Productivity drives prosperity. The more stuff you can produce, the more you can be paid and the more you can consume. I suspect, however, that some people see this as at least a double-edged sword. After all, if there are 100 units of work to be performed, and the productivity of workers doubles from 10 units per day to 20 units, then you need require fewer workers and people get laid off.
You might also have a similar reaction when you go to the grocery store or Target and see self-checkout machines. Yeah, they probably help you save money by reducing the store's costs, but it also means fewer people with jobs.
This story in the New York Times, which has been in the top 10 of most read articles for the past several days, illustrates why this is wrong. The article is about bankers that make $2 to $3 million per year and still run out by the end of the year. For most people, for whom $50-$75K is probably sufficient to take care of their needs, this may seem ludicrous. But the reality is that the more money you make the more stuff/services you require, such as:
The more productive people are the more they produce. The more they produce the more money they make. The more money they make the more stuff you want -- even millionaires don't think they have enough to attain everything they desire. Thus, workers that are laid off due to productivity improvements should be able to find work that inevitably results from the increased demand that results from the workers that are being paid more.
If you need any more convincing, just consider the fact that the richest countries are also those that are most technologically advanced and have the highest productivity. Doing more with less is the secret to prosperity.
You might also have a similar reaction when you go to the grocery store or Target and see self-checkout machines. Yeah, they probably help you save money by reducing the store's costs, but it also means fewer people with jobs.
This story in the New York Times, which has been in the top 10 of most read articles for the past several days, illustrates why this is wrong. The article is about bankers that make $2 to $3 million per year and still run out by the end of the year. For most people, for whom $50-$75K is probably sufficient to take care of their needs, this may seem ludicrous. But the reality is that the more money you make the more stuff/services you require, such as:
- Private school
- Mortgage
- Nanny
- Charity balls
- Dinners out
- Vacations abroad
- Garage for the car
- Summer house
The more productive people are the more they produce. The more they produce the more money they make. The more money they make the more stuff you want -- even millionaires don't think they have enough to attain everything they desire. Thus, workers that are laid off due to productivity improvements should be able to find work that inevitably results from the increased demand that results from the workers that are being paid more.
If you need any more convincing, just consider the fact that the richest countries are also those that are most technologically advanced and have the highest productivity. Doing more with less is the secret to prosperity.
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