Technology, Competition and the 'Crapification' of Jobs

The ‘crapification’ of jobs is the direct result of the ‘crapification’ of the economy.

Two recent articles shed light on the ‘crapification’ of jobs and the rise of income inequality:

Martin Wolf on the Low Labor Participation as the Result of the Crapification of Jobs(Naked Capitalism)

The Measured Worker: The technology that illuminates worker productivity and value also contributes to wage inequality. (Technology Review, via John S.P.)

The Devilu2019s Chessb... David Talbot Best Price: $3.15 (as of 12:25 EDT - Details) While both articles offer valuable insights into the secular trend of stagnating employment and wages, I think both miss a couple of key dynamics. As a general starting point: if you want to understand the ‘crapification’ of jobs and wages, we have to look at the ‘crapification’ of the economy from the perspective of those who are doing the hiring: the employers.

From the perspective of employees, the ‘crapification’ of jobs boils down to 1) low/stagnant wages for 2) highly structured, boring, repetitive and often difficult work. The decline in the quality, pay and upward mobility of jobs is directly related to the dynamics of globalization, financialization, and the surplus of ordinary labor and capital:

1. Increased competition suppresses wages as employers seek to cut expenses. Rents, taxes, healthcare, government fees, etc. all rise like clockwork; that leaves labor as the largest component that can be trimmed.

2. Cheap capital incentivizes replacing labor with new software/technology.With the cost of capital at all-time lows, the pressure to replace costly labor with new software, robotics, etc. is intense. Software, robotics Crippled America: How ... Donald J. Trump Best Price: $0.10 Buy New $6.73 (as of 04:35 EDT - Details) and related technologies are dropping in price even as their productivity increases.

The reality is that humans can only be pushed to produce more if the tools they’re using become more productive.

The second reality is that for many enterprises, these global pressures boil down toautomate or die, with the purpose of automating being to reduce labor costs and boost productivity, as both are required to survive competition and stagnating sales.

3. The total compensation costs of employees is rising even if wages are flat.Employees (and the vast majority of pundits, most of whom have never hired a single employee with their own money) tend to overlook the overhead costs paid by employers: workers compensation insurance (soaring), healthcare insurance (soaring), disability insurance, unemployment insurance, 401K or pension contributions, etc.

Total compensation costs = wages + labor overhead. If labor overhead costs are climbing, the employer is paying more per employee even though the employees aren’t getting a dime more in wages.

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