tag:blogger.com,1999:blog-4409551172339639840.post8598917806381707134..comments2023-10-11T09:06:30.060-07:00Comments on Douglas L. Campbell: Robots and Inequality: A Skeptic's TakeDoug Campbell http://www.blogger.com/profile/11028049845008665877noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-4409551172339639840.post-65239244514596118852018-02-07T00:12:37.543-08:002018-02-07T00:12:37.543-08:00We have increasing inequality in Germany as well. ...We have increasing inequality in Germany as well. The OECD study<br /><br />http://dx.doi.org/10.1787/9789264119536-en<br /><br />impressively confirms that higher marginal tax rates reduce inequality before taxes and underscores what you say. It is at odds with standard demand-supply theory of wage formation but would agree with efficiency wage setting, especially selection wages, see <br /><br />https://wol.iza.org/articles/efficiency-wages-variants-and-implications<br /><br />or my Blog entry<br /><br />https://funktionalestaatsfinanzen.blogspot.de/2017/10/ein-interessanter-empirischer-befund.html.<br /><br />What speaks against skill-biased technological change is that increasing inequality goes along with increasing over-education, an over-supply of skilled labor. Selection wages would account for that, see <br /><br />http://www.economics-ejournal.org/economics/journalarticles/2007-13.Ekkehart Schlichthttps://www.blogger.com/profile/03956592476069086149noreply@blogger.comtag:blogger.com,1999:blog-4409551172339639840.post-58573398218538524652017-03-28T13:07:56.001-07:002017-03-28T13:07:56.001-07:00I view this somewhat differently and am not sure o...I view this somewhat differently and am not sure of the direction of causality. It seems to me that: <br /><br />In order to be economically viable, mass-production techniques require mass markets—that is, markets with large numbers of people who have purchasing power. Otherwise, the mass quantities of goods and services that can be produced via mass-production techniques cannot be sold. The existence of mass markets within a society, in turn, depends crucially on the distribution of income within that society: The less concentrated the distribution of income, the greater the purchasing power out of income of large numbers of people, the larger the domestic mass market will be; the more concentrated the distribution of income, the smaller the purchasing power out of income of large numbers of people, the smaller the domestic mass market will be. <br /><br />This brings us to the crux of the problem endemic in the changes in the distribution of income that have taken place during the past thirty-five years. Namely, that the share of income that went to the top 1% of the income distribution in the 2000s was twice what it was in the 1960s and 1970s. Doubling the income share of the top 1% from approximately 8% in 1980 to 19% in 2012 means the share of the bottom 99% went from 92% to 81%. As a result, the bottom 99% of the income distribution—99 out of 100 families—had, on average, 12% less purchasing power from income relative to the output produced in 2012 than the bottom 99% had relative to the output produced in 1980, and as we go down the income scale the reduction in purchasing power from income becomes more dramatic. The World Top Incomes Database shows that the fall in income for the bottom 90% of the income distribution in the United States from 1980 to 2012 was 23%. This means that in 2012 the bottom 90% of the population—9 out of 10 families—had, on average, 23% less purchasing power from income relative to the output produced in 2012 than the bottom 90% had in 1980 relative to the output produced in 1980....<br /><br />The point is, given the state of mass-production technology within our society, the domestic markets necessary to support full employment could not have been maintained without an increase in debt as the income transfer to the top of the income distribution examined in Chapter 1 took place and, thus, diluted the purchasing power out of income of the rest of the population relative to the output produced.[17] This is especially so as the situation was made worse as imports of mass produced goods increased relative to exports and productivity increased. Since employment, output, and productivity all increased during this period, it should not be surprising to find that debt increased substantially as well.... <br /><br />It seems to me that these factors interact to determine the way in which the concentration of income affects the way in which technology is adopted. I develop this argument more fully here: http://www.rweconomics.com/htm/WDCh3e.htm <br /><br />And what I think it means here: http://www.rweconomics.com/LTLGAD.htm <br />Anonymoushttps://www.blogger.com/profile/16011736382575746163noreply@blogger.comtag:blogger.com,1999:blog-4409551172339639840.post-61860441239522642802017-03-24T23:00:06.565-07:002017-03-24T23:00:06.565-07:00I agree with you. The institutions are different b...I agree with you. The institutions are different between the US and Germany, which accounts for the difference in inequality. In addition, labor market institutions in the US are different from the pre-Reagan era, when top marginal tax rates were extremely high, the minimum wage bound, and unions were more powerful. <br /><br />I like your last comment "Moreover, if robots are taking so many jobs in the U.S. why are U.S. productivity stats down so badly since 2000?" Exactly. It's hard to see the impact of robots specifically in the productivity statistics. Manufacturing productivity growth has more-or-less been constant before and after the advent of industrial robots. Doug Campbell https://www.blogger.com/profile/11028049845008665877noreply@blogger.comtag:blogger.com,1999:blog-4409551172339639840.post-20357975415409076982017-03-24T22:44:46.505-07:002017-03-24T22:44:46.505-07:00Thank you for pointing this out. Germany has more ...Thank you for pointing this out. Germany has more robots/worker than the U.S. yet a much larger percentage of high-wage manufacturing jobs in the workforce. That said, we musn't compare apples to oranges -- recall that in Germany many laws protecting labor insure lower inequality. Viz., the dual board system for Germany corporations + codetermination, etc. Moreover, if robots are taking so many jobs in the U.S. why are U.S. productivity stats down so badly since 2000?Unknownhttps://www.blogger.com/profile/10994509912655287453noreply@blogger.com