Sunday, February 8, 2015

Mind the (Financial) Gap

The world is going through an amazing period in human history. We are starting to see the benefits of the Internet and computers in a new light. With this unprecedented productivity, corporations are producing more and reaching record outputs. While this great growth is a very good thing, the average Joe is not seeing the benefits of this.

Wages are, for the first time in history, diverting from the growth in productivity. This creates a larger and larger gap between the rich and the poor. Are the poor just destined to live with meager wages, barely surviving? I hope not.

Here are some examples of where people are losing jobs:

Robots are taking over warehouses. Computers will soon be able to drive our trucks. Algorithms are being created to better utilize a company's servers. 

It is coming to the point where if you do not have the 'right' skills for the new economy, your job could be on the line. What happens when the majority of minimum wage jobs are automated? 

Two things that I think need to happen in order to avoid the perils of the future.

Number one is we need to shift our school curriculum from a laborer mentality to a skill driven mentality. Making this shift will begin to train our young people for a job with at least some type of skilled work. Germany does something like this where they have different 'tracks' for high school students. 

The second item is we need social reform. I do not know what this reform is. However, a dramatic shift in society that we are bound to see within the next 10 years will produce change. In the Industrial Revolution, we were able to get rid of child labor and a more standardized work week. One suggestion is to have a minimum income (see below video). This would give people something to live on. People may not like the hand-out but if the majority of people have to live off of a meager income (current minimum wage), who will buy the goods that we are producing? Consumerism accounts for approximately 70% of our GDP.

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