It used to be the case that once you got a job and were reasonably competent at it, you would get regular pay increases that at least kept pace with inflation. And if the economy expanded and your company’s profits improved, you might expect to share in the benefits and this enabled you to aspire to a more financially secure life.
Not anymore. The CEO’s of corporations are brutally frank that in these times, if you want a salary increase you need to transition to a better paying job.
Now, executives of big U.S. companies suggest that the days of most people getting a pay raise are over, and that they also plan to reduce their work forces further.
…The moderator asked the panel whether there would be broad-based wage gains again. “It’s just not going to happen,” Taylor said. The gains would go mostly to technically-skilled employees, he said. As for a general raise? “Absolutely not in my business,” he said.
But there will always be a need for some jobs that do not require technical skills but are essential nonetheless. What will happen to those people? It looks like they will fall farther and farther behind in terms of income.
“The gains would go mostly to
technically-skilled employeesme and upper management and investors” Fixed it.Revolution?
A revivals of militant unions?
Complete collapse of the USA as a functioning society?
The USA, in particular, though other countries are not to far behind, seems intent on hollowing out its middle class, leaving a small technical class, a plutocracy and a massive underclass. This seems like a recipe for disaster.
The complete greed and total lack of concern for his employees that Taylor shows is damning in general terms but suggests that the long-term survival of his company is dubious.
Well-run companies generally take care of their employees. If he is this cavalier about employee welfare, I would assume that he is looting the company for short-term returns and not investing in the long term.
Of course, too many CEOs seem to think that long term strategic planning means two quarters into the future.
@ 1 naturalcynic
I wonder what the turnover for his tech staff looks like?
… except for being a CEO, which requires no technical skills, just a willingness to step over the bodies of the fallen.
Many of the CEOs I’ve worked with got there by virtue of being the last person standing.
The solution is fairly obvious. Shift from hierarchical, top-down capitalist organisations of labour to democratic Worker Cooperatives.
Well, either that or have a great big vicious societal collapse and see what emerges after the end of it.
While there has always been tension between the needs of Labour for wages that allow a fulfilling life, not just sustenance and the needs of Capital for profit, many (most?) business owners managers once saw a connection between the two.
What is the point in making X widgets per day if the market can only buy X-Y per day?
Wages that were once sufficient to feed, clothe, house, entertain a family and allow a little to be put to one side needed to increase so people could afford the new inventions -- Microwaves, Cell Phones, Computers, internet and cable connections, as well as maintaining their previous expenditure.
If wages are driven too low, who is there to consume production?
2 & 4 have hinted at part of the problem, but missed the target. It is my belief that much of the problem is caused by the modern managerial style that sees the owners of a business so far removed from any day to day oversight that they have no idea what is happening until the dividends dry up. Often, by then, it is too late.
It seemed an interesting co-incidence that just after reading this post I came upon a link to 2018 Report of the Special Rapporteur on extreme poverty and human rights on his mission to the United States of America http://undocs.org/A/HRC/38/33/ADD.1 .
It seems relevant but it is not pleasant reading.
Mano,
Re your last sentence.
I can’t think of any job that, sooner or later, won’t be performed by an AI or a robot. When I was at business school in the 70s, the prediction was for a 24 hour week by 2000 which has become reality for many employees. However the futurologists didn’t anticipate the emasculation of unions and the triumph of neo-liberal economics. The outcome is closer to dystopia than utopia.
@ 8 rjw1
Keynes was postulating 15 hours a week sometime back in 1930.
a 24 hour week…which has become reality for many employees.
Where?
Around here it is more a 24 hour week per job. Work weeks are variable for the legions of part-timers many of whom juggle two or three jobs.
jrkrideau
Yes, to clarify. The original prediction was that employees would live comfortably with a 24 hr/week job, of course they can’t.
Got some news for you: Not even that.
I’ve been a software developer for 22 years now and in that time I have gotten a raise… twice, I believe. 2007 and last year. Otherwise it’s been nothing but a dance to find a new job when the companies I’m working for decide to be abusive or just reward people for finishing a project by laying off the staff.
I don’t understand why the owners don’t realize that this is a bad way of doing things. A society like that will be a powder keg, ready to blow at any moment. You’d think that people with a lot of wealth would have a vested interest in creating a stable society, so their wealth would remain safe, but I guess not.
LykeX, @ #12: Well, the problem is that the benefits (to the rich) of hollowing out the middle class are concrete and immediate, whilst the costs are both uncertain and in the future. Like most people, the rich have strong time preferences (possibly even stronger than most, considering that they have more wealth to gain or lose, and less practice at deferring gratification). They would rather make 10% on their stock portfolios this year at the risk of a massive recession (or even being dragged off to the guillotine) at some indeterminate point in the future, than settle for 2% this year with a reasonable expectation of that continuing indefinitely.