Robots Don’t Destroy Jobs; Rapacious Corporate Executives Do

Robots Don’t Destroy Jobs; Rapacious Corporate Executives Do

Posted: 02 Jan 2013 10:43 AM PST

By William Lazonick, professor of economics and director of the UMass Center for Industrial Competitiveness. He cofounded and is president of the Academic-Industry Research Network. His book, “Sustainable Prosperity in the New Economy? Business Organization and High-Tech Employment in the United States” (Upjohn Institute, 2009) won the 2010 Schumpeter Prize. Cross posted from Alternet
Americans are understandably upset about profits without prosperity. Corporate executives seem to be the big winners, while the middle class is declining and young people face a bleak economic future. How did this happen? It's easy to blame technology, especially the automation that supposedly displaces workers. But that's not the real story. The fact is that automation creates jobs. It's the misuse of corporate profits that are destroying them.
There was a time when high corporate profits meant bright employment prospects for most members of the US labor force. That relation between profits and prosperity was strongest in the immediate post-World War II decades when US corporations led the world in manufacturing, provided workers with career-long employment security, and reinvested profits in productive capabilities in the United States. For the past three decades, however, the pursuit of corporate profits has been at the expense of prosperity for an ever-growing proportion of the American population.
This disconnect between profits and prosperity began in the 1980s with permanent plant closings that cost production workers their middle-class jobs. It increased in the 1990s as major US corporations scrapped the career-with-one-company norm that had prevailed for salaried employees, and it became common even for college-educated people with a couple of decades of work experience to find themselves on the wrong end of the pink slip. Then in the 2000s, as US corporations accelerated the globalization of production activities, the jobs of all members of the US labor force, no matter what their level of educational attainment, became vulnerable to competition from qualified people in lower wage areas of the world. More at http://www.nakedcapitalism.com/2013/01/robots-dont-destroy-jobs-rapacious-corporate-executives-do.html