From Tom Dyson, founder, Palm Beach Research Group: The Goldilocks period of American economic growth is over… and it’s because of robots.
The American economy has been the engine of the world economy for a century.
In the 25 years following World War II, the American economy experienced a golden age as a result of rapid technological progress…
As machines improved, the productivity of the workers running those machines improved.
Workers became more valuable and made higher wages. They went out and spent their rising incomes… driving demand for the products and services they were producing.
But that virtuous circle ended in 1973.
Since then, average American earnings are down 13% (adjusted for inflation). That’s even more shocking when you consider:
- Average earnings include CEOs, Wall Street executives, movie stars, and athletes, whose earnings have skyrocketed.
- The cost of big-ticket items like housing, education, and health care have soared (adjusted for inflation).
Translation: Average earnings for the middle and working classes are collapsing. As prices rise, standard of living is plummeting.
In the first decade of the 21st century, no new jobs were created. That’s not true of any other decade since the Great Depression. Even the “stagflation” of the 1970s saw the job market increase by 27%.
Meanwhile, the size of the U.S. workforce has grown by 1 million workers per year. From 2000 to 2010, the workforce increased by 10 million workers.
But there were no new jobs…
According to the Bureau of Labor Statistics (BLS), worker productivity has still increased by 107% since 1973. The pool of labor is getting larger, but the average worker isn’t getting richer…
So, who’s benefiting?
Corporations, business owners, and investors.
Things used to look like this:
Increasing productivity → rising wages → consumer spending → growing economy.
Now, they look like this:
Increasing productivity → profits for businesses → mass unemployment → rich get richer and standards of living fall for everyone else.
The conclusion is frightening: The economic growth America has enjoyed for decades is going to stall.
Now, what does this have to do with robotics? Read our next post…