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Labor productivity is up. That means workers are producing more per hour for employers. Yet wages are flat. Who captured that extra productivity? And what c
by panarky 9y ago
Labor productivity is up.
That means workers are producing more per hour for employers.
Yet wages are flat.
Who captured that extra productivity?
And what changed in the economy to allow them to capture incremental worker productivity instead of the workers themselves?
- faet 9y agoCompensation has kept pace with productivity. Source: http://i.imgur.com/5mOQARo.png http://i.imgur.com/5mOQARo.png
- panarky 9y agoI don't think so. Source: https://imgur.com/u6ScCfi https://imgur.com/u6ScCfi
- methodover 9y agoHe's saying compensation -- total compensation, not just wages -- has increased. i.e., wages + benefits
- jandrese 9y agoIn other words, all of the extra money is going into health insurance premiums.
- alexasmyths 9y agoThat's rational. We are getting older, and more broken. We are currently 'shifting' what we value in life. If we spend more on doctors, it may be that they provide more value to us. If we'd rather invest in new surgical procedures over some new kind of social network, well, that's what we want, apparently. Of course with healthcare it's always more complicated, but it's rational that we spend more on health if that's what society values.
- toomuchtodo 9y agoThe US spends the most per capita on healthcare out of every industrialized country, with worse outcomes. The only place wages are growing (healthcare compensation) is being siphoned away by parasitic for-profit health insurance companies.
- KGIII 9y agoMaybe a solution is to stop using insurance for things insurance shouldn't be involved with? Do you use your car insurance to pay for a new air freshener? Do you use your home owner's insurance to get a new throw rug? Of course not. Yet, we are using insurance to pay for things like birth control and penis pills. We don't use our car insurance to cover a tune-up or inspection, but we expect our health insurance to cover our check-ups. Stop mandating that the insurance companies cover everything and pay for regular health care out of pocket. Or, you know, go with single payer - which is what I'd suggest. But, expecting insurance to cover regular care just means it is one more avenue where an intermediary is profiting without adding real benefit. Insurance is for when things go wrong, not for regular care. Really, though, I'd strongly suggest single payer.
- jandrese 9y agoIt turns out that covering basic preventative care for "free" actually creates better outcomes. People feel obligated to go for the checkup when they've already paid for it, or more accurately are not discouraged from going because they can't afford it this month. Preventing disease is a lot cheaper than treating it in many cases, and creates a better quality of life for the patient. This is one reason countries with socialized medicine fare so much better on their health outcomes at lower cost.
- KGIII 9y agoSure, but it's not free. They are paying for it with their insurance premiums.
- alexasmyths 9y ago
- pnutjam 9y agoMaybe in the US, but the article indicates this is a worldwide phenomenon.
- panarky 9y agoThat doesn't explain it. Take total US GDP in 1950 and divide by total compensation (wages plus benefits) for all private-sector workers. About 50% of GDP went to workers, and 50% went to owners of capital. That 50% ratio stayed constant until about 1975. The ratio has steadily deteriorated until today, where workers now keep 43% and capital keeps 57%. That 14% is a massive, tectonic shift and shows no signs of reversing.
- Sacho 9y agoWouldn't this be a natural effect of more automation generating wealth rather than direct human labor?
- panarky 9y agoWorkers design and build the robots. Why wouldn't those workers capture the benefits of the robots in the same ratio that workers capture the benefits of other things they produce?
- Sacho 9y agoNot necessarily, because the workers need a capital investment to either design(lab, testing equipment) or build(tools, factories) the robots. This means that at least some portion of the wealth they generate will go to the capital investor. In the case of research, there's a significant investment risk, so the potential rewards are seriously skewed towards the investor. In the case of production, depending on the sophistication of the work the investor could still be taking most of the generated wealth. This is what communism talks about with "seizing the means of production" - without capital, the workers cannot exercise their design & production skills, and thus the wealth they generate is split between them and the capital investor. Workers compete with themselves to design breakthrough machines or improve their work productivity in order to generate more wealth; capital investors naturally get exponential gains by continuing to reinvest in a growing economy. In that sense, there should be a steady increase in the capital/worker ratio of GDP ever since the industrial revolution.
- deleted 9y ago[deleted]
- wfo 9y agoWell sure, CEO compensation has.
- ue_ 9y agoThe Marxian response, although unpopular, is the rate of exploitation has increased. For Marx, technological development leads to more constant capital versus moving capital (i.e more machinery and tools of production) being employed which means that there is a drop in demand for labour-power; while the total value inputs and outputs are identical, only the composition of the value has changed. The falling demand for labour-power means that labour has less of a negotiating place at the table which can lead to real wages decreasing. (Edit: Why are my comments receiving instant downvotes within less than a minute of posting? Who exactly is doing this, without explanation, and more importantly why?)
- mbillie1 9y agoBecause it's HN, where opinions other than "hooray libertarian technocracy" are frowned upon.
- ue_ 9y agoI know what you mean, but I wasn't even espousing an opinion here; I was offering the view of a particular school of economics which has found a recent resurgance in academia from names like Anwar Shaikh and Richard Wolff. I simply can't think what would mean that someone comes along, reads my comment, for whatever reason disagrees with the fact (not the view, as there is very little view in my comment) and then clicks the downvote button. I'm sure I've read that dang has said that downvotes shouldn't be used to mark opinions you disagree with - yet here we are. I would really appreciate explanations, surely this is not above those people who have 500 karma - like I am, they are entrusted with extra powers over the content on the website; perhaps if they behave in such a way antithetical to the idea of Hacker News (that of sharing strangely interesting ideas and perspectives) perhaps they should not have that ability.
- dang 9y ago> dang has said that downvotes shouldn't be used to mark opinions you disagree with I didn't say that. People think this, mainly because they hear it from other people who think this, but it has never been the policy on HN.
- johnm1019 9y agoLargely, the healthcare sector has captured that money. Wages are flat but benefits are up.
- ThomPete 9y agoThe owners of "the capital" captures that.