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The problem here is that the comparison is between median wages and total productivity, without demonstrating that the median worker is in any way responsible f

The problem here is that the comparison is between median wages and total productivity, without demonstrating that the median worker is in any way responsible for the increased productivity. If the median worker isn't responsible for the increased productivity, are they entitled to a share of the work of other people? I'm not necessarily saying they aren't, just that such an argument should be made explicitly.

occamrazor 8y ago
Indeed, _total_ productivity should be compared to _average_ wages. The difficulty is that, at the higher end of income, the distinction between wage, business income (eg consultants), and investment income (eg stock based compensation) is not clear.
expertentipp 8y ago
Nowadays within couple of hours while sitting in front of the computer I can plan and book my holidays, submit a bank transfer, submit tax declaration, buy new clothes, and extend the insurance. Unthinkable until the late 90s. This technological leverage is created pretty much by a "median worker". Where the margins from this turbo-raise of productivity go? Because they certainly don't vanish neither reach the worker.
- leereeves 8y ago
  The people who created that technological leverage are far from median workers, and earn many times the median wage.
  - expertentipp 8y ago
    More and more aggressively creation and maintenance of these systems are being outsourced and nearshored to the cheapest available location, ideally employing on-demand workforce.
    - leereeves 8y ago
      Even when the work is sent to other locations where the median wage is lower, the workers are still far above the median in those locations.
  - hannasanarion 8y ago
    So I, the tool maker, deserve ALL of the extra profits you generate via the use of my tools, from now until the end of time?
    - leereeves 8y ago
      I'd hardly call the time since the invention of computers and the Internet "from now until the end of time". And what the toolmaker "deserves" is decided in negotiations between the toolmaker and the people who pay for the tools. It seems they've decided that these tools are worth quite a lot.
      - close04 8y ago
        The average worker today produces far more in an hour than the average worker from the '70s did in the same time. And while I get that the increase is not uniform across all workers I am sure it is an increase. What is the reason for keeping wage tied to time rather than productivity or work, other than a quest for ever increasing profits? And if the wage can't be increased why not decrease the time? This way the worker gets a reduction in time for the same wage and the employer still gets a hefty productivity increase over a few decades ago for the same wage. I see some countries have actually kept wage and productivity tied to each other and it doesn't look like it was detrimental to the economy. I'd appreciate dissenting opinions in a more productive format like counterarguments rather than a wave of downvotes.
      - hannasanarion 8y ago
        It seems you're telling me that stagnating wages for increased productivity is fine, because the extra productivity is from better tools, not more work, which means the workers don't deserve the extra revenue from their increased output, is that right? So if you're a farmer, and you're given a new kind of tractor that doubles the yield of your fields, you'd be totally fine if your landlord just took the extra crop for himself, leaving you with exactly the same amount as you would have had without the new machine?
  - brmgb 8y ago
    > The people who created that technological leverage are far from median workers, and earn many times the median wage. If the issue was, as you are implying, one of distribution, we should be seeing income inequality growing while the wage share of the national income stagnates. That's not at all what is happening. The wage share has been steadily declining since the 80s. The truth is that shareholders not workers got the lion share of the productivity increase.
- rejschaap 8y ago
  You can do all of this in one evening instead of over the course of a month. That is how it reached the average person. The average worker did not contribute to making this happen, but they benefit a lot.
- raducu 8y ago
  The margins go in the consumer's pocket and that of the owner of the services you are consuming + you are consuming higher quality services/products. Also, as the consumer, you pay with your own free time: every time you self check-out, do your own accounting, tax fillings and so on, you are doing (a bit less) work that was done by an employee in the past. So the margins mostly go to the owners of the services you are consuming (i.e. tax haven accounts).
  - gowld 8y ago
    Self checkout doesn't cost free time. Lines are shorter than in past and you still have to wait if a clerk scans your products.
    - Illotus 8y ago
      Self checkout at as implemented in local shops has odd value proposition for the shopper. Basically it is more hassle and marginally faster for the benefit of allowing the shop owner to fire some people. Compare this to handling bank transfer at your own home computer or mobile phone versus going to the bank during business hours.
fnordsensei 8y ago
Rather than being an ethical or moral question of whether they "deserve" (i.e., they're only deserving of it if they are directly responsible for it) a better wage or not, why not just look at it like an indicator that the overall economy might be becoming less healthy? A low-income earner is more likely put any extra money they acquire towards the local economy rather than, for example, lodging it in the Cayman Islands for storage. This is good for keeping the local economy healthy, from which may come the next person to create a technological breakthrough. We generally want the median person to have money to spend with our businesses rather than slowly edging towards living in a slum.
- lazyjones 8y ago
  > why not just look at it like an indicator that the overall economy might be becoming less healthy? Because it isn’t. We have other indicators for that and GDP growth is one of them. Median wages are affected by so many factors that they invalidate such conclusions. Also, wages aren’t the only money available for spending, there‘s capital income too.
  - adrianN 8y ago
    Low-income earners probably don't have much capital income that they could spend on the local economy.
    - fnordsensei 8y ago
      The modern equivalent of "let them eat cake."
    - lazyjones 8y ago
      Let's not resort to such vage speculation. Low-income earners definitely have more to spend than unemployed people and unemployment is rather low right now in the USA.
      - fnordsensei 8y ago
Vinnl 8y ago
> If the median worker isn't responsible for the increased productivity, are they entitled to a share of the work of other people? I usually turn this question around: as a programmer, I'm responsible for a greater share of productivity than some people in different functions who are paid less. However, I do not work harder, do not sacrifice more, do not hate my job more - more likely the opposite, even. Why am I entitled to a larger share of profits than other people? (I understand that the system generally "works better" this way. However, since we're talking about being entitled to something, I wonder if there's a moral argument that can be made.)
- zeroname 8y ago
  > Why am I entitled to a larger share of profits than other people? You aren't entitled to profits at all. Profits come after cost. You're cost. You cost more because the demand for your labor versus the supply of your labor raises the price of your labor. Don't assume this will go on forever, the next bust may well wipe out the huge wage advantage of today's tech workers.
  - Vinnl 8y ago
    Sure, I'm not assuming this will go on forever. The main point of asking my question was to get a grip on a moral framework for justifying... I don't know, private property?
    - zeroname 8y ago
      1) No one treats everyone else's property as well as their own (tragedy of the commons). 2) The fact that you are paid more ensures that society's demand of your kind of labor is met, resulting in a more efficient allocation of resources. If everyone instead was paid the same, there would be less incentive to get better training or to perform undesirable work, resulting in less efficient allocation of resources.
      - Vinnl 8y ago
        Yes, that's the reason we're doing things this way, but that's not a moral reasoning. If it were, that would mean being opposed to e.g. being taxed to take care of the disabled. I'm wondering whether there's a way to reconcile those two in the same moral framework.
deogeo 8y ago
Shall we also discuss how much of other people's work capital is 'entitled' to? E.g Uber's executives are very well compensated, and are nothing but middle-men. Middle-men that are easily replaced, as demonstrated by the Uber clones in cities that banned Uber.
- leetcrew 8y ago
  if they're as easily replaced as you say, they won't be very well compensated for long.
  - deogeo 8y ago
    'Easily' in terms of labor. But it was only possible to create an opening for that labor with the use of law - i.e. collective action. Just like how FAT32 is also easily replaced, yet Microsoft reaped patent profits from it for decades. There are countless other such parasites.
  - raxxorrax 8y ago
    It seems pretty naive to think these market mechanisms are the primary factors affecting wages. Maybe this is the case in the US, certainly not in Europe. Otherwise teachers and caregivers would earn at least as much as engineers. Top managers wages are completely fictitious. Investors generally don't care though, since it is basically nothing compared to turnover as a whole.
    - hattar 8y ago
      In the US there’s an excess of teachers (unsure about caregivers) and it seems the market forces are expectedly causing low salaries. I believe as an American I’m missing some important context to understand this comment.
      - gowld 8y ago
        There's an excess of programmers too. Oh, good programmers are scarce? Good teachers are scarce too
snarfy 8y ago
Nowhere on that page did I see a chart showing the dramatic increase in CEO pay since 1950. The money is still there, it just going to the top. Are you saying the CEOs are solely responsible for this productivity gain?
- moosey 8y ago
  > If the median worker isn't responsible for the increased productivity, are they entitled to a share of the work of other people? I saw this as an argument against profit. If you changed 'the median worker' to 'the capitalist', it might show up in 'The Communist Manifesto'.
- CoolGuySteve 8y ago
  There’s a whole section about redistributing executive pay. Maybe you should look harder.
spamizbad 8y ago
> If the median worker isn't responsible for the increased productivity, are they entitled to a share of the work of other people? With most salaried, white collar jobs your payscale is almost completely decoupled from your productivity. You are paid based on the market value of your skills and experience. You're essentially a commodity. We see this in the software industry all the time: There's little salary difference between a "good" and "mediocre" programmer. The so-called "10x" engineer, myth or not, is likely to make just 10% more than their peers, if even that, not 1000% more.
- treis 8y ago
  > The so-called "10x" engineer, myth or not, is likely to make just 10% more than their peers, if even that, not 1000% more. That doesn't seem right. An entry level programmer will make around $100k. There are definitely engineers out there that are paid more than a million a year
  - aketchum 8y ago
    To me, a 10x programmer is thought of in relation to their peers
    - tabtab 8y ago
      If you have a good development stack that is properly tuned to your niche, a good portion of the work should be domain analysis, not raw coding. If your bottleneck is coding, your stack is probably wasteful, bloated, and/or buggy, creating unnecessary busy-work. Orgs often over-follow fads or grab trends from industries that don't match their own, rather than tune or clean their existing stack. Rewarding those fast at unnecessary busy-work usually just multiplies unnecessary busy-work.
  - distances 8y ago
    I know several programmers that are many times more productive than their peers, when compared to least-performing peers it's easily 10-20x. They make a little bit more, I'd guess 20-30%. Not in the US, but I'm sure this is quite common and compensation anywhere near reflecting the performance is a rare exception.
mcv 8y ago
Can anyone be said to be responsible for the increase in productivity? It's probably largely a matter of increased technology and automation, as well as cultural improvements like the way we work and organise work. These are mostly collective efforts. Sure you can point to any individual employee and declare "you didn't invent or buy that computer that makes you work more efficiently, so why should you get more money?", but the CEO or shareholders didn't invent the computer either, and buying a PC is a fairly small expense, so why should they be the ones to benefit from the increased productivity? Because they hold power and the regular employee doesn't. I think that's the only real explanation for this discrepancy: CEOs and shareholders have power, while the regular employee doesn't, and that power imbalance means more money goes to the CEO and shareholders.
- taneq 8y ago
  > Sure you can point to any individual employee and declare "you didn't invent or buy that computer that makes you work more efficiently, so why should you get more money?" It's less about that as it is about your three remaining employees being rewarded handsomely for the highly productive work they do on their computers, but the seven who you let go and who now work at Walmart are no longer paid wages that are coupled to that increased productivity.
  - crdoconnor 8y ago
    Wages are not correlated to productivity in the slightest. Productivity simply establishes a floor on wage levels.
    - mcv 8y ago
      And that's the core of the problem. Wages used to go up with productivity, but not anymore. Plenty of money is being made, it just doesn't end up in the wages of regular employees. A couple of years I came across a claim that compared to 50 years ago, the ratio between a CEO's salary than that of a regular employee of the same company, has shot up by one or two orders of magnitude. CEOs make way more than they used to, regular employees don't.
eli_gottlieb 8y ago
>If the median worker isn't responsible for the increased productivity, are they entitled to a share of the work of other people? If the median worker isn't responsible for the increased productivity, it follows trivially that you can do something to increase the median worker's productivity, earning higher profits, until all firms in your sector do it and you all end up having to compete for the increasingly productive workers by raising wages. https://www.epi.org/publication/understanding-the-historic-divergence-between-productivity-and-a-typical-workers-pay-why-it-matters-and-why-its-real/#epi-toc-8 https://www.epi.org/publication/understanding-the-historic-d... The most likely inference, a priori, for where this process has broken down is: employers aren't having to compete for workers very hard any more, so competition doesn't push labor prices up.
RobertoG 8y ago
>>"[..] are they entitled to a share of the work of other people?" The work of other people? Is productivity increments the result of some people working harder instead of and increment in technology and knowledge?
tabtab 8y ago
Re: If the median worker isn't responsible for the increased productivity, are they entitled to a share of the work of other people? Other people? The rich? Or even machines? There are several questions raised here. Even if we go with the presumption that the rich are simply more productive/useful and "deserve their income", that still doesn't answer the question of why inequality is increasing. Did the rich simply start to get significantly better than the rest around 1980? Instant evolution? Or perhap the economy is becoming "winner take all". The more you control the more you CAN control. For example, the big tech co's have huge patent portfolios in which to sue any upstarts from entering their turf. Their big competitors have their own giant portfolios to defend against each other's patent claims via counter-suits. Thus, smallbies are essentially locked out, forced into niches. Even if we assume they deserve their big incomes, it could still pose a risk to democracy as the rich buy influence. The Supreme Court more or less has concluded money is free speech, meaning the rich (and corporations) can speak louder than the rest. Their point of view gets splattered everywhere and counter arguments from regular folks get drowned out. And there is campaign donations, which is legalized bribery, which the Court also upheld. The rich can use their influence to get even more politicians and judges in play which favor the rich, creating a runaway train of influence. "Slippery Slope" is often considered a debate fallacy, but we are sliding into inequality in practice. Sliding does sometimes actually happen. Unions are being gradually stripped of power by politicians and the courts, for example. Therefore, even if one accepts that the rich deserve most their money, their spending power may have the practical side-effect of undermining democracy and equal representation. And, how many mansions, Maseratis and swimming pools does one "need" to be sufficiently rewarded? 7?, 20?, 82? I thought it really telling that John McCain lost track of how many mansions he owned. If we assume it's machines that have generated the increased total wealth, then obviously machines don't want nor need money (although I'm working on a Greed-A-Tron). So who gets it? The owners of the machines typically do, but are we just rewarding them for simply owning more machines than you and I? Owner take all?
- darawk 8y ago
  > Did the rich simply start to get significantly better than the rest around 1980? Instant evolution? Or perhap the economy is becoming "winner take all". The more you control the more you CAN control. For example, the big tech co's have huge patent portfolios in which to sue any upstarts from entering their turf. Their big competitors have their own giant portfolios to defend against each other's patent claims via counter-suits. Thus, smallbies are essentially locked out, forced into niches. The argument is not quite "winner take all" but as the article said "winner take most". We have increasingly become a knowledge economy. Technology has created a multiplier effect, where the productivity of the top decile or so of performers is magnified significantly by software and other things, making them have even more of an edge over the bottom 90%.

occamrazor 8y ago

Indeed, _total_ productivity should be compared to _average_ wages. The difficulty is that, at the higher end of income, the distinction between wage, business income (eg consultants), and investment income (eg stock based compensation) is not clear.

expertentipp 8y ago

Nowadays within couple of hours while sitting in front of the computer I can plan and book my holidays, submit a bank transfer, submit tax declaration, buy new clothes, and extend the insurance. Unthinkable until the late 90s. This technological leverage is created pretty much by a "median worker". Where the margins from this turbo-raise of productivity go? Because they certainly don't vanish neither reach the worker.

leereeves 8y ago
The people who created that technological leverage are far from median workers, and earn many times the median wage.
- expertentipp 8y ago
  More and more aggressively creation and maintenance of these systems are being outsourced and nearshored to the cheapest available location, ideally employing on-demand workforce.
  - leereeves 8y ago
    Even when the work is sent to other locations where the median wage is lower, the workers are still far above the median in those locations.
- hannasanarion 8y ago
  So I, the tool maker, deserve ALL of the extra profits you generate via the use of my tools, from now until the end of time?
  - leereeves 8y ago
    I'd hardly call the time since the invention of computers and the Internet "from now until the end of time". And what the toolmaker "deserves" is decided in negotiations between the toolmaker and the people who pay for the tools. It seems they've decided that these tools are worth quite a lot.
    - close04 8y ago
      The average worker today produces far more in an hour than the average worker from the '70s did in the same time. And while I get that the increase is not uniform across all workers I am sure it is an increase. What is the reason for keeping wage tied to time rather than productivity or work, other than a quest for ever increasing profits? And if the wage can't be increased why not decrease the time? This way the worker gets a reduction in time for the same wage and the employer still gets a hefty productivity increase over a few decades ago for the same wage. I see some countries have actually kept wage and productivity tied to each other and it doesn't look like it was detrimental to the economy. I'd appreciate dissenting opinions in a more productive format like counterarguments rather than a wave of downvotes.
    - hannasanarion 8y ago
      It seems you're telling me that stagnating wages for increased productivity is fine, because the extra productivity is from better tools, not more work, which means the workers don't deserve the extra revenue from their increased output, is that right? So if you're a farmer, and you're given a new kind of tractor that doubles the yield of your fields, you'd be totally fine if your landlord just took the extra crop for himself, leaving you with exactly the same amount as you would have had without the new machine?
- brmgb 8y ago
  > The people who created that technological leverage are far from median workers, and earn many times the median wage. If the issue was, as you are implying, one of distribution, we should be seeing income inequality growing while the wage share of the national income stagnates. That's not at all what is happening. The wage share has been steadily declining since the 80s. The truth is that shareholders not workers got the lion share of the productivity increase.
rejschaap 8y ago
You can do all of this in one evening instead of over the course of a month. That is how it reached the average person. The average worker did not contribute to making this happen, but they benefit a lot.
raducu 8y ago
The margins go in the consumer's pocket and that of the owner of the services you are consuming + you are consuming higher quality services/products. Also, as the consumer, you pay with your own free time: every time you self check-out, do your own accounting, tax fillings and so on, you are doing (a bit less) work that was done by an employee in the past. So the margins mostly go to the owners of the services you are consuming (i.e. tax haven accounts).
- gowld 8y ago
  Self checkout doesn't cost free time. Lines are shorter than in past and you still have to wait if a clerk scans your products.
  - Illotus 8y ago
    Self checkout at as implemented in local shops has odd value proposition for the shopper. Basically it is more hassle and marginally faster for the benefit of allowing the shop owner to fire some people. Compare this to handling bank transfer at your own home computer or mobile phone versus going to the bank during business hours.

fnordsensei 8y ago

Rather than being an ethical or moral question of whether they "deserve" (i.e., they're only deserving of it if they are directly responsible for it) a better wage or not, why not just look at it like an indicator that the overall economy might be becoming less healthy? A low-income earner is more likely put any extra money they acquire towards the local economy rather than, for example, lodging it in the Cayman Islands for storage. This is good for keeping the local economy healthy, from which may come the next person to create a technological breakthrough. We generally want the median person to have money to spend with our businesses rather than slowly edging towards living in a slum.

lazyjones 8y ago
> why not just look at it like an indicator that the overall economy might be becoming less healthy? Because it isn’t. We have other indicators for that and GDP growth is one of them. Median wages are affected by so many factors that they invalidate such conclusions. Also, wages aren’t the only money available for spending, there‘s capital income too.
- adrianN 8y ago
  Low-income earners probably don't have much capital income that they could spend on the local economy.
  - fnordsensei 8y ago
    The modern equivalent of "let them eat cake."
  - lazyjones 8y ago
    Let's not resort to such vage speculation. Low-income earners definitely have more to spend than unemployed people and unemployment is rather low right now in the USA.
    - fnordsensei 8y ago

Vinnl 8y ago

> If the median worker isn't responsible for the increased productivity, are they entitled to a share of the work of other people? I usually turn this question around: as a programmer, I'm responsible for a greater share of productivity than some people in different functions who are paid less. However, I do not work harder, do not sacrifice more, do not hate my job more - more likely the opposite, even. Why am I entitled to a larger share of profits than other people? (I understand that the system generally "works better" this way. However, since we're talking about being entitled to something, I wonder if there's a moral argument that can be made.)

zeroname 8y ago
> Why am I entitled to a larger share of profits than other people? You aren't entitled to profits at all. Profits come after cost. You're cost. You cost more because the demand for your labor versus the supply of your labor raises the price of your labor. Don't assume this will go on forever, the next bust may well wipe out the huge wage advantage of today's tech workers.
- Vinnl 8y ago
  Sure, I'm not assuming this will go on forever. The main point of asking my question was to get a grip on a moral framework for justifying... I don't know, private property?
  - zeroname 8y ago
    1) No one treats everyone else's property as well as their own (tragedy of the commons). 2) The fact that you are paid more ensures that society's demand of your kind of labor is met, resulting in a more efficient allocation of resources. If everyone instead was paid the same, there would be less incentive to get better training or to perform undesirable work, resulting in less efficient allocation of resources.
    - Vinnl 8y ago
      Yes, that's the reason we're doing things this way, but that's not a moral reasoning. If it were, that would mean being opposed to e.g. being taxed to take care of the disabled. I'm wondering whether there's a way to reconcile those two in the same moral framework.

deogeo 8y ago

Shall we also discuss how much of other people's work capital is 'entitled' to? E.g Uber's executives are very well compensated, and are nothing but middle-men. Middle-men that are easily replaced, as demonstrated by the Uber clones in cities that banned Uber.

leetcrew 8y ago
if they're as easily replaced as you say, they won't be very well compensated for long.
- deogeo 8y ago
  'Easily' in terms of labor. But it was only possible to create an opening for that labor with the use of law - i.e. collective action. Just like how FAT32 is also easily replaced, yet Microsoft reaped patent profits from it for decades. There are countless other such parasites.
- raxxorrax 8y ago
  It seems pretty naive to think these market mechanisms are the primary factors affecting wages. Maybe this is the case in the US, certainly not in Europe. Otherwise teachers and caregivers would earn at least as much as engineers. Top managers wages are completely fictitious. Investors generally don't care though, since it is basically nothing compared to turnover as a whole.
  - hattar 8y ago
    In the US there’s an excess of teachers (unsure about caregivers) and it seems the market forces are expectedly causing low salaries. I believe as an American I’m missing some important context to understand this comment.
    - gowld 8y ago
      There's an excess of programmers too. Oh, good programmers are scarce? Good teachers are scarce too

snarfy 8y ago

Nowhere on that page did I see a chart showing the dramatic increase in CEO pay since 1950. The money is still there, it just going to the top. Are you saying the CEOs are solely responsible for this productivity gain?

moosey 8y ago
> If the median worker isn't responsible for the increased productivity, are they entitled to a share of the work of other people? I saw this as an argument against profit. If you changed 'the median worker' to 'the capitalist', it might show up in 'The Communist Manifesto'.
CoolGuySteve 8y ago
There’s a whole section about redistributing executive pay. Maybe you should look harder.

spamizbad 8y ago

> If the median worker isn't responsible for the increased productivity, are they entitled to a share of the work of other people? With most salaried, white collar jobs your payscale is almost completely decoupled from your productivity. You are paid based on the market value of your skills and experience. You're essentially a commodity. We see this in the software industry all the time: There's little salary difference between a "good" and "mediocre" programmer. The so-called "10x" engineer, myth or not, is likely to make just 10% more than their peers, if even that, not 1000% more.

treis 8y ago
> The so-called "10x" engineer, myth or not, is likely to make just 10% more than their peers, if even that, not 1000% more. That doesn't seem right. An entry level programmer will make around $100k. There are definitely engineers out there that are paid more than a million a year
- aketchum 8y ago
  To me, a 10x programmer is thought of in relation to their peers
  - tabtab 8y ago
    If you have a good development stack that is properly tuned to your niche, a good portion of the work should be domain analysis, not raw coding. If your bottleneck is coding, your stack is probably wasteful, bloated, and/or buggy, creating unnecessary busy-work. Orgs often over-follow fads or grab trends from industries that don't match their own, rather than tune or clean their existing stack. Rewarding those fast at unnecessary busy-work usually just multiplies unnecessary busy-work.
- distances 8y ago
  I know several programmers that are many times more productive than their peers, when compared to least-performing peers it's easily 10-20x. They make a little bit more, I'd guess 20-30%. Not in the US, but I'm sure this is quite common and compensation anywhere near reflecting the performance is a rare exception.

mcv 8y ago

Can anyone be said to be responsible for the increase in productivity? It's probably largely a matter of increased technology and automation, as well as cultural improvements like the way we work and organise work. These are mostly collective efforts. Sure you can point to any individual employee and declare "you didn't invent or buy that computer that makes you work more efficiently, so why should you get more money?", but the CEO or shareholders didn't invent the computer either, and buying a PC is a fairly small expense, so why should they be the ones to benefit from the increased productivity? Because they hold power and the regular employee doesn't. I think that's the only real explanation for this discrepancy: CEOs and shareholders have power, while the regular employee doesn't, and that power imbalance means more money goes to the CEO and shareholders.

taneq 8y ago
> Sure you can point to any individual employee and declare "you didn't invent or buy that computer that makes you work more efficiently, so why should you get more money?" It's less about that as it is about your three remaining employees being rewarded handsomely for the highly productive work they do on their computers, but the seven who you let go and who now work at Walmart are no longer paid wages that are coupled to that increased productivity.
- crdoconnor 8y ago
  Wages are not correlated to productivity in the slightest. Productivity simply establishes a floor on wage levels.
  - mcv 8y ago
    And that's the core of the problem. Wages used to go up with productivity, but not anymore. Plenty of money is being made, it just doesn't end up in the wages of regular employees. A couple of years I came across a claim that compared to 50 years ago, the ratio between a CEO's salary than that of a regular employee of the same company, has shot up by one or two orders of magnitude. CEOs make way more than they used to, regular employees don't.

eli_gottlieb 8y ago

>If the median worker isn't responsible for the increased productivity, are they entitled to a share of the work of other people? If the median worker isn't responsible for the increased productivity, it follows trivially that you can do something to increase the median worker's productivity, earning higher profits, until all firms in your sector do it and you all end up having to compete for the increasingly productive workers by raising wages. https://www.epi.org/publication/understanding-the-historic-divergence-between-productivity-and-a-typical-workers-pay-why-it-matters-and-why-its-real/#epi-toc-8 https://www.epi.org/publication/understanding-the-historic-d... The most likely inference, a priori, for where this process has broken down is: employers aren't having to compete for workers very hard any more, so competition doesn't push labor prices up.

RobertoG 8y ago

>>"[..] are they entitled to a share of the work of other people?" The work of other people? Is productivity increments the result of some people working harder instead of and increment in technology and knowledge?

tabtab 8y ago

Re: If the median worker isn't responsible for the increased productivity, are they entitled to a share of the work of other people? Other people? The rich? Or even machines? There are several questions raised here. Even if we go with the presumption that the rich are simply more productive/useful and "deserve their income", that still doesn't answer the question of why inequality is increasing. Did the rich simply start to get significantly better than the rest around 1980? Instant evolution? Or perhap the economy is becoming "winner take all". The more you control the more you CAN control. For example, the big tech co's have huge patent portfolios in which to sue any upstarts from entering their turf. Their big competitors have their own giant portfolios to defend against each other's patent claims via counter-suits. Thus, smallbies are essentially locked out, forced into niches. Even if we assume they deserve their big incomes, it could still pose a risk to democracy as the rich buy influence. The Supreme Court more or less has concluded money is free speech, meaning the rich (and corporations) can speak louder than the rest. Their point of view gets splattered everywhere and counter arguments from regular folks get drowned out. And there is campaign donations, which is legalized bribery, which the Court also upheld. The rich can use their influence to get even more politicians and judges in play which favor the rich, creating a runaway train of influence. "Slippery Slope" is often considered a debate fallacy, but we are sliding into inequality in practice. Sliding does sometimes actually happen. Unions are being gradually stripped of power by politicians and the courts, for example. Therefore, even if one accepts that the rich deserve most their money, their spending power may have the practical side-effect of undermining democracy and equal representation. And, how many mansions, Maseratis and swimming pools does one "need" to be sufficiently rewarded? 7?, 20?, 82? I thought it really telling that John McCain lost track of how many mansions he owned. If we assume it's machines that have generated the increased total wealth, then obviously machines don't want nor need money (although I'm working on a Greed-A-Tron). So who gets it? The owners of the machines typically do, but are we just rewarding them for simply owning more machines than you and I? Owner take all?

darawk 8y ago
> Did the rich simply start to get significantly better than the rest around 1980? Instant evolution? Or perhap the economy is becoming "winner take all". The more you control the more you CAN control. For example, the big tech co's have huge patent portfolios in which to sue any upstarts from entering their turf. Their big competitors have their own giant portfolios to defend against each other's patent claims via counter-suits. Thus, smallbies are essentially locked out, forced into niches. The argument is not quite "winner take all" but as the article said "winner take most". We have increasingly become a knowledge economy. Technology has created a multiplier effect, where the productivity of the top decile or so of performers is magnified significantly by software and other things, making them have even more of an edge over the bottom 90%.