For example, if I have a guy digging holes with a shovel, but then I buy a backhoe with an auger, he is now maybe 100x more productive than he was before, but should he get paid more because of that? His life is actually easier now, maybe he should get paid less?
The whole point of this article we’re all commenting on is that it shows workers have been the ones left out in the cold since 1971 and that the high-wealth class in this country has been soaking up essentially the entirety of the resulting bounty from productivity increase.
I just don’t see anyone else claiming it or even mentioning it prior to that comment.
I wasn’t even talking to you.
If you believe I misread something, then quote or link the relevant comment.
You could do without the "should get paid less" part, as it puts part of your argument in the realm of subjectivity rather then objectivity for no real reason other than the tendency towards emotional responses I was mentioning earlier. ("Easier" life is completely subjective.) But the first part of this argument is really good.
And a socialist could have made the exact argument[1]. This is how capitalism progresses.
I’m happy with the conclusion that we’ve reached. Bravos to all involved.
[1] And maybe they are one.
In the original comment, the argument of "should be paid less" was based not on an objective evaluation of productivity components on the part of the employer, but rather on a very much subjective evaluation of the employee's now "easier life".
(It’s not based on how difficult it is either. It’s really based on the labor pool.)
Then automate the job completely? Don’t need to pay anyone for that particular job.
Then if you own the automization equipment to get rid of all the laborers? Don’t need to pay anyone.
Oh, you have automated protecting your property with robots? Well. Now you own your own fiefdom completely.
The big money is made by shuffling financial instruments around, it does not care about longevity or continued existence of a company, and the more the stock is part of ones compensation the more they are going to feel pressured to serve the goals of stock price not the company.
And that goes double for the big investors holding the stock - whose Excel sheets are ultimately the boss of the board members, with the bones and offal for your auguries being analyst statements.
So let's say that by great effort you got great profit this quarter. Hopefully through increased revenues, but often by scuttling efforts or otherwise cutting expenses. You beat EPS ratio.
...The stock price falls, with analysts saying that the higher EPS shows not enough growth, and that you are not good prospect because you need more clients of a specific kind.
So the management will push for expanding that class of clients, maybe expansion elsewhere where normal calculus would say it's ill advised.
But they are compensated according to stock price and resulting ROI when investors sell off that stock or use it as collateral, not according to how well the company is doing.
Then consumer capitalism obviously doesn’t matter any more.
You can see a corollary to this across the whole economy in the Baumol effect, where industries with no productivity gains see labor costs rise as a result of competition with more productive industries for scarce labor: https://en.wikipedia.org/wiki/Baumol_effect
Of course it turns out firms do have a lot of power over employees for various reasons which they use to suppress wages as much as possible but its still bounded.
Another perspective is that workers are also consumers and an economy that doesn't increase compensation will have limited ways to capitalize on increased productivity because there will be little increase in domestic consumption. You can't really export a hole you dug so its good for everyone if workers see benefits from productivity gains: https://en.wikipedia.org/wiki/Demand-led_growth
Simply, there isn't a good reason. That's why we strictly regulate the labour market--we don't like the true price of labour.
The broader reason: while there aren't fundamental reasons for the worker to capture that upside, there are great reasons for citizens to. (I'm using that term broadly.) For a variety of reasons, from Protestant morality to concerns about Communism, modern societies have preferred to reward citizens qua workers than citizens qua citizens.
If the real GDP growth is going to build, service, and maintain the backhoe, that doesnt result in more physical goods for consumers and additional compensation to workers is inflationary.
If true, much if the GDP growth is illusory, composed of busywork. We aren't producing 250% more physical goods like housing and hamburgers per capita than in 1971.