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by jhaglund
4540 days ago
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If we can have an increasing GDP while most of America experiences stagnation (as with the recent recovery) who's to say we can't have decreasing GDP coupled with improving quality of life? (at least for a short period) As you point out, machines are doing far more of the work that workers once did. Another policy of FDR's New Deal was the creation of the 8 hour day (many people still worked 12-14 hour days until then: http://en.wikipedia.org/wiki/Eight-hour_Day#United_States). Perhaps reduced hours allowed more laborers to move into the workforce, and could be a more competitive and cheap way of supporting a broad middle class. |
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http://research.stlouisfed.org/fred2/series/ECICOM
http://research.stlouisfed.org/fred2/graph/?g=qG0
The only "stagnation" that has occurred has been a shift in compensation from taxable wages to untaxed non-wage benefits.
The fundamental problem is that with a drop in labor we will have fewer goods and services. No matter how you slice it, that's a drop in (real, not necessarily nominal) consumption.