There have been interesting posts by Springer, Lang, and Uncle about productivity increases in a couple of other threads.
The reasons for these productivity increases, and their impact are a complicated subjects. In the end, a big part of our current economic problems are due to past productivity increases.
Productivity has increased for a number of reasons:
- We have introduced better tools (especially robots and computes) and process to make stuff, and provide services.
- Workers are better trained.
- We can build stuff, like cars, computers, and houses, with much less labor.
- A lot of stuff can be sold without the need for store clerks, or even stores.
- In addition, because of better materials and manufacturing techniques, things last longer, so people need to buy fewer cars, PCs, and refrigerators. (I haven't seen any number on this, so it may be balanced out by our growing population, though.)
And the productivity increases have had a big impact on us:
- Fewer jobs, especially for the less well educated people who might have worked in a factory, or as a store clerk.
- A need for workers with more education, in order to work with the robots, computers, chemicals, and materials needed to build stuff.
- Well educated workers, in management and control position getting more pay, while less well educated (and often unemployed) people getting let pay, and less work, increasing the income divide.
This also tied up with eh export of jobs form the US, when lower skilled and lower paid workers are needed, and also the reverse, as fewer, better educated workers are needed. We are seeing a little of the latter happen now, as some companies bring some manufacturing back to the US.
Productivity changes are going to be with us for a long time - actually forever. We'll need to learn to deal with them, and to find ways to educate people to do jobs that are now available, and to simply find jobs for people, when jobs that we had in the past no longer exis
Like it or not, many of our population are not capable of learning to do many of the more complex jobs that are available and will be available in the future. I think we are all responsible to care for those folks that can not take care of themselves and their families. This is a moral responsibility that too many of us do not want to accept - yet we encourage these same people to have families
that they cannot support. We are hypocrites.
A jobs-scarce economy has a number of unhappy effects that Americans are not accustomed to.
In this type of economy (commn in Europe and South America) your skills don't count for much. There are doctors and engineers driving taxicabs in the Third World because employment is scarce at all levels. Acquiring employment means WHO you know. It means you either have to be born into a wealthy business-owning family or learn to be a brown-noser par excellence. This is the opposite of a merit-based economy.
Most middle class people will work for government, because government is the only entity that provides steady employment. Government will tend to expand into every nook and cranny of the economy because there will be constant political pressure on government to create jobs.
Private sector employment provides extreme risk. Many people will get only one chance in their lives to work a job. If that job is lost you'll never work again.
This is typical of the jobs-short economy in South America and Europe. Are we ready for it here?