'd have no issue electing hard-conservative anti-abortion fundamentalists in, say Chicago, as long as they had policies that their donors found appealing. (Or, conversely, socially progressive, economically regressive 'liberals' in the deep south.)

As it turns out, money in elections can only shift the needle so much, and won't turn black into white.

What it can do is pick a winner out of a lineup of similar candidates, where the margins are close enough that a bigger advertising war chest will move the needle... And even then, all of those campaigns are only possible by ground-canvassing volunteers, who are motivated ideologically, not financially.

If it was that simple then this problem would be solved. Clearly most voters (in your opinion) want a higher minimum wage, UBI, and greater corporate taxation. If elected representatives do what their voters want, why are we discussing this?

> If it was that simple then this problem would be solved.

Only if you see the world in black and white.

My thesis is that money is a corrupting influence in politics, but is not the main driver of it.

Meanwhile, money is the only influence in corporate ownership. Which is, incidentally, why most people with money do everything in their power to try to convince us that the solution to all the problems they cause is to move more power out of democratic institutions, and into corporate ones.

> Clearly most voters (in your opinion) want a higher minimum wage, UBI, and greater corporate taxation.

What on earth made you think this?

I said that the politicians that get elected vaguely, in aggregate, share the views of their constituents, and you're not going to tell me the deep south in aggregate wants any of these things. It does, however, want a lot of people who talk a lot about Jesus in government, and, well, their ballot results definitely deliver them.

If you believe my thesis is wrong, roughly how much money do you think will get someone like AOC elected in a district in rural Oklahoma? Or MTG in NY's 14th district?

minimum wage is a state issue , so i’m not sure why the south matters.

I'm confused. Do you think there aren't states in the deep south?

Study: Politicians listen to rich people, not you

Rich people don't want a higher minimum wage, UBI, and greater corporate taxation.

https://www.vox.com/2014/4/18/5624310/martin-gilens-testing-...

That does support both that governments can't be trusted to behave morally and that voting shares is just as good, but your tone suggests that you're disagreeing with the parent. Am I misreading that intent?

Thank you for prompting me to reread the comment tree to untangle the meandering rambles. Hopefully, this will clarify my perspective.

I think there's a chance you misread. Many times, I feel the conversations we have online would be better off held over a few beers and a backyard barbecue.

I feel that any concentrated center of power cannot be trusted to behave ethically. That's a fancy way of saying you can't trust the government or corporation to behave morally/ethically.

I assert that you have more control over government than you do corporations because, as someone said above, you can lobby/campaign/vote and have an impact on local, state, and federal government. As an aside, the further away from local, the less impact you have.

With corporations, you could buy shares, but given that each share is equal to one vote, the more money you have, the more influence you can exert.

I know it's been a fashion since Reagan to distrust government, but decades of neoliberalism have shown that counting on corporations usually makes things worse. Anytime one transfers a communal benefit into the pockets of a few, bad things happen.

https://www.bloomberg.com/news/articles/2024-05-22/exxon-sui...

How's that working out for these people who bought shares?

Monopolies are the natural end here, since more money means more ability to invest in machinery to produce (or AI), or just buy up any of the newcomers.

I think the US should seek both capitalistic and socialistic policies simultaneously, but this would require a revolution that may [not be possible / very difficult] to achieve from within the US political system because its "operating system" is tainted by lobbyists for the billionaires.

i. Restore corporate tax rates to historically high levels

ii. Increase capital gains tax significantly

iii. Tax speculation-derived activities, especially real estate and REITs

iv. Gradually curtail subsidies on field corn, currently occupying 5% of America's land (~100 million acres)

v. Shrink defense spending by half

vi. Enact single-payer healthcare for all eliminating co-insurance and better than Medicare up to UK NHS levels but without the government delivering healthcare directly; there shouldn't be good health insurance for just a few people with good jobs

vii. Greatly expand visas for engineers and entrepreneurs

viii. Also expand visas and professional certification "homologation" for teachers, lawyers, doctors, dentists, and researchers so they don't have to start over

ix. Invest in trade schools: plumbers, electricians, machinists

x. Invest in adult education, GED, and pre-college prep courseware

xi. Earmark funds and network applied STEM courses and internships for industry-practical training, especially for fabs, robotics, and high-tech manufacturing

xii. Invest in childcare and pre-K

xiii. Revisit tariff adjustments on a more frequent and selective basis

xiv. Entrepreneur incubators should get federal subsidies because they're generating wealth

xv. UBI - Everyone gets it without requirements excepted tapering down based on income

xvi. Small businesses should have even greater incentives in banking, real estate, state and federal bid contracts, and tax treatment

> i. Restore corporate tax rates to historically high levels

My gut feeling is that this would increase inflation, but I could be wrong.

> iv. Gradually curtail subsidies on field corn, currently occupying 5% of America's land (~100 million acres)

I would much rather the US spend $2.2B on corn subsidies so that we have food security in the event of a global catastrophe. I’d prefer eating nothing but corn flour/meal for years than starving to death.

> v. Shrink defense spending by half

As a (biased) US citizen, I would prefer keeping American Hegemony around, and that doesn’t happen without the massive military overspending the US does.

>I would much rather the US spend $2.2B on corn subsidies so that we have food security in the event of a global catastrophe. I’d prefer eating nothing but corn flour/meal for years than starving to death.

Are those really the only two options?

There are definitely other options, I’m not trying to present a false dilemma. My point is that spending 0.03% of total federal expenditures to guarantee food security is money well spent. Subsidizing other crops would work, it just happens to be easy to industrialize and automate corn farming and there’s plenty of good agricultural land in the US that is suited to grow corn.

> the US political system because its "operating system" is tainted by lobbyists for the billionaires.

It's "tainted" by lobbyists in the same way a Superfund site is a bit "dirty".

Shrink defense spending when Russia and China are gearing up for World domination?

I am from Europe, and in more immediate danger, but I would still hope US will defend any sort of democracy we have vs the threat of dictatorships. I know my country has helped out US with its wars.

Now is the time to increase those budgets, not decrease. Decreasing would actually increase the odds of WW3.

Why do you say there is a finite amount of work needed? There might be, at any one time, a finite amount of work someone is willing to pay x > 0 dollars for, but as x goes to 0 I’d intuitively think the amount of work increases indefinitely.

This is exactly what happens. Because of automation, the amount of labor needed to do all the work that was done in the 19th century is now a low single digit percentage of the population, and yet the unemployment rate is low.

The actual problem is artificial scarcity, not automation. A robot that can build housing cheaper than humans is great. A law that restricts new housing from being built so young people can't afford it is not.

We need to find more work for people to do and make it easier to start businesses.

Workers are already at an extremely high level of productivity compared to any other time in history. The problem is what they get in exchange for their labour, and that is a question of monetary policy and how inflationary money enters the economy (it's through real estate).

Going beyond unionization to ownership, one solution is worker-owned co-ops. Making those easy to start and providing tax benefits for such would be fantastic.

Worker owned co-ops have existed for a long time and they don't solve the problem, because they still have to compete on the free market for money that is created out of thin air and distributed through real estate.

https://en.m.wikipedia.org/wiki/Lump_of_labour_fallacy

This itself is a fallacy derived from the Keynesian crowd. There isn't unlimited demand for labor and never was. In the real world at microeconomic and local levels, labor demand is absolutely limited to discrete job posting and people who are already employed. This number is ultimately countable and finite. There are not infinite jobs available.

Things don't have to be mathematically infinite for them to be practically infinite.

> labor demand is absolutely limited to discrete job posting

Only for a very limited definition of labor. How many children post job offers for rearing them, for example?

> isn't unlimited demand for labor and never was

Correct. But we're nowhere close to it. To the extent labor is a limiting factor on growth, it's in its lack of adequate supply.

> In the real world at microeconomic and local levels, labor demand is absolutely limited to discrete job posting and people who are already employed

You're describing edge cases, e.g. mining towns and war zones. In enterprises, it's an open secret that most jobs aren't filled by asking for applications. In small businesses, it's quite common for someone to pitch a service or a role. (A lot of "small business" is indistinguishable from freelancing/contracting. For example, the person who told me at a bar that he does yard work, and whom I wound up hiring.)

Ah, no. There are absurd numbers of job reqs that don't provide livable wages, lowball workers compared to industry brackets, or require skillsets that are niche or unrealistic.

> absurd numbers of job reqs that don't provide livable wages, lowball workers compared to industry brackets, or require skillsets that are niche or unrealistic

Sure? How does that even remotely advance your argument?

I've seen people asking hundreds of dollars for a specialty pineapple, that doesn't mean we're running out of pineapples.

If what you say was even remotely true, wages would increase automatically because there would be superior demand to offer. Yet this does not happen.

In the end business output is constrained by demand and unlimited growth is a big fat lie. There are only so many goods/services that can be sold to people.

At some point you run into a situation where everyone has more stuff than they know what to do with (especially true if it is working people, because they are time constrained) and there are more services on offer that they are needs for, regardless of price/affordability.

If you do a thought experiment and give everyone infinite money you will realize that you will be constrained by real world considerations, just like the housing market is constrained by location...

Yes, the minimum wage in Big Macs has absolutely cratered, something like a sevenfold decrease. I haven’t checked the numbers but I expect the price of a house in minimum wage hours has similarly skyrocketed.

This is of course because labor has received virtually none of the labor productivity gains since 1965.

There is a lot of work to be done. Literally everywhere is short staffed: hospitals and other medical groups, construction, retail, restaurants, pharmacies, etc. I don't remember things being like this 20 years ago. Wherever you go, there's huge waits due to staffing issues.

And yet those places are entirely unwilling, and sometimes literally economically unable, to increase what they are offering to fill those positions.

It's not staffing issues. Companies very clearly are willing to overwork their existing staff rather than hire new.

There's a store of our local grocery chain that is placed in an extremely high traffic, high income, extremely high wealth portion of the state. It pulls in over $1 million a day in sales. They have complained about "staffing" for years now, all this "nobody wants to work" BS, to the point that they most likely are losing sales to competitors. They offer $20 an hour starting. They could offer $40 an hour and have their pick of great employees and unlock more revenue, but they choose not to do that, because it's better to struggle with an understaffed store than it is to set a precedent of people making actual money for their labor.

So, your theory is that they could double their payroll because grocery stores are so high-margin that this is no big deal? Or is it that you believe they wouldn't have whiny complainoids even at $40/hour, making it expensive but worth the increased cost? What happens when their competitors need to do the same thing just to stay in business... will everyone somehow magically have the top 5% of the wagie class, and everyone will be be happier, customer, employee, and boss alike? Would the people who do no-show-no-calls stop doing those when for the first time in their lives they can afford to skip a day or two, or would they do this even more?

I'm not convinced that there is any merit in this plan.

there's no merit because if there was, someone would be doing it.

The fact of the matter is most real-life business deal with razon-thin margins, particularly retail , and if you want to compete with amazon chinese subsidies, you have to literally run on fumes, all the time.

I have an idea: let's try and see - although I know it's against any current business teaching. Seems easier to assume the employees are whiners, especially from a position where the hourly rate is at least an order of magnitude higher. But I digress: of course the first question will be, who's trying first this novel approach? My favorite example is the comparison with Denmark, where the hourly wage of the mac worker is more than double yet the big mac price is pretty much the same. Who would have guessed...

> I have an idea: let's try and see

While I encourage and am delighted by your attitude that you want to see experimental results, there are some insurmountable issues:

1. I don't have any friends who want to run their multi-million-dollar-or-billion-dollar grocery businesses into the ground. 2. People of leftist bent, when seeing results they don't like tend to blame it on non-leftists and double down. 3. This is such bad budgeting that there's no need to jump off the cliff just to prove we'll splat. You're doubling payroll in an industry where profit margins are razor thin.

> My favorite example is the comparison with Denmark, where the hourly wage of the mac worker is more than double yet the big mac price is pretty much the same

Do the Danish customers trash the place like they do in every McDonald's I've ever been to in any large city in the US? Do they deal with hobos coming in with their own cups and just filling those up without purchasing anything? Or any of a thousand other issues (I guess you'd call them "social") that make operating a franchise so much more difficult and expensive in the US? Do they have to hire twice as many employees just to get 80% of the labor (oh wait, that one's rhetorical, we already know the answer). Has a Danish McDonald's employee ever had to hose down the restroom because someone projectile-diarrheaed every surface within that room, includin 8ft up the walls and so forth?

We can't have that, unless you can get everyone in the United States to behave like Danes. But then they'd also eat better (and be taxed like Danes), like Danes, and so sales would fall. And where Denmark has fewer than 100 stores, the US has 14,000... how many of those will close? Of the ones that remain open, how many would they lay off? Are the stores in Denmark franchises, or corporate and just there as loss leaders or something like that?

So some are paid more, the rest just become unemployed. Forgive me if I think that the Danish model doesn't work here.

>My favorite example is the comparison with Denmark, where the hourly wage of the mac worker is more than double yet the big mac price is pretty much the same. Who would have guessed...

Not me! Can someone explain this to me?

I worked in a restaurant for 5 years. It's a notoriously tight-margin industry, the poster child for late stage capitalism. We aimed for labor costs of ~30%. If we doubled wages, holding margins constant, we'd have to charge 30% more. Another ~40% goes to ingredients- I don't know what their labor percentage is, but conservatively assuming 20%, that's an additional 8% if they doubled wages too. If we let margins go to zero (they do have to be non-zero to incentivize opening a restaurant at all, but can be arbitrarily small), we're still a minimum of 28% more expensive.

But even if we ignore all of that, the US notably subsidizes beef to a large degree. If we had salary parity with Denmark, I'd still expect the US Big Macs to be cheaper. And that's all before factoring in Denmark's higher taxes.

So what gives? Does McDonald's have wider margins or a lower labor percentage than the rest of the industry? Does Denmark also subsidize beef?

There’s an aversion to calculating wages based on local rent, food, and gas prices that I haven’t found an explanation for.

If you’re hiring machinists or nurses for $2 more than fast food wages you will be continually understaffed and the local pool of skilled workers will dry up.

> There’s an aversion to calculating wages based on local rent, food, and gas prices that I haven’t found an explanation for.

If this is a recent development, I would say that it's just inertia against inflation. Are you saying this has been happening more than the past couple years?

From my perspective it’s post-pandemic behavior, but I’m just one set of eyeballs.

Inflation inertia seems reasonable but this is back of the envelope math most businesses do as a matter of course.

Everyone is trying to get someone else to eat the inflation.

Yet all they offer are ghost jobs at worst and hourly/gig work at best?

You guys are talking different things when you each say "worth". You're reasonable in saying the price of most labor may be lower due to the automation, and GP is also reasonable in saying that the productivity of labor may be much higher.

Whether either of these things are "correct", time will tell and likely will be nuance and vary by job role, but they're both reasonable.

The average real purchasing power in America has been increasing since at least 2010: https://home.treasury.gov/news/featured-stories/the-purchasi...

This is so weird.. my experience doesn't match with this data at all.

Because money doesn't buy happiness, and a lot of the increase in purchasing power is pointless stuff like the fact that you can buy an iPad that's twice as powerful for half the cost, or get YouTube for free instead of paying $50 for cable, while the things that really matter like housing go up in price relative to wages.

If you want to feel richer, look on Amazon/AliExpress and try to remember what stuff like that used to cost decades ago. It's not BS, it's very real. It's amazing how cheap random knickknacks are now.

But, you're right -- it's a pyrrhic victory because I'd rather own my own home and have a tough time affording a breadmaker and blender than rent forever and easily afford having all the gadgets that I do, and I think most people feel similarly.

Well mostly I was fixating on the health insurance, and how health insurance's growth rate has slowed, but healthcare costs have gone way up in general and health insurance covers almost nothing anymore while deductibles have also gone up (for me). But again it's about rates, and I guess when I look at Figure 3 again it just seems deceptive.. a personal computer purchase for me includes a GPU and those prices did not decline (the total cost of a gaming PC like tripled over that time period). Overall this just seems like it's cheer-leading industries that are shrink-flating: health insurance that covers nothing, shit tvs, cheap crappy PCs, airline fares (ever shrinking leg room?).

Edit: Also probably because I remember when the dollar had WAY more purchasing power, so my baseline is skewed already. But this "increase" in purchasing power is just a return to more normal levels. This data feels more relatable.. slightly less purchasing power since 2019 https://www.bls.gov/cpi/factsheets/purchasing-power-constant...

Yes, agreed, healthcare is another great example alongside housing. Healthcare, housing, and education have famously gone up far faster than wages for decades, while gadgets and knickknacks and furniture, etc, have gone down. Hindsight is 20/20 but most people would rather have more security (which is what healthcare, housing, education give) and less luxury (knickknacks, gadgets) than the other way around

Your link examines the purchasing power of "a dollar", not the purchasing power of the average person. Inflation is always supposed to be positive because deflation is far worse for the economy than inflation is. Average wages have also increased since 2019, hence average purchasing power of people increasing. Inequality has increased, but real purchasing power is still increasing for people at the 75th percentile, so generally almost everybody is getting more wealthy in real terms.

Housing and healthcare costs are outpacing wage increases, it's true. The CPI (which is used to determine real purchasing power) weights them at about ~44% and ~7%, respectively [1]. So together, these constitute about half of the CPI, and yet average real purchasing power is still increasing.

The big factor is where you live. If you live near a wealthy coastal city, you're getting railed by NIMBYs into far higher housing costs than the average American. You're also more likely to be in the minority of Americans who don't already live in a home they own (65% of Americans own their own home), so housing price increases are even worse for you. This group is likely over-represented on HN, but it's not exactly "average".

Cold comfort I'm sure... but migration is a potential solution.

[1]: https://www.bls.gov/cpi/tables/relative-importance/2023.htm

You're right. We get cheap knicknacks instead of cheap housing, electricity, water, food, etc.

Work feeds in to quality of life, quality of life is unbounded. If we had nuclear power plants in every town we could have nearly anything we could imagine.

Labor is fluid, if everyone working for a rich company should be rich, then why would anyone work for a not rich company? It would completely lock up the labor market, where everyone vies to work at the richest company rather than the company that can use their labor the best.

That's like asking why would anyone go to college anywhere but Harvard. They would, but Harvard has limited slots, so you do the best you can.

Also, it's weird you pose this as some kind of counterfactual proof by contradiction, it already happened, because "locking up the labor market" the way you describe is kind of what FAANG did, in at least a mild way, to software engineering, during what we now have to sadly call (if we rely on it for our livelihood) the good old days of the 2010s.

In fact, the dearth of math teachers in America probably has to do with this a little, for example. Shortage of math skills, and they really help getting into tech or finance, and the pay difference is huge, so, they suck all the oxygen out of the room.

So who gets to work for the richest company? The luckiest, the most connected or the hardest working? Is it better being a warehouse worker for Amazon rather than a ML engineer for a poor startup?

You're asking how it should be or how it actually is? If the latter, have you like, actually been in the workforce?

Yeah, it's a combination of luckiest, most connected, and/or hardest working, depending on the company, depending on the situation. You should know this if you've interviewed for jobs a few times. I'm really confused by your train of thought. Are you a college student?

how have the shareholders siphoned off money? dividends? Has amazon ever paid a dividend? does capital investment provide no value? If "shareholders" suddenly sold the stock, would the workers dump money into the organization to keep it afloat? There are a whole host of logical fallacies here.

When an activity produces an economic surplus there's a pretty obvious conflict that occurs in terms of how that surplus will be distributed between workers and capital owners.

You can search for "productivity vs compensation" to see the classic graph that shows compensation and productivity decoupling around 1980 in the US. One such is e.g: https://www.epi.org/productivity-pay-gap/ or for Australia (because that's where I live) over a different timeframe: https://www.abs.gov.au/articles/has-worker-compensation-refl... - I'm not sure anybody has conclusively identified the root cause although a lot of people have ideas.

> If "shareholders" suddenly sold the stock, would the workers dump money into the organization to keep it afloat?

Mature businesses don't make money by selling shares, they make money by selling products and services that the workers make. Share value is not of that huge importance.

'At the level of automation we've reached, labor is worth, per hour, way more than 100 years ago. The problem is just that this value is siphoned off by shareholders who do not have to work to receive the monetary value that should go to the worker.'

"Siphoned off"? The shareholders funded the automation that boosted the workers' productivity.

Then the question is: how they came about getting that much cash that they could fund such a thing?

Did they get it solely from their hard work or a large amount of luck/exploitation was involved? It is a rhetorical question, because of course the only right answer is the latter. The reality is that across all ages, you could never get there just by hard work.

I have a very fitting example in my family: my great-uncle/aunt were hardworking people and extremely thrifty (not to stay stingy, but to be fair they grew up in war time when everything was in short supply). Yet after 42 years of stable hard-working career and 33 years of confortable retirement pension (over the median salary for the area); the total of their assets doesn't even cross the million euros mark.

In a way they could have much more if they had put their capital to work, but since they were simple blue-collar workers, they did not, and what they end up with is just the result of their labour (and social system). This amount could just about pay for the adult life of a single person at minimum wage and you could barely fund a small/medium business acquisition. There are many businesses in the area that sell their assets for much more than that, and you would still need to exploit it to get anything; which is exactly where we started: make other people work to make you money, and give them less for their labour than you make exploiting the assets.

It took them over 75 years to accumulate all that, anyone getting that much cash earlier in life either inherited it or got lucky another way (did something that somehow got valuation way over the actual labor cost, which is basically the case for all early tech stuff).

The shareholders didn't fund jack shit, they took some money from someone else and used it as leverage to exploit the labor of other people, it's simple as that. Pretending otherwise is disingenuous.

If shareholders aren't entitled to the profit of a business, then they wouldn't have invested in it in the first place.

> there should be rules in place that give all workers of a publicly traded company better access to owning parts of said company.

At the end of the day, the price of labor is going to be a the intersection of supply and demand, so this isn't much different that forcing an employee to spend x% of their wages on buying shares in their own company. This would be great if you were a 1997 Amazon employees, but it would be a disaster for 1997 Sears employees.

> Actually, it's the opposite. At the level of automation we've reached, labor is worth, per hour, way more than 100 years ago. The problem is just that this value is siphoned off by shareholders who do not have to

If this were even slightly true, you could just go out and offer your labor on the street corner, and people would jump at the chance to buy it from you. Or you could "harvest" your labor and sell it retail to others trivially, and just loaf around half the year on the cool half million you earned the other half.

You can't do these things, and few can. Your labor has no economic value whatsoever, nor does the labor of most other people.

> The entire system is designed to drain as much v

Designed by who? Why does everyone use the word design here? It sounds every bit as dumb to say "design" here as it would if we were talking about biology. The system evolved. No one person got to design, or parts of it, nor did a committee. If some billionaire or pope or warlord wanted to redesign it today, he couldn't. It's never been designable. No one would even know how to design it so that they could get the results they desired.

> Being able to buy and sell shares is not problematic per se, but there should be rules in place that give all workers of a publicly traded company better access to owning parts of said company.

How could it possibly be more accessible? If a hobo walked off the street smelling like poop and vodka, with a wad of money in his hands, right into the broker's office... do you think they'd turn down the money?

Did you mean affordable?

> At the level of automation we've reached, labor is worth, per hour, way more than 100 years ago. The problem is just that this value is siphoned off by shareholders who do not have to work to receive the monetary value that should go to the worker.

You are wrong, but so very close that it's understandable.

What can be done with an hour of labour has gone up so very high. That it is true. But what has increased in value is the infrastructure of that allowed for the force multiplier. The actual value of labour thus goes down because it can be consumed so efficiently.

Since it's the infrastructure that provides most of the heavy lifting, the owners of it get the benefit.

If you need another analogy it'd be like a sport where players win the games, but it's really about the excellent coach that calls the plays. The players have no leverage even if they win all the games.

> what has increased in value is the infrastructure of that allowed for the force multiplier. The actual value of labour thus goes down because it can be consumed so efficiently

The price of unskilled labour is objectively higher today than one hundred years ago, and it's clearly higher in developed countries in comparison with undeveloped ones. This is due to a myriad of factors. But to date, workers have done well by way of increasing productivity. (Others have done better.)

Infrastructure is not sentient. Remember that and the causes of French Revolution my friend.

With no one to run the tools or tools workers chained to tools what good are the tools? They decay and many cannot be moved effectively.

Thanks to the fact that criminals won the war on drugs - a destitute life on the streets perpetually high on meth or heroin and alcohol appears to remain within reach for the foreseeable future posing an attractive alternative lifestyle for those dispossessed of abusive labor conditions. Funding social welfare programs would rebalance the calculus but that fact is angrily denied by most wealthy people despite the overwhelming consensus amongst researchers and practitioners.

Expect the difficulty to staff these expensive tools with impoverished staff to fuel inflation for the foreseeable future. It is not impossible that ever more creative financial engineering may stave off any of the countless imposing financial crises but the rebalance against capital for labor is long overdue even without a financial crisis to fuel discontent.

I for one hope that the rebalance can occur peaceably but accept the fact that rich and powerful live in reality distortion fields so are more likely to lash out violently than concede a single of their unearned pennies.

  >criminals won the war on drugs - a destitute life on the streets perpetually high on meth or heroin and alcohol appears to remain within reach for the foreseeable future posing an attractive alternative lifestyle for those dispossessed of abusive labor conditions. Funding social welfare programs would rebalance the calculus but that fact is angrily denied by ....

reality?

You're both wrong -- if you need two different resources as inputs to make something, and either missing makes the process impossible, it doesn't matter what your subjective opinions are when deciding which is more valuable. They are equally necessary and that's all there is to it.

So how come some input resources are priced a lot more highly than others? How come sometimes, say, labor gets a big cut and capital a small cut, and other times the other way around?

Supply and demand. Bargaining power. That's why. Nothing to do whatsoever with the actual value involved in the process.

What portion of the value we apportion to the suppliers of each resource is purely a political question based on bargaining power -- who is less willing to withdraw from providing their resources, etc

To use your sports analogy, if this magic genius coach can easily find plenty of any old players to execute his strategy with, then I guess he will manage to absorb the lion's share of profits. If it's hard to find players relative to supply/demand, then it doesn't matter if they're dipshits who barely manage to do anything and who just do what the coach says, it doesn't matter if anyone could do what they do. All that matters is the coach needs them and there's not enough of them. You can't have a team without the coach and you can't have a team without the players, regardless of their respective merits.

How you divide the spoils among resourceholders all of whom are critical to the process is purely political, based on leverage and negotiation, not based on actual "value" which cannot be computed unless a sports team can exist without players or without a coach and merely be a little, measurably worse.

> They are equally necessary and that's all there is to it.

Equally necessary doesn’t mean equally valuable. So there is that.

The more tasks that are automated, the more easily a low level worker is replaced. And the less they will get paid.

Think warehouses, checkout attendants, gig workers, …

The masses of jobs don’t require unique humans. And the more is automated, the less individual worker skills matter. For most jobs.

This gives businesses huge economic leverage over their workers. They will pay them the minimum it takes, and since this is an economy wide problem, every drop in wages somewhere makes it easier for wages to be dropped elsewhere while still retaining workers.

Finally, any area where many workers manage to hold onto higher wages will have a target painted on it as a prime place for new business value to be made finding a way to commoditize their work with automation.

Businesses are rapidly growing the capabilities of their physical and informational automation. Human workers are not getting stronger, faster, or smarter. So they are forced to compete for jobs by getting cheaper.

But isn't it more profitable to replace a high-cost job like a data analyst or logistics expert than 10-20 low-cost jobs like warehouse workers? Like the cost of the machines and the maintenance probably will end up costing more than humans.

Except replacing the data analyst is very difficult, especially since he probably brings to the table a good amount of human intuition is involved (thinking).

You cannot replace it straight with an AI or automated process because we just don't have the tech yet and you cannot replace it easily with any other human because it requires not only a particular education but also very specific skills that are not ubiquitous.

That human has more leverage and this is why he is getting paid more. It's very logical but I don't think it is fair to the other humans at the bottom, because while they are much easier to replace, they are still very necessary.

> Human workers are not getting smarter.

Everyone is walking around with devices that connect them to nearly the total sum of human knowledge. Not acting on that to get out of an easily replaceable job is a skill issue. Also, the education systems currently aren't the best. Automation and IT hasn't penetrated them as much as is feasible.

> skill issue

"To each according to his ability. Everyone else suck shit."

Being unable to learn is a matter of either unwillingness or disability.

Nowadays it's easier to learn than ever, and the real rates of intellectual disabilities/neurodiversity hadn't gone up that much. Such conditions are just easier to diagnose nowadays.

Thus yes, if you won't learn, and you can't prove that it's an organic problem, enjoy a job that sucks.

Blaming capitalism for that is meaningless.

> Equally necessary doesn’t mean equally valuable. So there is that.

But there's no objective way to measure valuable other than what the output is and what happens if the resource is removed. That's circular reasoning. You want to believe that doing something easy can't possibly be as valuable, but, it sure can, it's all a matter of supply and demand. We've all seen boomtown situations, especially if we read history or follow current events, where suddenly an undersupply of warm bodies relative to the opportunities makes for high wages relatively speaking for anyone just willing to move to the boomtown area.

There would be an objective way but it wouldn't be politically accepted. Because then there wouldn't be so much difference in compensation for work and it doesn't do rich people or politicians any good. After all, if everyone is closer in net worth, many of the problems politicians are supposed to solve just go away.

In any case, objectively the ones who get a shit ton of money just for owning a stock or just leading (making choices, good or bad) are overcompensated compared to the rest.

Supply and demand don't work for this type of stuff because demand (for better paid jobs/position) is basically infinite while supply is artificially constrained: we are making sure that only one in a hundred or one in a thousand can get the position, regardless of actual worker competence. One might be perfectly good enough for the job but if all the positions are taken, he will have to settle for a lower position.

The fact is that the difference between lower levels of pay and higher ones is way too large and this inequality has increased 10-50-fold in the last 50 years. Clearly the system is broken.

I agree that extreme inequality is generally bad and the value of labor should be higher than the value of capital. But market forces are really important for the functioning of the economy and the welfare of everybody, including low-skilled workers. Regulations like this would distort market forces. A much better solution is progressive taxation. Capital gains and dividends should be taxed much higher, with the benefits predominantly going to workers.

Probably not a new idea, but something I've been wondering is if the US implemented progressive taxation, and instead of a UBI implemented a stock buyback program where the government buys shares and then redistributes ownership to citizens.

Even though this is totally wealth redistribution (which is politically unpopular, socialism and all), I bet you could market it as super American like Andrew Yang did with UBI as the "Freedom Dividend".

This way you could "work within the system" and still keep stonks going up, but also help redistribute wealth to poorer citizens.

Interesting idea, but if you need medicine for your child and are low on cash, you will sell those stocks today rather than save them for the future.

And the buyer will be someone who has enough cash to not worry, and will thus get even more cash to not worry.

That is, I don't think it'll be that simple.

edit: one way to solve the above would be like the Spanish coops, where the ownership (stock) is tied to your employment. IIRC you have to buy say one stock to get employed, and you can only sell when you leave your position.

But then it's harder to redistribute the stocks...

Hmm, maybe then maybe put the shares into a retirement account? Basically a government 401(k). Then people will be discouraged from selling because of the tax hit when selling before retirement age. Unless of course they really need it. Which presumably they would also be receiving other government services and payments (Section 8, foodstamps, etc) if they are desperate enough to be liquidating a 401(k).

You are confusing the "productivity" of labor with the market value of the labor.

Exactly. Just correct the % gains in productivity terms to those from 1969 and the average worker would be making 6 figures right now.

Labor is worth more because there are "choke points" which need human intervention to run. Logistics companies need legal, support, drivers, operations, etc. However as certain domains prove entirely automatable via different tools, human labor will be redundant. There will be thousands of "ghost factories" and "ghost stores" which operate perfectly 24/7 with no human employees once intelligence and robotic physical labor become cheap and reliable enough.

Also it would be easy to completely restrict very profitable corporations using publicly funded workers. That is completely insane.

Of course no country wants to give up their capacity of cheap labor, so politics move slowly or worse, it becomes the literal race to the bottom.

It is false to believe they could do without these workers while in reality they probably could do without much of their management.

That's not true. The system is designed to pay least cost to both capital and labor. Labor just notices it more and whinges more because of sticky prices on their cost side, a less equal distribution of payouts because the quality of labor is far more varied than the quality of capital and the value of capital has been exploding over the last at least 5 decades as technology pushes output per worker far higher over time than output per unit of capital (because the technology is basically allowing more capital to be deployed per worker to increase worker output at a higher ratio of capital to labor).

Labor already earns 10-40% of the net income of capital (over and above what they are compensated for for their labor) because of government taxation. It's ridiculous to claim they should be getting even more of the pie or have any say beyond convincing their manager of something.

Also, this idea that a worker should be paid what they provide is stupid. They should be paid the lowest price the market will bear, the same as capital. What matters for labor's salary is not what they did but that a company is willing to pay the market clearing price for their labor set by supply and demand.

> Being able to buy and sell shares is not problematic per se, but there should be rules in place that give all workers of a publicly traded company better access to owning parts of said company.

Thats not a bad idea. If it was required to run some sufficient percentage of the company as if it was a cooperative and give a defined amount of shares to any joining employee for X years of service and also give representation to the workers in the governance of the company, things could be better. Europe already has the latter in the form of 'work councils'.

I'm not sure what you consider low-skilled - but have you tried to hire someone to build or fix anything recently?

Labor jobs seem to demand a huge price right now - and I don't think anyone is predicting robots that can tile a backsplash, install a 240v outlet, or even dig a trench for a sewer line anywhere in the near future. Let alone have the cost of owning and operating such a robot be more cost effective than paying a human.

I'm much more concerned about lawyers, accountants, marketers, and software engineers than I am people who physically build and fix things.

Exactly! I used almost the same example as you doing a tier ranking of jobs impacted by AI (https://youtu.be/4KSs29EPd8M)

I’m not sure if it’s what you meant but have you ever tried to build or fix anything recently? It’s the opposite of low-skilled and I’d bet the majority of supposedly high-skilled workers wouldn’t have a hope of completing a job even satisfactorily.

Imho labour rates are going up because they are for people who are actually doing real, scientific-definition-of-work while other people collect ridiculous paycheques for chatting on Zoom

Sorry if I sound bitter but I implore anyone to give it a shot themselves before they complain about paying for real labour.

I've done it and I think it's neither. Neither easier nor harder than software engineering and the like. Just different tools. Very similar in a way really.

Why one pays more? Not sure. Some kind of higher barrier to entry for software, weirdly enough. Something about the working with your hands stuff I think makes it easier to persevere than working with something virtual and abstract? Just guessing here. But the smoking gun is, why is abstract math achievement so low in America? Like a small minority of grown adults can do basic algebra. Yet a lot of blue collar work really is just as intellectually demanding. I mean you're constantly solving the [[Planning problem]] and all kinds of problems that come up in [[Operations research]]

The cost of labor is tied to rent.

People need to pay rent. As the housing crisis spirals and people need more money to pay rent, they will job hop to do so.

>At the level of automation we've reached in society, low-skilled labor is worth, per hour, a very small amount.

It's not just automation that made low-skill labor worth shit, it's also the next to zero import tariffs on cheap textile and e-waste from overseas.

We traded the cost of our labor for cheap mass produced junk.

Put tariffs on imports proportional to the lack of environmental and human rights regulations the source country has or doesn't have, and boom, problem solved.

And by "problem solved", of course, you mean "very large cost of living increases for the poorest 50% of the country"

Not even saying that you're wrong. But tariffs/onshoring don't exist in a vacuum. It's much more expensive to make anything in the U.S., and people do still want to buy things.

Yeah, there's definitely downsides to that since there's no free lunch, but maybe our society should focus on providing affordable essentials for most (education, housing, healthcare, etc), instead of gleiing at the though of getting a new games console for only $199 and that GDP went up by 2%, while food, rent and medical went up by 10%.

Optimizing our society for excessive consumerism and the eternal "line must go up" race, just to plow the wealth in the hands of a few billionaires, at the expense of workers and the environment, doesn't seem like the best long term.

The poor spend a higher percentage of their income on imports than the rich do.

Imports that are actually necessary or frivolities? Also, how were poor people surviving without cheap offshore imports before those became a thing?

Well you see that thing used to be made with higher cost American labor, and those workers were paid more, so they could afford the things they were making.

When the jobs were shipped overseas, those workers were not able to get higher paying jobs, so they were stuck with less purchasing power, such that even though "stuff" is way cheaper now, all the things that couldn't be built overseas now cost an insanely higher percentage of that worker's take home pay.

Sure, you used to have to save up to buy your one pair of shoes per decade, but they mostly lasted a decade. Now you can buy three pairs for the same price, but all together they only last 5 years. You are poorer even though you can "afford" more.

The poor definitionally spend a higher percentage of their income on just about everything because their income is significantly smaller

True, that is the primary effect.

But it holds even if we calculate as a percentage of expenditures rather than as a percentage of income.

The poor tend to spend more of their money on hard goods and the rich a higher percentage on services. And of course goods are a lot easier to import than services.

Isn't it mid-skilled desk jobs that are becoming worth less and less?

You can't automate a lot of tasks firefighters do. You need someone to actually show up in-person, in an area where there might be things that interfere with electronics.

Automation in cleaning or cooking is pretty minimal. I don't see computers replacing chefs at any of the restaurants in town. We have roombas, but they aren't even particularly good at vacuuming - they can't move furniture to get behind it - and I don't know of anything that automates dusting, etc. There's laundry machines and dishwashers, but they still require human intervention.

We have more and more people delivering packages, not less, and self-driving technology is a dangerous/morbid joke.

On the other hand, automation of websites is getting better, but we didn't really need most websites anyway.

You can't yet, but with robots you will be able to.

Once humanoids are good enough nobody will be, or rightfully want to be a firefighter. Even without AGI, teleoperation could be enough. However once AI is good enough that you don't need a human to operate it then there's no reason to hire a human for any step in the process.

There is no clear path to a general android. Every physical task that has been automated with robots requires robots engineered specifically for that task. Engineering, building, and maintaining those robots is a massive expense and only happens for tasks that are lucrative and occur at scale. Much of the economy is in a long tail of tasks that would not be profitable to automate, barring a major revolution in robotics.

Or more importantly you can make each human far more effective with partial automation (AKA tools).

I believe labor is worth whatever the employer can get away with. As such the value of the cheapest labor is what society allows companies to get away with. An employee's wages should be high enough to live off of and this should be enforced by having high labor standards.

That's all very well for those lucky enough to be employed. In a future where an increasing amount of necessary work is done by machines, what about those whose labor is not needed? Eventually, that's going to be nearly everyone.

>In a future where an increasing amount of necessary work is done by machines, what about those whose labor is not needed?

A lot of work that's absolutely needed for our survival is still paid dogshit: think construction, cleaning, waste disposal, agriculture, fruit picking, etc. Even in developed countries with human rights, most of this work is done by what are basically modern slave workers usually from abroad on dinghy visas.

Those are the jobs getting the least amount of automation. Robotics is insanely far away from reaching the speed, dexterity, cognition, perception, adaptability and cost for that to be automated at the same rock bottom prices as human slaves.

Currently we live in a society in which a few people have more wealth than tens of millions. The distribution of resources in the world is grossly unfair and there needs to be an evening out of this distribution. Let's first have a more equal society and then tackle the problem of underemployment.

> Let's first have a more equal society and then tackle the problem of underemployment.

In other words let's never tackle the problem of underemployment? A good way to ensure that something never gets done is to require a very hard thing to be done before it.

Your statement assumes a conclusion that has not been established and indeed that conclusion is wrong in my opinion. We can tax wealth and tax money transfers out of the country and do a host of other things to equalize things. We can establish labor standards that mandate a certain level of living for workers. We can also require a high level of labor standards for imported goods.

As an extreme example of how easy it can be to better equalize the distribution of wealth, and not one that I'm advocating for, the Soviets did a great job of ensuring that economic inequality was low. Of course this was obtained by ensuring that everyone was equally poor.

The combination of a growing no/low/medium-skill large workforce in the US makes for unlivable wages for most people because there are too many people chasing too few jobs. America doesn't do traditional factories per the Rust Belt and offshoring, but when it does, they are highly automated and don't employ as many people as they used to.

America either needs to find a way to put labor supply to work or it is going to have to give money to people so they can survive until we can find something useful or meaningful for them to do.

Perhaps America should heavily invest in a wider range of community, education, and healthcare social enterprises to provide services that aren't easily automated and are lacking.

America needs stronger, effective unions too.

third option is dispose of them by letting whoever can't find a job fall into (if they're lucky) being NEETs at a relative's house, or (if unlucky) meth and fentanyl addiction in encampments, scrounging off scraps, essentially in a waiting room for a quick death, while the masses are distracted by mass media with one unrelated distraction after another

in the meantime, the defeated homeless addicts serve as a "reserve army of labor" or as george carlin put it to "scare the hell out of the middle class" in other words, keep wages down and enforce docility for those who are still lucky enough to have jobs

The third option is what is happening right now. It's pathetic. The ruling class has perfected its use of media technology to influence the masses so well that we can even analyze, discuss, and reveal their methods without fear, because even if we announce it from the rooftops the masses will still turn back to their TVs and tiktoks and forget they heard anything, dividing their attention among 100 distractions to keep them from ever banding together.

> As AI and automation improve, the majority of people will have negligible economic utility

Who's going to subscribe to Prime and buy stuff when everyone is poor? The Walmart/Amazon wage strategy only works if the rest of society doesn't defect too. Henry Ford understood that his workers were also consumers.

Henry Ford lived in a universe where the odds of the working class getting together and guillotining the owners were non-zero. Most of the West's labour gains were done under the shadow of the Red Scare.

Nobody is seriously scared of that in 2024.

It's still fundamental logic that the masses need to be able to afford your goods if you produce mass market goods. Or are you going to stockpile them?

> It's still fundamental logic that the masses need to be able to afford your goods if you produce mass market goods.

It's fundamental logic that unless your company provides something close to 100% of the employment market (as in, you are a complete monopolist on all economic activity), you are better off paying your workers as little as possible.

Your workers are a tiny portion of your customer base. Let some other sap pay theirs well.

Now, if you have other reasons to pay your workers well (competitive demand for their labor, high turnover, need for growth, motivation tied directly to output, etc), then it is also logical to come up with a nice-sounding fairy tale justifying your largess.

(Or you might actually be motivated by some kind of chivalristic noblesse oblige largess, and are tricking yourself - or socially signaling to your peers - by coming up with a 'logical' motivation for it. I wouldn't immediately assume this of HF, but I am not exactly a Fordian scholar. All I know about him is that he owned a factory that built cars, was a bit of an anti-semite, and also had a lot of opinions about how his employees should live their lives.)

> Your workers are a tiny portion of your customer base. Let some other sap pay theirs well.

Other companies notice your "brilliant" strategy and start adopting it, and now your sales are in terminal decline as your customer base is impoverished. Short-term thinking is the Achilles heel of modern capitalism. Unless of course the new economy is automated companies trading with other automated companies; maximizing shareholder value as the human race withers away. This reminds me a short story of a damaged ambulatory AI space-suit carrying an injured and dying/dead astronaut over the surface of a desolate planet to get to "civilization" thousands of miles away.

I think they're talking about one of the short stories in The State of the Art by Iain M. Banks

What a great read.

I was - thank you! I should have realized the story belongs to the Culture universe.

Is there a story where non-sentient automation takes over society and leaves humanity by the wayside? Not malicious, sentient AI subjugating humanity (like Terminator or Matrix), but apathetic automated corporations maximizing profits trading with other automated corporations as humanity withers. I'd read/watch that

> Your workers are a tiny portion of your customer base.

But they are the best representation of your customer base possible, if you're an industrialist selling mass market goods for civilan use. If they can't afford your stuff, then the rest of the masses can not either. Because among the masses of the population that you can draw your workforce from, the factory worker will be the best paid. They wouldn't work in a factory otherwise.

The dilemma of the industrialist has always been that it's easy to crank up production enormously and the problem is to find enough customers to sell your product to that can afford it and keep the wheels running. Before industrialisation you only produced to demand and did bespoke stuff. So affordability and finding customers that can afford your product was always on top of the mind of any industrialist.

Yep. There will be too many people competing for too few jobs, even so-called high demand professional specialities. There are always too many lawyers, and it's not a lawyer joke.

We're going to have to reform extreme wealth inequalities and move to UBI and redistribution of wealth, or otherwise there will be a great upheaval and billions will be impoverished and living in favelas in 20 years.

Already, there are vastly undercounted millions of homeless and functionally homeless people in America, a supposed first-world countries.

To maintain a humane standard of living for all people requires recapturing trillions the ultrarich have taken for themselves.

There is no "system" nor "reform" that can magically fix a problem that is fundamentally within the modern human soul. Avarice has become the defining characteristic of most people and that reflects in the culture. If you look with the same critical eyes that you use on the government, big businesses and ultra-rich, and use those critical eyes on people near you including family and friends, then you will be quite uncomfortable.

> otherwise there will be a great upheaval and billions will be impoverished and living in favelas in 20 years.

Let me just... yep. 1.1 billion living in slums or slum-like conditions today. We're already there.

>our implicit assumption that a person's value is tied to their potential economic value.

The assumption is that their salary is tied to their potential economic value. Human value and dignity is separate.

> At the level of automation we've reached in society

We have been automating work for many centuries. And after a hundred years Keynes prediction [1] still isn't reality, somehow we keep finding ways of keeping ourselves busy :)

[1] https://www.npr.org/2015/08/13/432122637/keynes-predicted-we...

Have we also had for centuries a small glass brick that we can point at things and have the things described (by something that's not human) in real time? And then have that something tells us what do with those things to achieve a goal?

Maybe, just maybe, this time is different.

I don't think this is strictly true. I think that Amazon could automate more of their order fulfillment if they were willing to invest in that. I also think that for the jobs that do need humans, they could afford health insurance (really not insurance these days, just a way of paying for some healthcare pre-tax) and to fully-fund the employees 401(k) or similar. Like, nobody shops on Amazon because they have the best price. If some other company starts doing same-day delivery for a wide variety of products, and the employees are treated well, and it costs $5 more per package... who cares? I'd switch to them overnight.

Honestly, Amazon is kind of the snake that's eating it's own tail. Nobody feels good about buying from Amazon anymore. The customer service treats you like crap. The employees don't do a good job because they'd be fired if they did. The time is right for them to disappear overnight. I already don't trust them for anything expensive; if I'm ordering electronics, I get it through B&H, who makes some minimal amount of effort to ensure that you don't get a brick instead of a camera. Slowly but surely, the rest of the world is chipping away at their empire. "You have to indirectly torture one of our employees to get your thingamajig," isn't helping. I really think that if we fast-forward 20 years, we'll see that "no bathroom breaks, pee in a bottle" didn't make society much richer. (Of course, none of this matters. The early execs are out and incomprehensibly wealthy. I feel bad for the people that saw that and joined late, but will never achieve their goals in that area.)

> As AI and automation improve, the majority of people will have negligible economic utility.

I'm not 100% sure of this. As a software engineer and AI researcher I actually feel that AI is more likely to replace my job before it replaces some dude hauling boxes in a truck across Colorado during a blizzard and then figuring out how to unload them into the back of a poorly-organized grocery store, or some restaurant chef working with open flames in the back of a restaurant while figuring out how to make something vegan and dealing with someone else's peanut allergy.

Robotics+AI will happen eventually, but high-paid computer-based jobs are IMO the easiest targets to replace. Human labor involves dealing with a lot of corner cases safely and it's going to take a while.

> The only way around this is to let those people starve or implement UBI.

False dilemma. There are other methods to implement tax and redistribute. Additionally some countries like Canada and Switzerland are taking the lead in offering legal frameworks for life management solutions.

Please say more about "legal frameworks for life management solutions". You can't just drop those words in that order with no further context and walk away.

What is there to add? People have a growing need to make and express choices about hastening unavoidable eventualities. Willing service providers need legal protections and the ability to document a person’s choices. In Switzerland this has grown into a minor tourist industry.

https://www.swissbiz.ca/is_article.php?articleid=47

Switzerland and Canada are hardly taking the lead; I live in a US state where assisted suicide has been legal for 27 years.

Right. It's the workers that have zero value add and not the people who sit in offices or at home making hundreds of thousands, tens of millions, or hundreds if millions doing a job anyone could do or even a job that isn't needed at all.

In Australia unskilled labourers are highly sought-after. It's physically demanding but you can do very well for yourself.

I think the realities of the workforce are wildly different to what we'd typically experience outside of the tech sector.

> At the level of automation we've reached in society, low-skilled labor is worth, per hour, a very small amount.

That is nonsense. In the highly automated USA labor commands an extremely high wage relative to highly non-automated countries (or almost any country, for that matter). Compare low-skilled comp in the US to somewhere like India, or even Japan - which has a lot less automation in shops and offices than you might expect, and correspondingly lower wages.

It's impressive how many otherwise apparently intelligent people here comment to state as facts what are really their entirely made up opinions growing from some pet dogma. Even when a statement could be debunked with a minimum of consideration (such as in this example) it gets put forth as if it were a sophisticated truth.

> At the level of automation we've reached in society, low-skilled labor is worth, per hour, a very small amount.

Almost every form of production uses low skilled labor and there is no technological solution yet. If it were possible, there would be a solution. The same is applicable for health care.

The truth is that these companies could easily pay enough but there is a competition to suppress labor wages, the famous race to the bottom.

I think what we need to remember is that there are two issues with your ststement.

1. Companies need consumers to sell to. If no one earns enough money to buy then the companies gave a problem. 2. If people cannot feed themself from working for others then becoming a subsistence farmer and forming tight knit communities is the best way to survive.

People can exist without companies, the reverse is not true.

I think UBI will be pointless because machines will be able to do all the work. Other machines will fix them. Humans will have everything they need or want deliverable by drone and summonable from their phone. Humans will then focus on love, fun, play, and exploring the subjects they are most passionate about.

According to this we were doomed by the 1950s Then in the 70s Then in the 90s Then now

Comparative Advantage, Google/GPT it

Didn't people make similar claims around the industrial revolution?

Historically humans have been much more adaptable than machines. When machinery catches up to human capabilities, it out-competes them and humans find a new economic niche. In a world where machines are more adaptable and beat us to the new niches, where do we go?

Personally, I am finding the sublime in numerical methods and I have always been horrible at manual algebra.

It's like a time travel movie. "We have to go back!"

Machines can do math, sure, and even learn the contours of the systems they represent. That's incredible. But machines lack the human interface that allows infinite abstraction.

So, humans, left with the power of infinite regress, must teach the machines that are so adamantly automating the tasks we deem important as a species.

It is possible now, in 2024, to legislate runaway automation with more human-verified checkpoints and more skilled humans running these checkpoints.

Major integration network paths are verified by the veracity of the integral checks performed on the flowing data.

From here you can measure capacitance, rate of flow, and begin to inspect the data as far as legislation will allow you to.

For any practical scientific purposes, such as analyzing tornado paths and devising a rubric of resource allocation,

You can measure all elements as a wave until a significant event occurs (including malicious data vectors). You can tune a sample rate for that.

With enough people continuously performing validation analysis on data flow, the machines we rely on to achieve our target numbers can begin to rationalize truth and fiction.

Here's the catch: we just have to do it right the first time round.

How does this new niche form? How does the AI know to fill it? How does the AI get access to fill do what it needs to do? How does AI solve the edge? Humanoid robots? Who is going to protect the robots from the people who aim to destroy them? More robots? Are they allowed to kill? How is AI policed? What happens when the AI does something it shouldn't do? What happens when AI decides humans are getting in the way? This is how The Matrix started.

I don't think humans are going to just roll over and accept their new AI overlords.

> This is going to happen to everyone, as in, no person will be valuable enough via the contribution of their labor to survive without subsidies.

A person who is actually working within an industrialized economy produces at least ten times more than what is needed to sustain them. Your attitude is exactly what the communist rulers in the political class and the capitalist rulers in the business and banking class want the serfs to believe. They work together as brothers when it is against the common man.

I say it is completely groundless fear. Even non-talented and non-gifted persons can achieve extreme productivity with modern tools and training.

> The only way around this is to let those people starve or implement UBI.

That's pertinently false.

All it takes in one example to change your comment into something that provides additional value to the thread

Sorry, but: first, the usual criticism is that the one who claims has to show some proof, unless it's commonly accepted. The parent comment didn't. It just says "it's A or B", excluding the viability of every other option. Your criticism is better directed at that comment.

Second, look at Western/Northern Europe, or if you really insist on making this a US-only discussion: look at the period following WW2. It is possible to pay a living wage and to build a social safety net for the unemployed. It just requires the political guts to regulate the market.

Third, you can't just go around making absurd, polarizing comments and demand to be corrected in detail.

I'm not talking about anything other than your comment which was downvoted when I saw it (and check, yup, still downvoted). That comment just says, "nope" -- and doesn't add anything to the discussion, just "nope." Since that comment was saying that the option is not just a binary A or B, you can change the value of the comment from negative (as evidenced by negative votes) to positive simply by engaging slightly further and saying "It is not just A or B, for example C". I'd be surprised if the comment was downvoted then.

I think you are maybe reading more into my reply than I ever intended to put into it. It is a meta comment about a comment.

BS. People with the most money have the most power, make laws, and continually grow more powerful. Labor is extremely valuable, but suppressed by those with more money.

What implicit assumption? Implicit? There are only hard facts. This “inevitability” is only caused by private ownership of real, tangible things as well as nebulous things like ideas (or the reproduction of assets that cost marginally nothing). No one talks about what those who sit their asses on these assets are “worth” economically. Because it’s besides the point. They sit on the assets so they win. Those who have nothing to sell but their labor lose.

And this wasn’t inevitable. But we have made it so.

Now we get to talk about philosophical feel-good nonsense like “decoupling assumptions about a person’s value”. When in an alternate reality we could all share in this plenty equally.

Let’s have a fun future being at the mercy of our arbitrary asset-sitting overlords.

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