[rsalus]

> amount of labor being generated per person has not really changed

not true, labor productivity has been steadily increasing: https://fred.stlouisfed.org/series/OPHNFB

workers are simply capturing less of the economic value generated by their labor.

[missedthecue]

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?

[3D30497420]

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).

[larkost]

> 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?

[rsalus]

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.

[cataphract]

> 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.

[rsalus]

> now consumption is becoming dominated by asset owners

absolutely true. I am not convinced that consumption can be wholly fueled by asset owners though.

[monknomo]

idk, if we look at a lathe, where the factory bought the lathe, this makes some amount of sense (although a closet full of idle lathes isn't worth as much as a factory full of lathe operators making stuff on lathes).

a saas subscription is (per user) probably cheaper than a lathe, easier to stop investment into (no need to resell to recoup some of the loan, just quit paying). A closet full of unused saas subscriptions is worth even less than a closet full of idle lathes.

And yet, these subscriptions make the knowledge worker even more productive (in dollar amounts) than a lathe operator.

obviously a knowledge worker can just subscribe to claude and start building, but building in a vacuum isn't worth a lot more than the closet of saas subscriptions. It's a mutal dependency, and it's the combined efforts of the team that results in this tremendous value add. I wonder if there isn't something there that is above and beyond the capital input and the risks associated with deploying that capital.

But maybe that's an argument for workers of the world uniting and founding their own companies together

[PaulDavisThe1st]

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.

[jacobolus]

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.

[9x39]

Looking at cohorts of workers, automation tools like AutoCad reduce the expertise needed and commodify the job, which reduces leverage and thus per capita wages.

Consider the taxi or unskilled worker examples here:

https://mitsloan.mit.edu/ideas-made-to-matter/a-new-look-how...

All to say, as an individual, individuals rationally try to maximize leverage in a negotiation to capture the increased output. But what happens to classes of workers in different jobs varies. My take is that capital appears to be gaining leverage over wages back from many classes of workers, even if some limited classes of expertise are stable or gaining.

[rwmj]

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.

[Teever]

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?

[WarmWash]

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.

[skybrian]

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.

[forgotaccount3]

> 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.

[limagnolia]

And many laborers have retirement accounts and pension funds that are also capital owners, so they benefit from increases in capital too.

[FatherOfCurses]

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.

[smallmancontrov]

r>0 is not the problem, r>g is the problem, and that one's a lot less morally ambiguous.

[wolvesechoes]

> Increases in labor productivity is a curious thing to think about. Do I deserve more wages for using AutoCad instead of drafting paper?

Please...

> 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?

No, only your boss deserves to gain from you productivity increase, that's obvious.

[nielsbot]

> Should I capture the increased output

yes

[zer00eyz]

The chart you're showing, absolutely reflects the reality of some of the most productive segments of our economy.

Ford now makes more cars, with fewer people. Sears used to have people who took photos, laid out catalogs, opened envelopes (with checks in them).... Amazon has none of that. We replaced switch board operators, with mechanical, then digital switching. More calls routed, fewer people required. go back 45 years and "draftsmen" was a job - replaced by auto cad.

All these industries have seen massive productivity.

Are the people flipping burgers more productive? Plumbers? Welders? Teachers? Nurses? -- to some extent yes, because of technology but not to the same extent as the previous businesses. Anything that qualifies as "service economy" work has not seen the same gains as Ford (see: https://www.aei.org/carpe-diem/phenomenal-gains-in-manufactu... )

[PaulDavisThe1st]

One cause for lack of productivity gains is Baumol's cost disease, which generally affects organizations involving N different people (for N>1) where for one or more reasons N cannot be meaningfully reduced, if at all. Orchestras are the canonical example.

There's a variant of this, however, in activities that are done essentially by 1 person (as is true for most of the examples you mention in your last paragraph). You can improve their individual productivity - more pipes fixed, more joints welded, more patients well-attended to (*) - but in the end you cannot get rid of the individual doing the work in the way automated manufacturing has.

(*) even with a nurse though, this starts to break down for activities where time is a critical part of whatever is being done. Sometimes caring well for a person is primarily a matter of spending time with them, and this is certainly true for teaching as well. In such cases, you cannot make the person "more productive" no matter what technologies you might provide them with.

[boelboel]

Construction notably has had productivity losses since the 80s afaik.

[zer00eyz]

Good call out, and an interesting case I was unaware of.

It looks like this is another facet of the "bitter medicine" that we're seeing around housing in general.

The first article that I saw pointed out that there is a correlation between productivity and regulation (of construction permitting etc). I would believe that because it has a corollary with "housing starts" (a measure of new construction) and its regional strength in the red/south portion of the country.

[legitster]

Fair, but the year over year growth of labor productivity has been really consistent, as has consumer prices:

https://fred.stlouisfed.org/graph/?g=tjto

So in terms of how much consumers are making in relation to their expenses, it's been remarkably steady this whole time.

[rsalus]

yes, but wage growth has not tracked productivity: https://fred.stlouisfed.org/graph/?g=1X020

household expenses have been increasing without commensurate wage growth, resulting in lower savings: https://fred.stlouisfed.org/series/PSAVERT

[bko]

Chart goes up, but you really need to look at percent change. Over the last 25 years it's averaged about 2%

observation_date OPHNFB_PC1

2000-01-01 2.99256

2001-01-01 2.58092

2002-01-01 4.27146

2003-01-01 3.68422

2004-01-01 2.97991

2005-01-01 2.18582

2006-01-01 0.99665

2007-01-01 1.58927

2008-01-01 1.30737

2009-01-01 4.07061

2010-01-01 3.15513

2011-01-01 -0.02491

2012-01-01 0.93870

2013-01-01 0.59941

2014-01-01 1.00795

2015-01-01 1.27023

2016-01-01 0.61567

2017-01-01 1.49513

2018-01-01 1.40965

2019-01-01 2.13337

2020-01-01 5.30657

2021-01-01 2.06281

2022-01-01 -1.46786

2023-01-01 2.13277

2024-01-01 2.91010

2025-01-01 2.25154

[rsalus]

2% is average. 1-1.5% is considered a slump, while anything over 2.5% is considered a boom. for instance, the post-ww2 boom (1947-1972) averaged 2.9%. at that rate of growth, a country's total output per worker doubles in roughly ~25 years.

[ijidak]

Is this inflation adjusted?

[ijidak]

Is this inflation adjusted?