August 25,2017, Ho Chi Minh City, Vietnam
Recently I have been debating with friends the question of who is reaping the benefits of technological advancement in the last decade or so. I argued that only the creators and their few employees and investors are reaping the benefits. My friends rightfully pointed out the many benefits that everyone enjoys. Both opinions are correct.
My friends reminded me that nearly everyone in the world can have a cell phone now, and that telephone and internet costs are very cheap. So are the costs of a lot of very helpful and enjoyable consumer appliances such as TV’s and computers. Many other appliances we previously used without the benefit of much technology, such as cars, refrigerators, heaters and air conditioners are not only cheaper to purchase, but with the help of advanced technology, can do their jobs better and far less expensively.
But here is my counter-point: What good is all this if you have only sufficient income to buy a few of the technological necessities, but not enough to provide decent housing, health care, education and other necessities for your family? While many costs have declined, the cost of housing and services such as health care and education have increased dramatically. Meanwhile, the wages of the middle and lower classes have been stagnant for decades now. An iPhone is a poor consolation prize for not being able to afford to go to the doctor or live in a decent home.
The benefits of employment in technology look very exciting if you are a young software developer, but not so promising if you are older, don’t have a college degree, and lost your traditional manufacturing job. As of 2015, only 32.5% of Americans over age 25 had achieved a Bachelor’s degree. College enrollment is dropping, with the primary reason being finances–the growing gap between wages and college costs.
And even if you do have a college degree, the outlook for an economy based on tech jobs pales in comparison to millions of manufacturing jobs lost. Apple employs 116,000, and Google 72,000. The brick-and-mortar employer Walmart employs 2.2 million, but tech companies need fewer workers than do legacy retailers and manufacturers. Amazon employs only 341,000, and with this force already does 1/3 the sales volume of Walmart.
A large part of the value of technology is in the market value of tech companies, which constitutes a major portion of market indices now. Larry Kudlow likes to argue that the working class of Americans also enjoy the benefit of stock ownership. But how significant can that be when the average net worth of the bottom 60% of the population is only as shown below? How much could they possibly earn on such modest capital?
|Bottom 20 Percent||-$6,029|
|Next 20 Percent||$7,263|
|Middle 20 Percent||$68,828|
Both opinions are correct, but for each family the bottom line is what matters. I leave it to statisticians to calculate the plusses and minuses of lower cost items, higher cost housing and services, and stagnant wages, but I think it’s clear that the net result is bleak for the bottom 50% of our population,
Whatever you may think, one thing is clear: the voters who elected Donald Trump did so with great frustration over the failure of government to assure our economy continues to deliver enough good jobs. Frustrations with immigrants, foreign countries, people of other religions, etc., have in large part to do with fear that these folks have taken all the good jobs, a fear our President stoked with his rhetoric. He has yet to show any sign of focusing on the real issues and setting about to fix them.
To those who recognize this political reality, yet choose to dismiss it as not reflecting the very real and dire economic plight for this large segment of our working population, there is only one way to reconcile their views. They choose to regard those disadvantaged as largely a group of wastrels, who only want to live off welfare and do not grasp the reality that taking personal responsibility is the only and certain way to succeed in life. And that no one and nothing can be blamed for their plight, except themselves.