Comment by missedthecue
3 hours ago
Increases in labor productivity is a curious thing to think about. Do I deserve more wages for using AutoCad instead of drafting paper?
- The amount I'm working hasn't increased. Still an 8 hour day.
- My job honestly is easier than it used to be; certainly less menial.
- Strictly speaking, the education requirement is actually lower. It's easier and a lower bar to learn to become a decent designer in AutoCad than to learn to effectively use old drafting tools (even though the formal four year engineering degree still takes four years).
But it's also true that in spite of this, my output is higher. Should I capture the increased output or should the innovators of the tools? What about the firms that invest in procuring these tools and production technology? Should the customers capture the increased output through lower prices? Or should the innovators, firms, and customers all get less, and instead my wages should get bigger?
Salaries aren't about what someone "deserves" or "should earn".
Those in control will try to capture as much of the return as possible. How much value the worker captures is based on their relative power (ability to move to a higher paying employer, scarcity of skillset, laws such as minimum wage, etc).
> Or should the innovators, firms, and customers all get less, and instead my wages should get bigger?
In almost all of the cases the "innovators" are themselves workers whose share of the outcome has been dropping. And the "customers" have never gotten a piece of the profits; we are already past the point where reduced prices would have happened (competition) in this system.
And I think that by "firms" you really mean some combination of executives and investors/shareholders. That is where the gains have been centralized. Do you really want to argue that management and investors deserve to have more of the gains? What have they done that makes them so much more valuable than similar groups in bygone days?
the argument is productivity gains are increasingly driven by technological advances, which are spurred by capital investment. for example, if a company purchases software that increases their accountants productivity by 5x, should those accountants immediately be paid 4-5x more?
I would contend that the accountant should not - it should flow to who bore the cost of the input (capital owners). however, if you starve labor of those gains, it destroys the consumer base that capital relies on to buy its goods and services. therefore, society requires broad wealth distribution to function, which implies some level of redistribution by the state is needed.
> it destroys the consumer base that capital relies on to buy its goods and services. therefore, society requires broad wealth distribution to function
This is becoming less and less true, because now consumption is becoming dominated by asset owners, to the point that a good jobs report is bad news because it means the fed are less likely to drop rates and through that inflate asset prices.
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I think it is pretty clear that knowledge workers are internalizing the gains that newer and newer tools (and higher and higher rungs on the global economic ladder) have provided them, while at the same time capturing less of the overall gains that are being had.
Basically it's taking fewer bodies to create more value, and that value creation is so intense that even workers getting "ripped off" feel like they are making bank.
If using autocad does indeed make you more productive, then your 8 hours per day of labor generates more value for your employer.
Where the benefits of that end up is one of the most fundamental questions of politics. As you note, there are arguments for it to flow to any combination of several different groups. Deciding how much goes to each group is what politics is all about, in the end.
More productive companies earn more revenue and can offer more compensation to try to get better workers. That's why software engineering pays more than many other occupations. It's not because they're nice.
But for this to work, employers have to believe that hiring better workers matters.
Productivity is just aggregate output of the economy divided by the number of people-hours worked. You can argue about if that's a useful thing to measure or if the measurements themselves are accurate or if you should capture more of the output, but at root it's very simplistic. If you can use AutoCAD to generate more drawings than using paper which you (or your firm) sells for the same price per drawing, then your productivity did go up. Is that meaningful? Less certain.
In practice what happens is that on average the tool-user's wages go up slightly but most of the jobs in the field are eliminated, and the resulting large profit mostly goes to managers and financiers.
> Should I capture the increased output
You do capture the increased output by benefiting from a society where the cost to build safe buildings has drastically reduced.
Just because you don't get an immediate financial benefit doesn't mean you haven't benefitted from the increased output.
And many laborers have retirement accounts and pension funds that are also capital owners, so they benefit from increases in capital too.
Assuming you don't retire during one of the periodic market bust cycles. I think a lot of workers would rather see more return on that increase in capital now.
r>0 is not the problem, r>g is the problem, and that one's a lot less morally ambiguous.
> Should I capture the increased output
yes
Thats a good list of questions here’s another good thought provoking line of thinking:
As someone trading labour for a wage should I adjust my productivity to match the tools I’m using? That is to say if I’m using CAD should I bother using the tool to raise my productivity? Or should I just match my old hand drafting productivity rates? Should I attempt to raise my productivity rates with these new tools to meet or exceed the best rates from my coworkers?
What can we do to align my interests with those of my employer?