Shove it Up Your Class
In 1977, the perfectly named Johnny Paycheck sang the lyrics, Take this job and shove it, landing a number one hit, inspiring a movie, and creating a lasting anthem and adage. But another lyric might more aptly fit our current moment: Take these employees and shove them. When push comes to shove, today’s corporations are making more money while employing fewer people. “In 1985, IBM was America’s most valuable company, one of its most profitable, and among its largest employers, with a payroll of nearly 400,000. Today, Nvidia is nearly 20 times as valuable and five times as profitable as IBM was back then, adjusted for inflation. Yet it employs roughly a 10th as many people. That simple comparison says something profound about today’s economy: Its rewards are going disproportionately toward capital instead of labor. Profits have soared since the pandemic, and the market value attached to those profits even more. The result: Capital, which includes businesses, shareholders and superstar employees, is triumphant, while the average worker ekes out marginal gains. The divergence between capital and labor helps explain the disconnect between a buoyant economy and pessimistic households.” WSJ (Gift Article): The Big Money in Today’s Economy Is Going to Capital, Not Labor. (Alt link.) Capital gains are going up, the value placed on human capital is going down. And, of course, these trends are only being accelerated by technological shifts and political winds. Yale economist, Pascual Restrepo, explains: “There will be winners: workers whose jobs require social skills, proximity or manual labor, and consumers, who get cheaper products and services. The biggest winners of all? Shareholders.”
+ “Anyone subcontracting tasks to AI is clever enough to imagine what might come next—a day when augmentation crosses into automation, and cognitive obsolescence compels them to seek work at a food truck, pet spa, or massage table. At least until the humanoid robots arrive.” The Atlantic (Gift Article): America Isn’t Ready for What AI Will Do to Jobs. (They may have an inkling, though. What a new Gallup poll shows about the depth of Americans’ gloom.)
+ And about our new immigrant unfriendly policies that are supposedly going to create more jobs for Americans? Binyamin Appelbaum in the NYT (Gift Article): What Replaces Deported Immigrant Workers? Not Americans. “There is a big hole in the seductively simple argument that Mr. Trump’s policy will push employers to hire Americans: For many jobs, the cheaper and more likely replacement is a robot. And the jobs that can’t be done by robots? Many will simply leave the country.”
+ It doesn’t take an AI program to figure out that these factors will contribute to an already massive economic divide. And we’re engineering it to be even wider. Amazon, Meta, and Alphabet report plunging tax bills thanks to AI investment and new rules in Washington. Meanwhile, US consumer delinquencies jump to highest in almost a decade.
+ Related: Here’s a flight tracker showing all the private jets leaving the Bay Area after the Super Bowl.
