Nov

14

 Marx was right about one thing: there is a constant tug of war between employers and employees over what he called "surplus value". The companies whose shares are traded in the U.S. stock market have been used to having the stronger hand on the rope. Even the best employees - the ones whose work actually produces the profits - have been in a relatively poor bargaining position since the last economic crisis in 2007/8/9.

But, the wheel has turned, once again. If a person has real skills, he or she once again has a choice of jobs. This is the first period in nearly a decade when skilled workers actually have some bargaining power. Even as the journalists continue to discuss the coming of mass unemployment because of automation, the actual market for people smart enough to do the automating was getting tight enough that employers had to get serious once again about stealing each other's employees.

"Uber gutted Carnegie Mellon’s top robotics lab to build self-driving cars"

The relative wage costs of capable people are the most reliable indicator of the ebb and flow of business operating profits. Anyone with any experience as a manager knows that the 80-20 rule applies to employees as much as it does to customers. The proof of this is the common experience of anyone who has had to meet a serious deadline; you give the work to the people who are already busy doing their jobs. Much of the extraordinary rise in profits for American companies since the credit panic of 2008/9 has come from companies being able to give more and more work to the people who are already busy. That leverage in operating efficiency has been enormous.

It has come to an end. The people with skills are not only going to get a larger slice of the pie; they are also going to be using a larger knife. The people old and skilled enough to know the difference between work and life are asking for more.

See Samuel Gomper's "What Does the Working Man Want?"

Now that quality people have, once again, gained some leverage in their bargaining power, the rate of corporate profit growth is going to decline significantly and with it, the prices of company shares.


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