Monday, February 4, 2013

Robotics And Hollowing Out Of The Middle Class

This article describes the employment issues that we face as smart machines are used to replace manufacturing workers.  The use of technology is also spreading to other areas.  One economist joked that Harvard will become a dating center.  Higher eduction will be done over the Internet.  Only a handful of top professors will be needed to provide the lectures.  Middle tier colleges will soon disappear as online education is used to teach less privileged students.

A discussion between the head of the US Autoworkers Union and Henry Ford is cited in this article.  Ford told the union leader that he would not be able to collect union dues from the robots.  The union leader replied that Ford would not be able to sell cars to the Robots.  This must have made an impression on Henry Ford.  He was criticized for raising the pay in his workforce.  He replied to the criticism by arguing that this enabled his workers to purchase his cars.  That argument does not have much force in today's world of multinational corporations.  They can sell their cars anywhere in the world.  

It appears that rising productivity will allow us to produce more of the output that people desire with fewer workers.  Those who manage and own these organizations will benefit from rising profits.  Most of the solutions that are being proposed by governments fail to acknowledge the implications of rising productivity described in this article.

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