A history of front page New York Times today offers an intriguing reason why unemployment continues: companies are investing in teams rather than individuals. It is the most important gap between the two in three decades.
According to the piece, workers are increasingly expensive as equipment is getting cheaper, with the result that technologies advanced are increasingly doing work could otherwise do for us lowly humans.
Yes, people have been getting replaced by machines for a long time. But according to the times, a capital spending rebound this end has coincided with such a weak later work bounce only once before, after the recession of 1982.
The story highlights the technologies of Vista, a company that makes plastic products for equipment manufacturers. The company spent $ 450,000 on new technology last year but has hired two new workers, with a combined annual salary and benefits of $160,000.
(Read about how employers published fewer employment opportunities in April)
According to numbers from the Department of Commerce, business spending on employees in the past two years has grown 2 percent while spending on equipment and software rose by 26 percent. An explanation of why this is happening now is that they are increasing the costs of health care for employees. No need to worry about providing benefits packages for the teams.
"If you're doing something that can be written in a programmatic, algorithmic way, will be replaced by quickly," a Harvard Economist told the times.
(Corporate earnings are, but it is still hiring no)
Then do capital how and work finally balance themselves out? Theoretically, more efficient technology eventually leads to an increase in living standards that will help change of workers in the more profitable fields. It may be true, but the change will be years in the making.
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