If worker productivity has increased by 500% in X years but worker standard of living has only increased by 100% in the same time that still means workers are being ripped off.
Lets look at those numbers because that's pretty close to what I saw at my previous job.
Except for the little detail of whether they were being ripped off. It's not that the workers were working any harder. (If anything, I think the reverse was true as many jobs changed from actually doing work to assisting the machine doing the work.) Rather, that 500% increase was due to automation. Millions of dollars worth of machinery, I think 4 of us on staff whose job was building stuff we couldn't simply buy (And plenty of tools for us, also.) (I'm not sure of the exact number because as a purely software guy I had basically zero contact with the purely machinery guys.)
Productivity is defined as a production per hours worked. Of course, improving productivity means that workers produce more in the hours that they work. They work less to produce the same number of products.
I assume from your descriptions of this work here and in other threads that what you did wasn't so much automation of your production but mechanization of previously manual operations. Automation and mechanization are terms of art which don't register as being different to anyone not in the business and there is no practical difference for the purpose of our discussion here.
This is a normal and desirable feature of our economy. And it has been since the start of the industrial revolution. In fact, you would not get an argument from me if you said that increasing productivity along with fostering innovation is the essence of the industrial revolution.
What is different now has nothing to do with economics. It has nothing to do with a mysterious, unknown and apparently unknowable technical change that has excluded the technically unwashed from benefiting from this progress. It has nothing to do with the rate of change in the technology, we have been at the same high rate of change for a century or more. We first flew in 1903. We walked on the moon 66 years after that. We explained EMF and the photoelectric effect either side of the turn of the 20th century and one hundred years later we are all walking around with super computers in our pockets.
What has changed is that some of us, like you, have decided that a very few people should share in the rewards from this progress. And for the most part the people that you have picked to receive this bounty from the progress have had absolutely nothing to do with the innovation or the increases in productivity.
In fact, you would deny the people who did develop the innovations and the increases in productivity any of the bounty. And like your relentless and recurring push to increase the costs of medical care in the US to provide a very few people with unearned profits from health care, the people who you picked to share exclusively in the largess from progress are the rentiers, capitalism overhead, the bankers, the insurance companies, the unearned income hangers on. Capitalism works best when we provide incentives for innovation and productivity increases and when we provide disincentives for the rentiers. You seem to be opposed to both of these and to propose that we do exactly the opposite.
I am often asked how I would handle the coming wave of automation that will "put everyone out of work". I would think that this is a better question for you considering that you believe that the shareholders should be handed all of the rewards from innovation and increases in productivity and that the workers should be given none of it. That in fact they deserve to lose their jobs as result of the automation. Doing this will continue to reduce the growth in the economy. This is of course the attitude of other neoliberals and I think that it is an accurate summary of your position.
Of course, by rewarding the shareholders with the gains from the increased productivity you have upheld the traditions of not only the neoliberals but also of conservatives. You are proposing that we reward the one group that contributed nothing to the increase in productivity or to the innovation. And in that you are wrong, upholding the traditions of conservatism, which is always wrong when discussing the problems that we face today.
What we need to do rather than rewarding the non-participants is to increase the workers pay in some way. By paying them more, or reducing the hours that they work, increasing their leisure time. Or by reducing the retirement age. This is how we handled the largest mechanization conversion in history, mechanization of agriculture in the last half of the 19th century and the first half of the 20th century.
We could reverse the trend for the cost a college education to be borne by the students or their parents and to eliminate graduates to having to take out student loans that guarantee decades of not being able to take their place in society because of crushing debt. This is would help the economy in so many ways. It would keep more people in college for longer, delaying by years their need to find a job. Coupled with earlier retirement we could easily cut seven years out of the expected average working lifetime. And we will gain many better educated workers who have experienced college.
How would I pay for all of this? The same way we paid for it when we did this after World War II with the GI bill. With taxes on the rich, by reducing the richest people's effective income. This would have immediate, positive effects. It is would reduce their ability to run up real estate values which is what we do now by providing them excessive amounts of money from profits currently bloated by suppressing wages. This will reduce the housing costs for the workers, and the part of the corporate wage bill that goes to housing costs, the largest single burden on the corporate wage bill.
By taxing the rich we would not only reduce the inflation in the real estate market we would also reduce the inflation in the stock market. I suspect that you remember when the acceptable stock valuation was a price to earnings ratio of 10 to 1. Now it is what, 40 to 1? This is all to justify the huge amount of inflation that has occurred in the stock market as your beloved neoliberalism has converted wages into profits. Prior to neoliberalism the workers and the shareholders shared in the rewards from innovation and the increases in the workers productivity.
And I am not talking about doing this by government fiat like you are, by the government defining that the shareholder, non-participants in the work of the corporation, are the owners of the corporation and that as such they deserve all of the benefits from the innovation and increases in productivity. That the sole purpose of the corporation is to make profits for the passive investors who did absolutely nothing to advance the endeavor, not even, as you have repeatedly incorrectly asserted, the money with which to buy and install the machinery for the expansion and the mechanization, which came from the profits earned by the corporation and its workers, whether retained earnings or the future anticipated profits to pay off a loan or to pay off bonds.
I want to restore the workers ability to negotiate with their employers collectively, to remove some of the current barriers to the unions that with your enthusiastic support have been erected by your fellow neoliberals. The most effective and least contentious way to handle wage negotiations is what is called industrial sector negotiations This is norm in Germany, used to protect both the employees and the employers. The union members' wages are keyed to one important trade in an industrial sector. We built classic capital machines used to manufacture products for sale, our key trade was a machinist. Everyone's wages in the industrial sector are a ratio of the machinist's wages. Tool & die makers earned 12% more than the machinists and janitors made 75% of what the machinists make, etc. all through the company, through the industrial sector, and finally through the entire economy. Then once a year the representatives of the employers and the unions sit down with the representatives of state governments and they negotiate how much the basic wage rates will go up or down depending on how well the industry sector has done, on average. Yes, that is correct, if say the automobile sector was depressed, wages could be lowered in the entire industry sector to give it a boost and to forestall unemployment. It hasn't happened very often, but it has happened.
The reason that it reduces contention between the management and the union is because it takes the negotiation for the wage rate out of the hands of a single company and its union. The union has the same goals as the management, to be successful and to make money. In a recession everybody's wages go down.
It also removes competitive pressures from the wage rate, since everyone pays the same wages in the same industry.
rofit ratio you want we also have to go back to the historical levels of automation. Oops, that's a major cut to our standard of living.
