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Saturday, June 22, 2013

The Cause of Income Inequality

You've seen the graphs showing that income distribution in the USA is growing more and more lopsided toward the 0.1% as time goes on? What causes this?

There is no conspiracy involved here. It's a simple process at heart, yet one which cannot be stopped and it will result in massive changes to the way this society is structured in the end. The simple fact of the matter is that you have capitalists on one side of the equation and workers on the other side. And, the relative share of the income pie is shifting from the worker side to the capitalist side over time. It's not a cyclic phenomenon, it's a trend where more and more income continusally is moved to the capitalists and out of the hands of the workers.

While the trend is strong, it's not a conspiracy on the part of capitalists. It's happening because, over time, more and more jobs are being automated by technological advancement. Workers command relatively lower skillsets to machines as time marches on. This is a fact and the only temporary relief from the trend for the workers is to have a skillset that's perceived by the marketplace as valuable. Hence, major sports and media stars continue to make the big bucks while jobs for lower-level workers disappear. Anyone who can multiply themselves via the media has a chance to outrun the machine competition. But, for the average worker, the game is rigged against them. Most jobs are very mechanical and are eventually subsumed by technology. Without a commensurate creation rate for new jobs which cannot yet be done by machines, there are simply a dwindling number of human-appropriate jobs for an expanding number of job-seekers.

Thus, in the long run, this society will be forced to evolve from one where workers get a rapidly-diminishing share of the pie—diminishing to a very small percentage of the total income—to a society where each citizen is treated as a partner in that society. The idea that someone has to work to earn a living must end. It must be replaced by the idea that each citizen deserves a basic income from society, like it or not.