To Understand Rising Inequality, Consider Janitors
The roots of modern wealth inequality on deep, vast, and way more complicated than companies just outsourcing unskilled labor because they are optimizing for profit over being charitable.<p>* Automation advances in every industry. It is like AI - there is no sudden on switch when everything is automatic and post-scarcity is suddenly achieved. It is a slow march of small improvements and optimizations over time. Productivity per human labor hour has increased a hundredfold in the last century on the backs of this automation and innovation.<p>* A combination of social organization, peer pressure, the variable range in the quality of a persons parents, the variability in wealth of a family, the trends towards and away from high median wealth, the prevalence of anti-intellectualism, the laws at the time, the laws in the past, the general availability of materials, the competitive market internationally, and ones own biology contribute to the prevalence or absence of an educated populace. No society has figured out how to take <i>every</i> human born and turn them into a scholar, however. We <i>all</i> have the disenfranchised who are not educated (in fields the market deems valuable) but still need avenues to survive. This creates our unskilled labor market.<p>* The laws of your country influence how wealth moves throughout it. The laws of other countries also influence the behavior of private actors in your economy when interacting with foreign ones. The market is global - business decisions are not made based on arbitrary lines on a map, they are made based on the planetary market forces and trends of all seven billion+ people. Thus, you cannot set local policy (that influences wealth inequality) in a vacuum.<p>* Aside fiscal policy, you also have, relatively independent of other variables, how open your society is to innovation and entrepreneurship. This is another cultural marker, but if your country supports and incentivizes startups you can offset the problem of a waxing classical labor market. It also has the converse effect of generating jobs through its successes.<p>* Finally, and least significantly, is fiscal policy. In some countries the lack of a trustable market or rule of law can make this much more meaningful, but if your company has a functioning internationally connected economy nowadays all your fiscal policy is doing is pushing the boat rather than building it. Policies like favoring investment over salary <i>favor</i> increasing inequality, but are not the cause of it - they just accelerate it.<p>The TLDR is automation, education, globalization, entrepreneurism &#x2F; innovation, and fiscal Policy, but there are more, and these alone are just as abstract trends as wealth inequality is above them, just as much as how the future of humanity itself is just a abstraction above that.<p>Together all these effects, and more, influence the total market and control how prosperous or despondent people are. When citing historical wage averages as having stagnated in the US in the seventies it is not one aspect in isolation - from what this article talks about in regards to corporations only hiring immediately for its core competency and outsourcing other labor - but the combination of all of them. Rising automation reduces the need for labor. Rising populations increase the supply of labor. Fiscal policy favors wealth centralization. Globalization favors economies of scale. Giant companies throwing around more money means more influence - which means more regulatory capture. Regulatory capture means exploitation. Exploitation is always parasitic - it suffocates growth and prosperity to fill few pockets. Exploitation and rent seeking go hand in hand. Regulatory policy and capture come back again, creating rentiers markets to pillage and exploit more. Globalization reduces the sovereignty of individual nations, making it near impossible to fight back with just one government run by its people.<p>It feels inevitable. That as we advance in our ability to make so much from so little, that the real beneficiaries of it have to be those who were first movers on it, that were sociopathic enough to discard anyone else in the pursuit of power. To condemn billions to suffering and to suffocate markets and drain pocketbooks to make fractions of a cent more, to centralize resources just slightly faster into your control and domain of influence. Like global warming, like space colonization, like scientific innovation, none of these are the purview of one slice of Earth&#x27;s surface area. None are limited in scope to a few people. They matter to everyone, but we have no functional system of making everyone matter in regards to them. These market forces are operating beyond the bounds of one country - beyond the walls of Kodak and Apple. They are operating on the entirety of humanity and all their macroeconomic behaviors are dictated by the entirety of the accessible market capital can reach. But what is supposed to keep them in line, constrain capitalism to be to the benefit of both workers and capitalists and not just the later, is still isolated to thin strips of land subdivided by thousand year old traditions.<p>Focusing on the individual pieces of the puzzle remains valuable, but something as pervasive as rising inequality - of understanding the movements of markets, of a global economy that is beyond the complete knowledge of any one person anymore (it is simply moving too fast) - is the product of a billion causal relationships, not just whether companies want to invest in their employees now to prosper their local economies in the medium term.