Saturday, 20 March 2021

Where has the wealth gone?

According to the US Economic Policy Institute, productivity increased by 69.6% since 1979, while the average compensation in wages across the entire economy has grown by 11.6% over the same amount of time.

The poor workers face other threats.  According to MIT, nearly half a million jobs were lost to automation between 1990 and 2007 alone. Furthermore, the Brookings Institution states that nearly a quarter of all jobs done by humans today are considered at “high risk” of being lost to automation in some way or another in the coming years. 

As robots and complementary technologies become a fundamental part of the economy, they will drive productivity while ensuring wage growth stagnates as desperate people accept lower-paying jobs.

So where has the excess weaslth gone?

This question is not hard to answer.

Over the last 30 years we have seen the rise and rise of the super-rich. In most western countries, and quite a few Eastern ones,  The ruling classes get richer. Many countries are ruled by an oligarchy.

Those who generate the wealth - by improving their productivity, and taking the risks of being automated out, are falling further behind. This is a basis for social revolution not a happy society.   The ruling classes have failed democracy; voters feel they have a part to play - but whoever is elected makes little difference.  The rich get richer and the poor get poorer.

Unfairness cannot work over the longer term. 

We need to ensure that social productivity is improved alongside economic gains.

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