The link between earnings and consumer spending has been tighter in this expansion than in any other since records began in the 1960s, according to calculations by Tom Porcelli, chief U.S. economist at RBC Capital Markets LLC in New York.

Wages have become even more critical as households, still shaken after being caught with too much debt when the recession hit, remain unwilling or unable to tap home equity or let credit-card balances balloon to buy that new television or dishwasher. By not overextending themselves again, Americans are only spending as much as their incomes will allow, meaning that 70 percent of the economy is riding on how fast pay rises.

“In an environment where credit is not being used in a material way, the fate of wages matters,” Porcelli said. “They’re doing all of the driving from a consumption perspective.”

Entered on 3/14/2015

The European Union’s (Other) Deflationary Driver – Job Computerisation

Submitted by Tyler Durden on 03/11/2015 18:25 -0400

Robot Economy Could Cause Up To 75 Percent Unemployment

Max Nisen

statigr.am/sennjiv

The Associated Press has a three-part series on one of the biggest questions business and society will face in coming years.

Are we prepared for a world where 50 to 75 percent of workers are unemployed?

It seems like a ridiculous question, but it’s something economists and technologists say we seriously need to think about. It’s just math.

Rice University computer science professor Moshe Vardi says that in 25 years “driving [done] by people will look quaint; it will look like a horse and buggy.”

So there go many of the approximately 4 million driving jobs out there. Same for sanitation, and those are just a couple examples of how physical jobs will be replaced.

Smarter computers mean that any mid-paying job that involves a routine: data entry, number crunching, operations, and so on, will be replaced as well, which will remove a big piece of the approximately 7 million business and financial operations jobs that exist in the United States.

When you add all of that up, some think 50 percent unemployment is optimistic. Software entrepreneur Martin Ford predicts something closer to 75 percent unemployment by the end of the century. “The vast majority of people do routine work,” Ford says. “The human economy has always demanded routine work.” And eventually, that work won’t be done by humans.

Andrew McAfee and Eric Brynjolffson argue that the trend is rapidly accelerating. What’s left are extremely specialized new digital jobs, like people who create apps, and the jobs that robots can’t yet replace, like restaurant busboy and other high-touch service jobs.

There aren’t enough of the former jobs, no matter how we’re educating people. Our new industries simply aren’t labor-intensive. And those lower end jobs are low paying, and may also end up being replaced as robots get better at specialized tasks, So income inequality will rise as unemployment increases, further slowing growth.

It’s a doomsday scenario that has nothing to do with natural disasters or global warming, but with the fact that technology is changing too rapidly for our economy or society to catch up.

At the very height of our recent recession, we had unemployment of around 10 percent. The economy and safety net could barely deal with it. It helped rapidly grow the debt, and we’ve yet to deal with that or other lasting consequences. A 10 percent unemployment rate is a mere fifth of what some experts predict we’ll see in the future, and we won’t be able to count on changing business cycles to lift us out.

If all of the profit from the efficiency and productivity gains from this new technology go towards a small group of people, and we don’t change our business or social model, we’re going to be left with an increasingly massive pool of people who just don’t fit in the economy.

http://www.wsws.org/en/articles/2014/09/06/econ-s06.html
New Federal Reserve report

US median income has plunged, inequality has grown in Obama “recovery”

By Andre Damon
6 September 2014

Vivek Wadhwa Influencer

Fellow, Arthur & Toni Rembe Rock Center for Corporate Governance at Stanford University

We’re Heading into a Jobless Future, No Matter What the Government Does

https://www.linkedin.com/today/post/article/20140731045824-8451-we-re-heading-into-a-jobless-future-no-matter-what-the-government-does?_mSplash=1

Robots Will Steal 50% of Human Jobs in Near Future, says MIT and Professors

By Lianna Brinded

July 2, 2014 17:24 BST

http://www.ibtimes.co.uk/robots-will-steal-50-human-jobs-near-future-says-mit-professors-1455088

Added 4.1 2014

http://www.salon.com/2013/05/12/jaron_lanier_the_internet_destroyed_the_middle_class/

Jaron Lanier’s “The Internet Destroyed the Middle Class.” from 5/12/2013

added 1/14/2014 – reactionary website praises fast-food robot for wiping out minimum wage workers.

http://www.eaglerising.com/4122/meet-machine-will-kill-minimum-wage/

added 12/4/13

http://thebitchywaiter.com/2013/12/applebees-plan-to-do-away-with-servers.html

new book, workers world.

http://www.workers.org/ebooks/CapitalismDeadEnd.pdf

Too much of U.S. and I suspect most other nations’ politics focuses on phony schemes for “job creation” and / or pointing the fickle finger of blame at the “other” for failing to create jobs, nor even to slow the tide of job destruction.

As you look deeper into this issue, you soon discover that there is a rampant process of job destruction, not job creation, at work in the global economy, and that has accelerated since the onset of the most recent economic crisis, in Sept. 2008.

Here’s a brief intro to a suite of articles that should leave your head spinning as you put on your Futurist hat and consider their long-term implications.

added 11/05/2013

Surviving the post-employment economy

http://www.aljazeera.com/indepth/opinion/2013/11/surviving-post-employment-economy-201311373243740811.html

added 7/10/2013

Temp Worker Nation: If you do get hired, it might not be for long.

http://www.alternet.org/temp-worker-nation-if-you-do-get-hired-it-might-not-be-long

Will smart machines create world without work?

http://bigstory.ap.org/article/will-smart-machines-create-world-without-work

Krugman: Rise of machines is partly to blame for income inequality

http://www.huffingtonpost.com/2013/02/02/paul-krugman-rise-of-machines_n_2607346.html

Unemployed far outnumber job openings in every sector (nationwide, not merely Wisconsin)

http://bit.ly/VnJevt

“Race Against the Machine” by Erik Brynjolfsson and Andrew McAfee, two economists at the Massachusetts Institute of Technology, is reviewed in Financial Times–

http://www.ft.com/intl/cms/s/2/d5e861c4-0150-11e1-b177-00144feabdc0.html#axzz1f9oun6jv

The “great decoupling” of the US economy. Rising productivity and profits not longer connected to rising workers’ living standards or prospects for survival.

http://andrewmcafee.org/2012/12/the-great-decoupling-of-the-us-economy/

60 Minutes: Are robots hurting job growth? (short answer: yes)

http://www.cbsnews.com/video/watch/?id=50138922n

“Robotic Nation” by Marshall Brain, explores some of the sociology that comes with a rapidly displaced working class. In particular, pay attention to his comments about what will become of the people made homeless in this onslaught–

http://marshallbrain.com/robotic-nation.htm

Green People's Media

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The Self-Destructive Stage of Capitalism

This is just a collection of readings about the roboticization of the labor force. It’s not well formatted, so you’ll have to work around that…

Artificial intelligence: ‘Homo sapiens will be split into a handful of gods and the rest of us’

This is a Tipping Point: Robots “Cheaper Than Any Human Worker” Means the End of Jobs

Stephen Hawking Says We Should Really Be Scared Of Capitalism, Not Robots

47% Of All Jobs Will Be Automated By 2034, And ‘No Government Is Prepared’ Says Economist

The end of capitalism has begun

The European Union’s (Other) Deflationary Driver – Job Computerisation

Robot Economy Could Cause Up To 75 Percent Unemployment

US median income has plunged, inequality has grown in Obama “recovery”

By Andre Damon
6 September 2014

Vivek Wadhwa Influencer

Fellow, Arthur & Toni Rembe Rock Center for Corporate Governance at Stanford University

We’re Heading into a Jobless Future, No Matter What the Government Does

Robots Will Steal 50% of Human Jobs in Near Future, says MIT and Professors

This is just a collection of readings about the roboticization of the labor force. It’s not well formatted, so you’ll have to work around that…

Robot Economy Could Cause Up To 75 Percent Unemployment

US median income has plunged, inequality has grown in Obama “recovery”

By Andre Damon 6 September 2014

Fellow, Arthur & Toni Rembe Rock Center for Corporate Governance at Stanford University

We’re Heading into a Jobless Future, No Matter What the Government Does

Robots Will Steal 50% of Human Jobs in Near Future, says MIT and Professors

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By Andre Damon
6 September 2014