The Atlantic – Derek Thompson: “The collapse of the middle class is greater than the Great Recession. But what’s really behind our 30-year crash? One statistic, often ignored, begins to provide a clearer picture. It’s the productivity, stupid.”
“We know where the jobs are going — to machines, software, and foreign workers. We also know why they’re going away. Global competition gives companies the incentive to be more productive, and technology and foreign labor gives companies the means to be more productive. Automation lets one employee handle the work of three, or three hundred. Off-shoring lets ten Asian workers receive the salary of one. As these corporate Getting-Things-Done strategies make the typical worker increasingly expendable, real wages have stagnated, or declined, to their 1950s levels. What’s so bad about 1950s wages, anyway? you may ask. They worked for the 1950s. We could make do with them today if the price of everything — from socks, to televisions, to medicine — moved at the same rate. But that is not what’s happened. Instead, socks got cheaper, televisions got more complex, and health insurance got much more expensive.”
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