I've been mulling over articles and statistics for a few months and have this half-assed theory on why greater income inequality is inevitable. Please comment and tell me how wrong I am.
As our economies employ more "knowledge workers" and less labour-intensive positions, intelligence becomes the limiting factor for whether a person lives paycheque-to-paycheque or comfortably above six figures. The above average in intelligence will see their particular talents rewarded handsomely the further the services/knowledge economy develops while the majority of the population sees their wages stagnate or, at best, stay level.
Here's the BLS's chart of
private sector gross job gains and losses by industry, seasonally adjusted. Finance and IT have taken a large hit, but they're emerged relatively unscathed compared to construction, manufacturing and goods producers. That's whether you look at the raw numbers or as a percentage.
The second half of this lame theory comes from a maxim we all learned in childhood: When life gives you lemons, make lemonade. Thus, companies are busily making use of the current state of the economy as a convenient reason to cut underperforming and easily made redundant staff. (The "excuse" of the poor economy is particularly useful in countries like Canada where terminating workers is not a straightforward process.) These companies are not turning around and hiring younger, smarter or faster workers to replace those on their way out - they're automating, pushing more work upon fewer people or simply doing without. Of course, this is their perogative: The corporation's goal is not to employ, but to reap profit.
The end result is an ever-shrinking pool of employed who stay that way by possessing skills and knowledge that is not easily automated or done without. Because of how small that pool of workers is, they will have the ability to command ever greater salaries. Everyone not in that esteemed labour pool stagnates.
Long term, I can only see this issue being solved in one of three ways.
Solution #1: Eugenics. Make the population smarter. (Which it is getting, despite what you'd think - but we may need to speed up the process.) Make most everyone a useful employee. Of course it takes more than sheer intelligence coded into your genes to be a productive member of society, but the lack of that intelligence is nearly a veto against a person.
Solution #2: Income redistribution on an unprecedented scale. The top 20% giving half of their annual salary via taxes to the bottom 80%.
Solution #3: Extreme interventionist and protectionist economic policies. This must be done as a coordinated global effort to work. Making it equally as expensive to automate or use foreign labour will give corporations an incentive to employ locals.
Note: Don't read too much into how anything above is phrased. I'm not advocating any of them - they all have massive downsides. I just don't see alternatives. But maybe I've got everything wrong to begin with.
Facebook
Twitter