Articles from NYT here and here about how we have seen increasing productivity and increasing inequality. Policy-wise, we can cut spending or grow overall…or we can do both. Businesses face the same challenge: grow sales or cut costs. Real wealth is generated by growing sales and, for our country, the greatest improvements will be made by growing GDP.
From the article: “Some people think it’s a law that when productivity goes up, everybody benefits,” says Erik Brynjolfsson, an economics professor at the Massachusetts Institute of Technology. “There is no economic law that says technological progress has to benefit everybody or even most people. It’s possible that productivity can go up and the economic pie gets bigger, but the majority of people don’t share in that gain.”
Problem is that no one seems to know how to increase productivity so that there are benefits to all, not just corporate America, and we’re stuck in partisan policy arguments and not taking significant action. Strengthening the non-1% involves things like raising minimum wage and strengthening unions and making tax policy even more progressive but the list is thin. Growing the economy involves reducing our debt load, reducing taxes, encouraging investment…what I didn’t hear about what strengthening out educational system. Global companies will want our workers if they are smart. I also didn’t see anything about allowing more high tech workers to immigrate into our country. Smart tech workers from Asia are moving to Vancouver because they can’t get permanent residence in the US; smart tech companies are developing offices in Vancouver because its better and closer than having an office Asia.