domingo, 20 de septiembre de 2015

Make sure to have a share of capital so to be able to still participate in the economy.


The share of wages in the economy has been steadily falling for quite a while[1] . It was only a matter of time before growth in the size of the overall economy couldn't offset it.
What is happening is labor is becoming less valuable while capital becomes more valuable. Thanks to automation and globalization, this has probably been going on since the end of the civil war in the US (prior to that, slaves were considered capital so things were a bit confused).
People like to talk about bargaining power and the minimum wage as a solution, but fundamentally the problem is that labor itself really is becoming less and less valuable. More cost effective machines and less labor intensive ways of producing products are essentially pushing workers out of the market.
The only real solution is to make sure everyone has a share of capital so that they can still participate in the economy.

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