When was it different? I never saw that in big corporations, only SMBs when the founders were still at the helm.
* A tax on (gross revenue – wages – cogs) with rate (cpi + fedrate) ^ 0.9 would be an excellent start, with an exponential factor that halts ‘shift the tax to consumers through simple price increases’ — the more you earn, the more you have to raise prices, which raises inflation, which raises your future tax by more than your price increase; the more revenue you pay out as wages instead of shareholder dividends, the lower you can set prices, which lowers inflation, which lowers your future tax — and adding the FFER lever allows the Fed to perform their mission to control (price) inflation not only with banks but also with businesses. For example, (8% inflation + 4% fedrate) ^ .9 is ~14.8%, which is a completely acceptable surcharge for businesses having raised prices so high that it caused an 8% inflation year!
Human productivity to wages have kept pace with each other, though, so there is nothing to suggest anything has changed for the human. It is not like the robots are seeking promotions (yet).
Where did you get that idea from?
Maybe there is a new frontier where humans can start to become more productive again. Some say that is AI, but that remains to be seen. For now, we've hit our known limit. There is no longer anything outside of human control, like waiting for a crop to grow, that limits our human productivity. The only limiting us is ourselves, and it may be a fundamental limit.
I don't know what that means. When did we have to stop waiting for crops to grow? The only thing that changed for the production side was requiring less humans as machines could do the work of many laborers.
When we started producing more than basic things like food that are heavily dependent on the environment. In the knowledge-based economy, the only thing that meaningfully stops you from producing continually is you collapsing from exhaustion. However, even if you never got tired, you can still only produce so much per second, if you will, which caps your total productivity. That is the human limit; probably a fundamental one.
Only a tiny, tiny fraction of the population have to wait on crops growing now in order to offer that line of productivity. And of them, like myself, we can now do other productive things while we're waiting. I, for one, work in the tech industry when I'm not farming. Today, 96% of farmers in the USA are productive off of the farm in at least some capacity. Whereas, historically, farmers were busy trying to survive when they weren't being productive on the farm. Many a day were spent in the bush chopping wood so that they didn't freeze in the winter, for example. Interestingly, idle farmers staring to produce salable things during that cold winter downtime is when we first started seeing early signs of human productivity gains over the stagnant agricultural baseline.
Productivity can keep increasing beyond the human limit, but we have achieved that by introducing more and more non-human workers. Humans are already at the very top of their game, at least as we know it. 17th century farmers probably thought they were also as productive as humanly possible, so who knows what the future holds, but for now we have no idea how to make humans even more productive than they already are. We don't have any more obvious "winter downtimes" to expand into. Hence why the measure of human productivity is no longer increasing.
This was recognized a long time ago. It was the basis of the "go to college to make more money" script you may be familiar with if you are old enough to remember. It was well understood way back then that relying on human productivity gains had reached a dead end. The thinking was that colleges would enable people to move away from labor and into leveraging automation, where productivity is effectively unbounded, with college research labs having played and still playing a pivotal role in that, but somehow along the way that got twisted into "go to college to get a job", so here we are... Now people spend god knows how much money to go to college to get the same job, at the same pay, that they would have gotten anyway. Which is pretty hilarious, but also sad.
> When did we have to stop waiting for crops to grow?
part of modern agricultural automation includes year round seasons, which means essentially you are no longer waiting for crops to grow in the way that was first discussed.
This of course is what allows us to have fresh tomatoes year round, and many other fruits and vegetables. Obviously these are not perfect, tomatoes as the example already given, quality of the automated output is significantly less in comparison to the natural - nonetheless we do not wait for many crops to grow in the same way that people did before the 1990s (when computerized climate management, hydroponics and advanced greenhouse tech took off, as some later advances on the already mentioned PLC, and enabled automation in that field of human endeavor)
Until we have sentient robots, all that automation is simply a lever with a human laborer at the end of it.
When do we stop?
Depends on where in the world you're looking. In India, something like 50% of the population works in agriculture. At the scale of India's population that's a significant fraction of the population of the planet, it's more than twice the population of the entire US.
https://wtfhappenedin1971.com/
I mean, it's cherry picked, but still funny to see all those charts.
If you're a CTO, CEO, CxO, you have direct, in depth knowledge to how the company is doing. You also likely have insight into how that translates into free capital to spend on wages. Many companies are not public, and even when companies are, earning reports aren't easy for a line worker to fully understand.
So if you have that knowledge, it's much easier to push back when someone says a wage increase isn't possible. Such as the board, or the CEO (eg, if CTO, or whatever).
This by no means "makes it fair", it's simply that the inequality may be from knowledge, and therefore bargaining power.
Another aspect of things, is that every CxO class worker can agree, their knowledge is very very important, irreplaceable in fact! Upper management, you see, is quite valuable, as of course (from their perspective) "I'm irreplaceable and valuable!". Who doesn't think they have value, after all?
But.. those line workers, or even those engineers, well.. they're like cogs. One as another.
Some might attribute malice to the above thoughts by CxO class individuals, but it can also simply be driven by self-belief in innate value, and by good old ego.
With some reserve on the side, a company can survive bad times and not fire people. This is the kind of behavior employee will appreciate and make some diehard loyal.
But this available money is money not making more. So that's a bad thing these days and so the only easy variable available to survive is to remove excess workforce. It took some time for people to understand loyalty has been one-way only but now employers are reaping what they've sown.
It makes sense to burn reserves and keep good employees around through a temporary cyclical economic downturn. But most of the large layoffs lately have been driven by secular changes that management expects to be permanent.
Oh, and back then a single income could support a working-class family to buy a decent house, two cars and maybe send a kid or two to college.
I agree it's more expensive than ever to afford to raise a family, though. There's also a malaise in the air that I don't think broader society has felt since the late 1970s, too.
Some people might not want to take responsibility for retirement savings in the same way they might not want to take responsibility for providing themselves housing but the alternative is strictly worse.
The only pensions that kind of work is government pensions because they can paper over the structural deficiencies with taxation. But even that has significant limitations as we've seen.
A 401k isn't required to be invested in the stock market. It is advisable but not required.
That said, they can work great in tandem with the stock market.
The Kensington & Chelsea local government pension scheme in London, here in the UK, is an example.
The local authority (not central government) ultimately has the responsibility on paying out these liabilities, but it's one of the few councils that just dumped their pot in to global equities, and as a result they are 200% funded relative to their commitments and have stopped making further contributions.
The money that was flowing into the pension scheme can now flow in to local services.
Asset allocations:
https://www.ft.com/content/87c321ab-e5ac-4a1d-a637-c1f7befcc...
Cutting contributions:
https://www.ft.com/content/67254bff-0e6c-407a-a24a-c34ee217d...
Losing your job is bad; losing your job and your retirement is a nightmare.
I prefer having the money under my control, personally.
The British Army passed on promoting George Washington. Twice.
Nothing changes.
Post-WW2, America had a lock on global manufacturing and was like last man standing in a burned down world.
It was/is an illusion to think that could be a permanent state.
The pre-war employment situation in America looked nothing like post-war. Your race to the bottom narrative is probably better framed as reversion to a multi-polar world with bonus features of higher global prosperity and capability, lower barriers to access foreign markets (whether laborers or consumers), and mature logistics infrastructure. In short - more people than ever want YOUR job, and to live in YOUR house, and have YOUR safety net, such as it is, it’s not just some focus on quarterly reports.