[xzjis]

What's crazy is that productivity per employee just keeps increasing year after year, but successive neoliberal governments continue to lower corporate taxes. They should be doing the exact opposite! Taxes should be raised as productivity increases! AI is just one more tool that gradually increases productivity, among others.

[Armisael16]

Why should productivity and corporate tax rates be correlated at all, up or down? The link there is not obvious.

[smallmancontrov]

Insofar as productivity is a sign of the system getting imbalanced towards capital, the system should be pushed back and the everyman thrown a bone.

[CrazyStat]

To what extent is productivity a sign of the system getting imbalanced towards capital? That relationship is not at all clear to me.

[smallmancontrov]

It has a finger on the long term trend of decreasing relevance for labor and increasing relevance for capital as factors of production, but it's certainly not a metric I'd choose and that's why I tried so hard to steer towards something better.

One can imagine a world where productivity increases, the need for old jobs is reduced, but newer, better jobs more than replace them because the economy is experiencing genuine growth. Self-serving capital rhetoric will push you to always imagine it this way, self-serving labor rhetoric will push you to never imagine it this way, but good policy lies in figuring out what's actually happening in aggregate and responding accordingly (the framing I tried to push).

[immibis]

It's not productivity itself; it's the decoupling of productivity from wages. If I'm creating 3 times as much value as my equivalent in 1970, why aren't I getting paid 3 times as much inflation-adjusted money, hmm? It's not even unfair to shareholders - they'd also get 3 times as much as in 1970. But instead they get 10 times as much and I get 0.7 times as much, or something like that. What's the deal?

[seneca]

> If I'm creating 3 times as much value as my equivalent in 1970, why aren't I getting paid 3 times as much inflation-adjusted money, hmm?

Because that increase in productivity comes almost entirely from technology owned by your employer.

To look at it in a contrived example, let's take textiles. There is a textile factory employing weavers who weave fabric by hand, and the factory owners buys a new automated weaving machine that makes the weavers each 3 times more productive. The maker of the machine created the technology, and is paid for it, the owner of the factory made the investment to bring the technology, and profits from it.

This is basically exactly what has happened to modern productivity.

[com2kid]

Except in technology where the gains come from my personal investment in skills. I'm spending hours every week keeping up with the field of software engineering. I've been investing in learning my craft since I was 14 or so.

I'd argue the same goes for many types of digital creators, artists, video editors, animators, and so forth.

[CrazyStat]

Ok, but that’s not what the post I replied to was saying.

[jarpschope]

If productivity is increasing but not average salary, then by definition the additional wealth is being taken by the owners of capital.

[kortilla]

No it’s not. If the increased productivity is realized by multiple industries, then they all compete on price and the price of their goods comes down. That means the consumers of the product capture the gains in productivity.

Farmers using machinery instead of labor has meant cheaper food for everyone, not rich farmers.

[jarpschope]

This is possible in theory.

I think that if we look at inflation-adjusted productivity, and inflation-adjusted average income, then that would indeed prove increasing inequality, right?

I believe the chart in this link is adjusted by inflation. Showing overall the same trend:

https://www.epi.org/productivity-pay-gap/

[alexashka]

Right, because governments do anti-trust and ensure fair competition. We all agree.

When your argument boils down to discussing fantasies in a fantasy world, you have a bright future as an economist indeed.

[kortilla]

If productivity increases, margins increase. When margins increase any business in a competitive environment will have to lower its prices in response to any other business lowering prices that got those automation gains.

Productivity increases result in lower prices in any competitive market.

[danhon]

* competitive

[lm28469]

> but successive neoliberal governments continue to lower corporate taxes.

By itself it wouldn't be a problem, the problem is at the same time they raise taxes for people doing OK, and salaries are mostly stagnating.

[LogicFailsMe]

True, but good luck getting people to vote for their own interests. It's not hard to fix this. It really isn't. But it's nearly impossible to get through to people. As someone else said, at some point you have to make a choice about where you want to live and do what it takes to get to that place before you drown in the sea of marching morons.