Friday, August 5, 2016
Real Growth in Wages...
...It's about time.
I can only hope that this is indeed the case. As well as to hope that it might last for more than a quarter or two.
But that's the real question isn't it. Just as one can't help but question how sustainable wage growth can be overall, and not just for relatively limited skill, or technical sectors. The increasingly competitive world is still out there, and there will always more of us every year who will need to find employment. As anyone who understands basic economics will tell you, and as the oil market has amply demonstrated, too much of whatever commodity you might want to consider inevitably creates downward price pressure.
And then, of course, there are the relative trade offs involved with automation. Big initial investment, learning curves, and fluctuating human skill costs, can make it something far less than a guaranteed payoff. That being said, however, doesn't change the fact that it will always be a counterbalance to wage prices; a counterbalance in addition to those already mentioned.
What has always been interesting to me in these kinds of discussions is that profit is a thing unto itself. The fact that it is not considered a "cost," and the only counter weight to it is risk.
I don't want to suggest that risk is no big thing, because it certainly can be. But I do wonder why there is little consideration for its potential as a cost factor. Obviously, as it is not a commodity, it gets an automatic pass for ordinary cost considerations, but that shouldn't necessarily excuse it altogether. In fact, if you think about it, because holders of capital are always working as hard as they can to limit risk, there can be aspects of cost that become unavoidable.
For instance, moving into the creation, and trade, of various financial instruments. Not only is little of actual substance created, and therefore few new jobs, but the very complication, and the involvement of institutionalized capital entities, seems to push a great deal of the risk back onto ordinary taxpayers; while the profit potential remains the siren song it's always been to keep the process going. If you do not see at least social costs involved here then I don't think you are paying much attention. And in this, certainly, we haven't even begun to consider how accumulated capital can game the system, in a lot of other ways, to further avoid risk.
My point here is that profit, without consideration of its potential for costs, has an amazingly unfair advantage over wages, as a factor in a system that's supposed to have its own inner balancing mechanisms; especially now that ever more skill is made electrically retrievable, and easily moved instantly to any place on the globe as software. As a result those who live by profit accumulate capital far in advance of those who live by wages, and we have seen, quite abundantly, how that has disadvantaged the rest of us, as well as the planet, at the benefit of a few. In the past taxes were used to put some cost balancing into this arrangement, but Capitalism, it seems, has won the war on the continued efficacy of that approach. I think it is long past time for the rest of us to consider new options here.