The pursuit for lower and lower cost production that relies on "slave wage" labor will eventually run out of places to chase. Eventually, "rich" countries, whose productive capital capability is owned privately by its citizens, will be forced to "re-shore" manufacturing capacity, and result in ever-cheaper robotic manufacturing.
"The era we're in is one in which the scope of tasks that can be automated is increasing rapidly, and in areas where we used to think those were our best skills, things that require thinking," says David Autor, a labor economist at Massachusetts Institute of Technology.
While I am not opposed to the concept of a "minimum wage," economic productivity is a bigger part of the story. Those arguing its support basically argue that labor is producing more value today, but working people aren't seeing any of the gains. Who has walked away with the proceeds from all that productivity? But contrary to general belief, when looked at through the lens of two factors of production----human and non-human----labor is not becoming more productive; the non-human means of production is driving the productivity gains.
A January 2013 report from Oxfam noted, "The richest one percent has increased its income by 60 percent in the last 20 years." It further argued that the 2012 net income of the world's top 100 billionaires--a haul of $240 billion--would be four times the amount needed to eliminate extreme poverty internationally.
These arguments fail to point out the income source for the richest one percent is not their labor but their dividend income derived from their ownership of productive capital assets----the non-human factor of production.
To maximize profit and thus dividend income----the purposeful function of business----companies strive to keep labor input and other costs at a minimum. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by non-human physical productive capital's ever increasing role.
This is the reality of business in the global and national setting where lowest cost production is necessary to be competitive.
Yet, the government continues to discharge its responsibility for the health and prosperity of the economy through coerced trickle-down; in other words, through redistribution achieved by the rigging of labor prices, including the minimum wage; by taxation to support redistribution and job "creation;" or subsidization by inflation and by all kinds of welfare, open and concealed. From an employment perspective, employment should start at the time one enters the economic world as a labor worker, to become increasingly a capital owner, whose productive capital contributes to the work load, and at some point to retire as a labor worker and continue to participate in production and to earn income as a capital owner until the day you die.
While the problem is one that no one can no longer ignore, the solution also is one starring them in the face but they just can't see the simplicity of it.
The solution addresses the fact that productive capital is becoming more productive and increasingly responsible for the production of society's products and services, not labor, whose relative input is constantly being diminished by the substitution of the non-human factor of production.
The fundamental challenge to be solved is how do we reinvent and redesign our economic institutions to keep pace with job destroying and devaluing technological innovation and invention so not all of the benefits of owning FUTURE productive capacity accrues to today's wealthy 1 percent ownership class, and ownership is broadened so that EVERY American earns income through stock ownership and full-dividend payouts, so they can afford to purchase the products and services produced by the economy.
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