Tag Archives: paycheck

The Robots Are Coming for Your Paycheck

Technological progress isn’t always a good thing.

A paper out this month concludes smart machines, such as robots, have the potential to destroy good-paying jobs and damage the economy.

“In other words, technological progress can be immiserating,” Boston University’sSeth Benzell, Laurence Kotlikoff and Guillermo LaGarda, and Columbia University’s Jeffrey Sachs write.

The study, “Robots are Us: Some Economics of Human Replacement,” is careful to note that’s not the only possible outcome. But it does predict a long-run decline in labor’s share of income, a cycle of tech booms and busts, and a growing dependency on past software investment rather than continued.

Economists have long debated the role of technology and the future of the economy. And clearly automation is playing a bigger and bigger role in daily life.

Messrs. Benzell, Kotlikoff, LaGarda and Sachs look specifically at the creation of software code that powers machines used to produce goods–that is, robots. Their worry is that the stock of good code will grow during a boom to the point that the demand for new code will decline, leading to lower wages in the high-tech field. That, in turn, means less savings and investment, and the accumulation of fewer assets.

“The long run in such a case is no techno-utopia,” the authors say. “Yes, code is abundant. But capital is dear. And yes, everyone is fully employed. But no one is earning very much.”

During the ensuing bust, consumption falls and not enough capital accumulates for the next round of investment.

“In short, when smart machines replace people, they eventually bite the hands of those that finance them,” the authors say.

Read more » The Wall Street Journal 
Learn more » http://blogs.wsj.com/economics/2015/02/17/the-robots-are-coming-for-your-paycheck/

Preying on Poverty: How Government and Corporations Use the Poor as Piggy Banks

by Barbara Ehrenreich
Individually the poor are not too tempting to thieves, for obvious reasons. Mug a banker and you might score a wallet containing a month’s rent. Mug a janitor and you will be lucky to get away with bus fare to flee the crime scene. But as Business Week helpfully pointed out in 2007, the poor in aggregate provide a juicy target for anyone depraved enough to make a business of stealing from them.

The trick is to rob them in ways that are systematic, impersonal, and almost impossible to trace to individual perpetrators. Employers, for example, can simply program their computers to shave a few dollars off each paycheck, or they can require workers to show up 30 minutes or more before the time clock starts ticking.

Lenders, including major credit companies as well as payday lenders, have taken over the traditional role of the street-corner loan shark, charging the poor insanely high rates of interest. When supplemented with late fees (themselves subject to interest), the resulting effective interest rate can be as high as 600% a year, which is perfectly legal in many states.

It’s not just the private sector that’s preying on the poor. Local governments are discovering that they can partially make up for declining tax revenues through fines, fees, and other costs imposed on indigent defendants, often for crimes no more dastardly than driving with a suspended license. And if that seems like an inefficient way to make money, given the high cost of locking people up, a growing number of jurisdictions have taken to charging defendants for their court costs and even the price of occupying a jail cell. ….

Read more » Common Dreams