Not all jobs have increased in productivity at the same rate, but I would be surprised if many jobs have not increased productivity in the last 25 and 50 years.
Maybe teaching? It is still often 1 teacher with 20-30 students.
The other examples have seen a number of productivity boosters, for example:
And all of these businesses share the common productivity boosters to overhead like email, accounting software, computer filing, credit card processing, and the fact that every employee has a smartphone.
And I never said different. But the OP was not talking about minor trickle down. The OP was talking about workers being paid a full living wage while working three or four 7ths of a week. That likely involves a substantial societal system of wealth distribution ie substantial socialism. I’m not American - the word “socialism” is not a bogeyman to me. It’s just an apt descriptor.
Market value in a free market is what the market will pay. If there is plenty of labour, the market will (all else being equal) pay less not more. If there are ten people and they are all employed making widgets at 100 an hour and then technology means they can produce 1000 widgets an hour, then only 1 employee is now required and the glut of available labour will drive the value of labour down not up.
The only part of the above which is accurate is where you say “I - as the factory owner - get more value from the high tech employee”. The factory owner. Not the employees. All except one employee is out of a job and competing for fewer jobs with more people.
All this stuff about perfect information and no barriers to entry is part of a free market model that works (somewhat) with everything except labour. The free market model assumes that everything will rise and fall in accordance with market forces. This might be true of machines but it is not true of people. People keep having babies whether there are jobs for them or not. Even with perfect information and without friction, barriers to entry, etc.
For this reason, the whole free market model falls apart when it comes to labour.
I studied Economics, and I’d argue it basically doesn’t work for anything - it’s the equivalent of physics’ spherical cow, not a feature of any real economic system.
Anyways, you’re saying the same thing that I am - the labor market cannot be modeled as a free market.
This is why outcomes predicted by free market models - such as the idea that growth will be allocated among both suppliers and consumers of labor - do not come about.
There’s a difference though between a model that is useful even if highly imperfect (such as the spherical cow) and a model that simply doesn’t work. My view is that the free market model has some use in considering the way a relatively lassez faire economy works in some respects, but crosses a line and simply doesn’t work when it comes to labour.
I would say that this is not the case in a free market capitalist system. In a mature market under capitalism everything generally tend towards a monopoly or a commodity including labor. So unless you are one of the rare highly specialize people who can set your own price (and time), you are just one of many who can do the job and will accept their terms.
OTOH, europe which has a much more socialized system does have vastly more time off than their US counterpart, along with far more job security. While it’s not the 3-4 days a week the OP is asking for, it terms of vacations it is common to get a month off in the summer along with lots more days and weeks. Actually if one tallies up the vacation time it may work out to 4 days a week if spread out.
IMO / IME as both a wage laborer, a former union official, and as a former biz owner …
The labor market is easier to understand accurately if one recognizes it is NOT a market for labor. It is a market for jobs.
Substantially every adult human needs a job. Not every bit of land inherently needs to be deployed for economic gain. Not every bit of capital inherently needs to be deployed for economic gain. But substantially every adult inherently needs to be deployed for economic gain as labor. In order to eat and avoid starving to death. This is true for ditch diggers, doctors, C-suite executives, and everybody in between. They are all “labor”.
So it makes a lot more sense to consider business as “selling” jobs and labor as “buying” jobs. The money flows one way, the product/service flows the other, just like in any purchase/sale transaction.
So what we have is a very, very price-insensitive demand for the product called “jobs”. And the closer we get to the margin, the more price insensitive the demand becomes. Meanwhile there is no substantial guarantee that the supply will be locally or globally adequate, nor that it will be distributed appropriately between the various models (AKA “occupational skill sets”) the consumers = laborers want to buy.
In cases where supply is uncertain or inadequate and demand is large and inelastic what happens? The price is bid up, often way up. In this case the “price” of a job is the inverse of rate of pay and hours worked. So hourly wages crash and work hours per worker are long.
Sure, that’s fair, but it’s worth considering and understanding why that is.
When models in physics hit a value that’s infinitely large or small, they often break - that’s what a “singularity” is.
That’s what is happening here. If I, an iron mine owner, hear about a new technology that will let steel mills make a much higher profit, then I would know that out there will now be steel mill owners who are willing to pay a higher price for iron. I can also safely assume that other iron producers have heard this news as well.
(In the free market model, I know exactly how many buyers I can get at each price, after all).
If buyers take a while to warm up to the new price, that’s no problem; I can sit on my iron stockpile for a while until the steel mills burn through everything they’ve got on hand.
(That’s partially why the supply side of perishable goods is inellastic - you can’t do that with milk or eggs.)
Labor, like perishable goods, is not like that. You can’t store your labor for the future, and most people can’t hold off on getting a job for very long.
Actually, it’s that second point that was impacted by the whole gig economy thing. Suddenly, employees could tell employers whose offer was to crappy to stuff it, since rather than starving they could do rideshares or deliveries until they found a better job.
Thank you everyone for your comments. I had thought it might be because a lot
of the wealth has been going to the top 10% but did not think of the other reasons
posted here.
Well I would argue that a lot of people aren’t working fewer hours because many jobs still need someone physically present during working hours. We still have store clerks, firemen, health professionals, construction workers, and restaurant staff. Technology doesn’t make their work day shorter.
For most jobs, we equate compensation to the hourly value of a person’s labor, not the outcome. Which is why we have such a proliferation of corporate bullshit jobs where we make people do busywork to fill the gaps between real output (if they create any at all).
But then vacuuming a whole house is arguably much easier than beating even one large room sized rug, what with all the ancillary labor that entails, like moving the furniture (twice) and carrying a heavy rug and hanging it so you can beat it. Of course, “room sized” probably wasn’t very big if you had to beat your own rugs.
Who vacuums daily? People with roombas, maybe. Not anyone else I know. My rugs get vacuumed every other week, unless we skip it, in which case they go for a month.
I certainly do not vacuum daily (not even once a week…nowhere near). But, back in the 90s, I had an aunt who did. Her husband used to joke he was going to have her buried with one - a little handheld, if nothing else.
Another answer: we do convert increased productivity to leisure time, but instead of working fewer hours per day, or fewer days per week, we work fewer years per life, and we take all those years off at the end.
My parents retired in their late 50s/early 60s. They have spent the past decade or so in pure leisure and will, all being well, have at least another decade of healthy life to continue taking holidays, going to the theatre, dining with friends, singing in choirs, volunteering etc. This works out as something like 40 years of career, 20 years of leisure. More if they’re lucky.
The friends with whom they do this are in the same boat. This board has its fair share of retirees, I believe, all of whom are looking forward to years of healthy and well-funded leisure. This is a widespread phenomenon.
Whether, with the end of the defined benefit pension and the rise of secular stagnation, it will continue to be a phenomenon is another question. I already expect to retire later than my parents did, and not (actuarially speaking) to necessarily live concomitantly longer. But, for those who were born around the time the OPs science fiction stories were written, a life with a large leisure component is definitely achievable.