The Implications Of Rising Productivity And Labor Practices On Employment And Wages

The increased use of labor saving technology is decreasing the demand for labor in many occupations.  The relationship between employees and the corporation has also changed.  The concept of permanent employment has become archaic.  Our large organizations increasingly use temporary employees to get much of their work done.  Some temporary workers do well in this scheme, but on average, compensation and benefits are worse for most of them.  Job security is a thing of the past.  Everyone is a temporary employee and responsible for managing their own career.  Government has also contributed to the lack of employment security.  Labor laws have been weakened and it has become more difficult for workers to form unions.  There is no good news about wages and employment opportunity in this article.

There many good references in this article for those who are interested in the future of employment and wages.  Part of the problem, however, is the result of our transition from an industrial society to to a services economy.  For example, 9 out of our 12 largest employers in the US are in retail or food service.  Wal-Mart is our largest employer.  It employs more Americans than our 12 largest manufacturers combined. Around 50% of the products purchased by consumers at retail are imported.  This has a dramatic effect on wages because there are few opportunities for most employees in retail organizations to move up on the corporate ladder.  Moreover, the average term of employment ranges between 1.5 years in food services and 3 years in retail.  This contrasts markedly with the organization structure of large manufacturing firms that used to provide most of our employment. To make matters worse, the growth of retail chains, and chain restaurants, has led to a reduction in the number owner operated firms that used to serve local communities. The opportunity to start up a small business to serve local consumer is more difficult than it used to be, and the profits leave the local communities as they are sucked up by the chains.