[Panzer04]

And they will have to go find another job instead. It feels weird but this is how we raise living standards - removing human labor from production (or, in other words, increasing the amount produced per human)

Automation is a game of diffuse societal benefit at the expense of a few workers. Well, I guess owners also benefit but in the long term that extra profit is competed away.

[elmomle]

That's a highly idealized view that I hope we can agree doesn't completely jive with what we see in society today. If a small number of shareholders reap all the profits, the vast majority of the benefit from automation flows to them, and it's even possible for the lives of average people to get worse as automation increases, as average people then have less leverage over those who own the companies.

[rictic]

Inflation adjusted incomes are up in the US across the board. The affordability problem is largely the price of housing because it's illegal to build.

[rswail]

Incomes are up, but the expenses are up as well, especially with the upcoming changes in healthcare for people on the ACA.

Also any comparison of wage growth vs corporate profit growth over the last 30 years shows that wages have not kept pace with the increase in productivity.

So incomes are only just barely keeping up, when they should be booming.

[xboxnolifes]

How can inflation adjusted income be up and there still be an affordability crisis?

[haizhung]

Housing is not part of the inflation calculation. There IS a housing inflation crisis.

[gnz11]

Household income is more than just wages. Household income can go up while wages remain stagnant or shrinking because other pieces of the pie are increasing (e.g. work benefits, investments, money from the government). https://fredblog.stlouisfed.org/2016/09/sources-of-household...

[eru]

The price of housing can rise even faster than incomes.

Housing is only a part of the basket used to measure inflation. Housing's price rose faster than the weighted basket average, some other goods and services rose slower or even fell.

[pbhjpbhj]

Accommodation costs are the first part of any sensible measure of inflation. If you're not factoring in housing then you're fudging the figures.

[hdgvhicv]

Many people don’t see housing inflation - if you bought a house in 2020 and house prices were up 80% since then it doesn’t affect your housing costs, especially in the US where mortgage rates are fixed for length of term even if interest rates sky rocket.

[eru]

Yes? Who says otherwise?

As long as accommodation isn't 100% of your basket of goods and services you use to measure inflation, accommodation can rise in price faster (or slower) than the basket. This ain't exactly rocket science.

[woooooo]

Housing, schooling, healthcare, daycare, food.

Samsung TV purchasing power has skyrocketed, though, so there's that.

[WalterBright]

Inflation also corrodes your savings and investments.

[samiv]

Yet more and more people are struggling to afford even basic necessities and one can only dream of the luxury of the 50's when a single working class person was able to pay and cover for housing, car, family and even have enough for leisure. Where has all the economic surplus gone? Right...to the bourgeois, the capital owning class that exceedingly extract more and more of the wealth generated by the society.

[powerapple]

because the developing world is producing a lot of things except the housing.

[eru]

They also don't produce haircuts.

[phyzix5761]

On average, most large cap stocks (MSFT, GOOG, AAPL, etc) are owned by millions of retail investors through 401Ks, mutual funds, ETFs, and direct ownership.

[BobbyJo]

Median net worth at 40 years old in the US is less than 150k. Most Americans benefit very little from share prices rising, at least directly.

[couchridr]

Of the US stock market half is owned by 1%.

https://fred.stlouisfed.org/series/WFRBST01122

[zipy124]

Actually I believe this graph is half of US-owned equities and mutual funds is owned by the top 1% of Americans right? This doesn't include other extremely large holders such as sovreign wealth funds like norway/singapore or very large pension funds like the ontario teachers fund etc....

The USA is rather unique in its low pensions compared to countries in the EU or Australia (notable for its high contribution rates).

[robocat]

Tech founders (part of the 1%) own about 2% of the stock market.

About 18% is owned by foreign entities.

[wisty]

> If a small number of shareholders reap all the profits

It's not greater profits but lower costs (and prices) that matter here.

[adrianN]

Lower costs only translate into lower prices if sufficient competition is there. That is not true for many markets

[dr_dshiv]

That’s the big difference in China. When there is competition for everything —> prices are low. Not a lot of profits for investors, though…

[eru]

Which markets do you have in mind?

I'm all in favour of lowering barriers to entry, too. We need more competition.

Be that from startups, from foreign companies (like from China), or from companies in other sectors branching out (eg Walmart letting you open bank accounts).

[wisty]

Untrue, most of the time. Even with a monopoly, there's still a demand curve.

Would you rather sell one widget for $1000 or 1000 widgets for $10? Does the answer depend on costs?

[WalterBright]

The ROI for a large corporation tends to be around 10%.

[eru]

Everybody can be a shareholder in a publicly traded company. It's pretty easy.

If you want to spin up some conspiracy theory about elites snatching up productivity gains, you should focus on top managers.

(Though honestly, it's mostly just land. The share of GDP going to capital has been roughly steady over the decade. The share going to land has increased slightly at the cost of the labour share.

The labour share itself has seen some shake up in its distribution. But that doesn't involve shareholders.)

[rswail]

Everyone with excess disposable income can be a shareholder in a publicly traded company.

The oligarchy of the CxOs and boards and cross-pollination has led to concentration of the rewards of companies into the their hands, compared to 40 years ago.

All the productivity gains have not gone to labor, its predominately gone to equity and then extracted via options and buy backs to avoid tax which means public service and investment has gone down.

The craziness of the USG borrowing to fund tax cuts is the ultimate example.

[eru]

> All the productivity gains have not gone to labor, its predominately gone to equity [...]

What your evidence for that? See https://www.brookings.edu/wp-content/uploads/2016/07/2015a_r... for a good account.

> [...] and then extracted via options and buy backs to avoid tax which means public service and investment has gone down.

You seem very confused about how capital markets work. Are you also suggesting buy backs are morally different from dividends?

In any case, the whole point of investing (at least to the investor) is to eventually get more money back than you put in. Returning money to investor is not a bug, it's the point.

> The craziness of the USG borrowing to fund tax cuts is the ultimate example.

Blame voters.

[droopyEyelids]

There have been times historically where that was true but all productivity gains have been captured by the .1% for the past few decades.

[Rzor]

And someone don't need to look further than this quite interesting report by the Rand Corp: https://www.rand.org/pubs/working_papers/WRA516-1.html

We document the cumulative effect of four decades of income growth below the growth of per capita gross national income and estimate that aggregate income for the population below the 90th percentile over this time period would have been $2.5 trillion (67 percent) higher in 2018 had income growth since 1975 remained as equitable as it was in the first two post-War decades. From 1975 to 2018, the difference between the aggregate taxable income for those below the 90th percentile and the equitable growth counterfactual totals $47 trillion.

[WalterBright]

Income is the wrong measurement. Total employee compensation is the more accurate one, and averages around 145% of salaries.

Total employee compensation includes things like the value of employer provided health insurance.

[eru]

What's your evidence for that?

[Cthulhu_]

It's narrow vs wide views. Wide views, automation and the like has improved the economies massively. But narrow views, people have lost their jobs, had to retrain and basically restart their career, and some never found another job.

This isn't just automation btw, but also just business decisions, like merging companies, outsourcing, or moving production elsewhere - e.g. a lot of western European manufacturing has moved eastwards (eastern Europe, Asia, etc). People who have a 30+ years career in that industry found themselves on the proverbial street with another 10+ years until their retirement, and due to trickery (= letting their employer go bankrupt) they didn't even get paid a decent severance fee.

[_heimdall]

I've not seen a correlation between automation and wealth, though there is an extremely string correlation between energy use and wealth.

I don't think its automation that increases living standards. We increase living standards by consuming more energy, and that often comes along with increasing the amount of costs we externalize to someone else (like pollution or deforestation, for example).

[red-iron-pine]

> It feels weird but this is how we raise living standards

yeah but it's clear that we're not doing that, and are arguably going the other direction as hard as possible

[j16sdiz]

> removing human labor from production

Karl Marx would argue this evil because this take away the value and job satisfaction from the labour.

https://en.wikipedia.org/wiki/Marx%27s_theory_of_alienation

[eru]

You might notice that Karl Marx isn't exactly the pinnacle of economics.

Quoting Marx is a bit like quoting Aristotle or Ptolemy.