January 23, 2015

IDEALLY, PRODUCTIVITY INCREASES WILL GET RID OF THEIR INCOMES:

Was JFK Wrong? Does Rising Productivity No Longer Lead to Substantial Middle Class Income Gains? (STEPHEN ROSE, 12/16/14, )ITIF)

Piketty and Saez and other advocates of the message that productivity no longer benefits average American workers are wrong. Lower and middle class workers have gained and are likely to continue to gain going forward from increases in productivity. 

If progressives want to help raise the incomes of average American workers, a robust economic growth strategy with a strong focus on the key drivers of productivity growth - technological innovation and digital transformation of the economy - will be critical. This does not mean that other strategies to ensure more equal distribution of that productivity (e.g. higher minimum wages, more progressive taxes, universal health care, and the like) are not needed to more closely match median and average income growth. But the lesson from this analysis is that progressives ignore productivity growth at their own peril, and more importantly, at the peril of average working Americans.

The technological/digital transformation of the economy is about replacing inherently inefficient and expensive human labor.  If progressives (and conservatives) want to see the benefits of that productivity increase distributed more evenly they need to stop trying to use employment as the means. 

Posted by at January 23, 2015 4:17 PM
  

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