One feature of several science fiction stories I read when I was a kid was that in the
future people would have to work less due to the advances in technology. People would
work perhaps 3 or 4 days a week and have the rest of the time off.
So what happened? I know there have been some experiments with four day weeks
but nearly all of us is still stuck with the five day, 40 hour work week. Why?
Productivity increases resulted in staggeringly high corporate profits but shockingly little wage growth (or decrease in working hours, as you note). Discussion of why this happened is probably too political for FQ, but that’s the simple answer to your question. Scifi writers assumed that as the pie got bigger thanks to technology, we’d all need to spend less time tending to it. But instead that growth and the benefits it brings are hoarded by a tiny portion of the population.
There’s two factors.
The first is personal/cultural preference for greater material wealth versus more leisure time. People may ascribe higher value to greater material wealth than you expect them to, so they’ll opt to maintain their working hours and get more money rather than reduce their working hours while still getting the same money,
The second — and I think it’s the dominant factor — is that the increased wealth generated by technological advances largely doesn’t accrue to workers, so they couldn’t trade it for more leisure time even if they wanted to. Real wages have been pretty much stagnant for decades. It’s the owners of capital who largely gather up the gains from technology.
The sci-fi vision necessarily involves a highly socialist world for reasons Babale and UDS1 already state. It would have to involve the value generated by the technology that replaces the person/hours of work being distributed to the people whose working hours have been replaced. We don’t live in that world.
You could, though, if you chose to. The effect of the technology is to enhance productivity — an hour of labour produces much more value than it formerly did. It’s not beyond the wit of humanity to devise legal and economic systems under which a share of that added value accrues to the person providing the labour — numerous ways of doing this suggest themselves, and some of them are used in varying ways in countries that are not the United States. You can label them “highly socialist” if you like, but that tells us nothing about their efficacy or their desirability.
My point here is not to engage in US-bashing. The decoupling of wages and productivity is a global phenomenon, which many see as a failure of markets — i.e., this shouldn’t happen in an efficiently-functioning labour market. You can try to tackle it by measures to make the labour market more efficient, or by accepting that it is happening and using after-market measures to correct for it, or some combination of the two approaches. But it’s not a given to which no response is possible, or to which the measures actually in place now in any particular country are the only possible response.
I think because it still comes down to individuals that deliver results. It is a huge investment to get someone up to speed to deliver in high tech or investment banking. You (the corporate you) want that person to deliver, and really don’t care about burn out as long as you get a couple of good years and ROI out of them.
In other words, one person working 80 hours a week and delivering is worth much more to the corp than 2 people working 40 hours a week. That’s the condundrum
I should make clear I wasn’t saying socialism is bad or impossible. I was simply trying to be FQ about this and using it as a descriptor of the type of system that would be required, and stating that as a matter of simple fact we don’t currently live in a world where that system is applied.
Can you explain this?
i remember jokes in the original 60s Jetsons where George complained about Spacely being a slave driver making him work 4 hours 3 days a week
In a perfect market, if my labour is worth more to employers because of technological developments, I should be able to sell my labour for a higher price. This is why, e.g, someone who operates a mechanical excavator earns more than someone who wields a shovel (even though the cost of the excavator, and quite possibly the cost of training the worker to operate it, is born by the employer).
This is true even if the rise in productivity has nothing to do with any changes in labour itself. For example, if the abolition of European tariffs on widgets mean that the lucrative European widget market is now open to US widget producers, the products of the US widget industry can be sold for a higher price and (all other things being equal) the wages that widget-workers command should go up — their work-product is worth more to employers; therefore they can sell their work for a higher price.
If this isn’t happening, it indicates that the labour market isn’t perfect. Well, duh, no real-world market is perfect. But a fundamental assumption of free market economics is that they can approach perfection to a degree that is useful, and that systemic anomalies like this are caused by their failure to do so . So the free-market economist, faced with this problem, will look at the labour market and ask himself “what is happening in this market, or what isn’t happening that ought to happen, to prevent wages rising in line with productivity, as they should if the market is working?”
There are a lot of issues. One is that not all jobs have changed in productivity. A lot of service based jobs are no better than historical productivity. Restaurants, teaching, medical practices, allied health, law, and so on. And the menial, like cleaning. Many small scale enterprises are not much changed either.
Next, expectations in life change. If you were prepared to live at the same standard of living enjoyed by your forebears you could probably work much fewer hours.
Lots of jobs have not become more productive, they have simply gone. Computerisation of many areas simply wiped out entire legions of jobs. Halls filled with clerks computing monthly bills. All gone. Menial agricultural workers, similarly gone, replaced by mechanisation. But there are oddities. Fruit picking has not much improved. This makes for a two tiered workforce with, often immigrant, workers prepared to work for less than locals. The danger is not that productivity improvements with technology don’t benefit workers so much that menial jobs that can’t be improved turn into the bottom tier of a two tier economy.
Competition in the marketplace mostly pushes prices down in response to productivity. Cars are ridiculously cheap for what you get compared to decades ago. Electronics similarly so. Raw and refined materials are traded commodities with ruthless margins.
There becomes enough free money in life that it starts to chase things that productivity can’t fix. Like real estate. This is where the dream comes unstuck. The portion of family income devoted to paying for that has risen. That is expectations feeding on themselves. Everyone competing for the same little slice of heaven in a manner that simply drives them to work harder in what is a zero sum game. What was once a single income family living well is now a two income family struggling to stay afloat.
Some technologies, apparently convenient and time-saving, end up backfiring due to unanticipated side effects. This is a phenomenon one of my professors refers to as a repeating effect, one type of revenge effect taken from the work of one Edward Tenner.
An example would be the vacuum cleaner, popularized in the mid-twentieth century. Before the vacuum cleaner, one would have to pick up a rug and beat the dirt off it, maybe twice a year. Today, wall-to-wall carpets are ubiquitous… and vacuuming is a weekly, if not daily chore. Huh?
“Machines should work. People should think.” ~ The Paperwork Explosion (1967)
That’s not how it shook out. The above-mentioned film was produced by Jim Henson (of Muppets fame) to hype up the new IBM Selectric Typewriter, an early “word processor” machine. You can’t believe everything you see on TV. IBM knew well that their machines were tools to “increase people’s productivity” (by up to 50%, as one advertisement would have you believe!) rather than decrease working hours.
Typewriters are now found primarily in museums, having been succeeded by the general purpose computer. Computers do lots of work, lots more than they did sixty years ago, no doubt about it. But instead of giving people more time to sit around and think, people spend more time working with computers. Not many people used computers for work in 1967. Nearly one in four employed adults said they used a computer at work when the Census Bureau first asked in 1984. The last time this question was asked, in 2003, over half of all employed adults said they did so. Counting smartphones, which are computers, I would guess more than three out of four employed adults do so today.
Put it this way. Suppose you are a business owner and a new technology makes your employees twice as productive. What do you do with twice as much production?
a. Do twice as much business
b. Fire half your employees
c. Do twice as much business at half price
d. Let employees slack off half the time
e. Cut employee hours in half
f. Cut employee hours in half but double their pay
a) could potentially double profit if the market can bear it. b) may be a more reasonable choice in other cases as you save on payroll expenses, but then have to fire half your employees. c) could make sense in a competitive field. d) is to some extent more realistic than we may like to admit. e) is unlikely to be exercised as it alienates employees who now must work other part-time jobs. f) makes no business sense in any situation, but it is the option that you would need to exercise to satisfy the OP.
~Max
We are probably getting well and truly into GD territory here but this doesn’t make sense to me.
Why would the market value of labour go up if an employer can avoid using that labour because of technological development (the subject of this thread)? In a free market when demand goes down but supply remains the same, prices go down, surely?
And as to productivity, in a free market why would an employer pay me more if the only reason I’m more productive is due to use of technology? I can see why an employer might pay me more if people who can use technology to increase productivity are a scarce commodity. But if I am more productive merely because I am now using a machine, and there is no scarcity of people who could use that machine to obtain the same increase in productivity, then why would a free market pay me more?
I asked the mods to consider where this thread lives. But while it’s here, the OP may be interested in:
That is what the excavator operator versus shovel operator example implied - less people can use the excavator than can use the shovel, so it is argued that the trained excavator operator can sell his labor at a higher price than someone who only knows how to use a shovel.
The principle fails when, as contemplated by the OP, technological advancements are considered at a societal level. Virtually everybody in the modern American workforce can type, for instance. Relatively speaking, typing is not an advantage these days so much as being unable to type is a disadvantage.
“When everyone’s super, no one will be.” ~Syndrome, The Incredibles (2004)
~Max
The example however is very substantially narrower than the proposition.
[Moderating]
This is speculative enough that it’s not really a good fit for Factual Questions. Moving to IMHO.
You don’t need to live in a “highly socialist” world to have at least some of the benefits reach the lower class. After all, Reagan thought (or claimed to think) that unrestricted markets would lead to profits “trickling down” to the lower classes.
So at least in theory, the idea that the wealth that results in increased growth shouldn’t entirely go to the top is not, in fact, a socialist one - even someone as conservative as Reagan agreed that it would be desireable - it’s just that conservatives generally aren’t willing to implement policy that would actually encourage this to happen.
Labor is a good or service; if labor is producing much increased returns, it should have much higher value. In a truly free market, the hypothetical kind discussed in Econ 101, with perfect information, no barriers to entry, etc etc etc - the labor market should be free to set the price of labor based on supply and demand.
However, because we live in a society where not having a job means losing your healthcare, where not having enough income means homelessness, this creates conditions where the demand for employment (from the perpective of potential laborers) is extremely inelastic for most people (and the less money you have the truer this is). So the two sides aren’t equal at the negotiating table, and the market fails to arrive at optimal conditions.
Only because of how skewed the power imbalance is in the labor market. If labor was a model-worthy free market - no barriers to entry, perfect information, equivalent price and demand elasticity - then F would be the only logical choice, because other choices would result in employees ditching your company to find other work.
If we discover a new use for a commodity - let’s say iron - and thanks to a new invention it can now be used to produce more and more valuable products (we’ll call it SuperSteel), the price of iron would of course increase, because sellers of iron know that your steel mill will be making a greater profit and thus will be willing to pay more for iron.
But in the labor market, this historically did not happen, because too many people were desperate for work, any kind of work.
For what it’s worth, this seems to be a shifting trend. Most of the panic we see from businesses around lack of labor is framed as a moral panic. “OH NO!” cry business owners, “no one is willing to work anymore!”. Of course, this isn’t remotely true. Pay employees more while improving their conditions and you’ll find all the employees you need; but the demand for a job has become more elastic (thanks, gig economy!) and companies that decide to stomp their feet and fume about the changing labor market rather than adapting are doomed to failure.
Unless, of course, they manage to lobby the US government to meddle in the market to make demand for emplpyment less elastic (why do you think the battle against universal healthcare is fought with such vigor?).
If an employee working at a bench produces 100 widgets in an hour, and an employee working at a new high tech station produces 1000 widgets in an hour, I - as the factory owner - get more value from the high tech employee.
Let’s use a different example. I offer you iron ore, which you can use to make steel. You can then sell the steel at $100 per ton.
If I offer you 100 tons of iron ore, and you can make 10 tons of steel out of 100 tons of iron, then the value you should be willing to pay for the 100 tons of iron is 10 (tons of steel) times 100 (dollars per ton of steel) minus the overhead costs of producing steel from ore. So, $1000 less cost - as long as I charge you less than $1000 minus overhead cost, you make a profit.
If someone invents a new method of making steel that extracts 50 tons of steel from 100 tons of ore, now 100 tons of iron will actually make you far more money - $5000. But that’s true of other steel mills too, and there’s only so much iron to go around. So if you’re not willing to pay more for iron, another mill WILL pay more, take all your raw materials (for a higher cost), sell tons and tons of steel (making less profit per ton but more money overall), and put you out of business.
The only reason this doesn’t happen with the labor market is that the labor market isn’t fully free and thus cannot arrive at optimal conditions.
Well, as we’re seeing, there IS a scarcity of people to run the machines. Business owners and Republicans talk about this situation endlessly. It’s just that rather than working within the market to make jobs more attractive to employees, large corporations lobby the government to make life more miserable for anyone without a stable job. In other words, they’re artificially skewing the market to get the outcome they want. What do we call it when governments interfere in markets, again? 
It was all a lie, told by the 1%.
Face that, & work with others for better wages.
