Date posted: August 2, 2012
The battle between man and machine is a longstanding one. And it appears to be flaring up again. What’s the latest chapter in this epic? N.C. State University economist Mike Walden responds.
“Well … if you look at a company, whatever company and you look at how it’s producing its product or service, it could really use two inputs. It can use people or labor or it can use machinery. And by machinery, I’m using a broad definition there, not only to … mean machinery — things on the floor — but also technology. So, labor and machinery are the two key inputs.
“Now recently what we’ve seen, in terms of production by a company, is a movement away from using labor to using more machinery. Let me give you a number: 35 years ago, two-thirds of total worldwide corporate income was paid to workers. Today that’s down to 60 percent. That’s a significant drop. And the reason is the availability and the less expensive nature of machinery, including, again, technology.
“Now this is occurring not just in the U.S., it’s also occurred worldwide. It has big implications not only from where people work but also what they get paid.”
Category: Economic Perspective