Robots and Robber Barons – New York Times 12-09-12

The American economy is by most measures deeply depressed. Corporate profits are at a record high because capital is grabbing an ever-larger slice at labor’s expense.

The wage gap between those with a college education and those without grew a lot in the 1980s and early 1990s but hasn’t changed much since.

Technology is displacing workers of almost all, kinds, and one reason for some high-tech manufacturers moving back onshore is that the most valuable piece of a computer, the motherboard, is basically made by robots, so cheap Asian labor is no longer a reason to produce them abroad. Erik Brynjolfsson and Andrew McAfee at MIT say similar stories are playing out in many fields, including services like translation and legal research.

Innovation and progress can hurt large numbers of workers as serious economists have known for almost two centuries.  Barry Lynn and Phillip Longman of the New America Foundation say that increasing business concentration is an important factor in stagnating demand for labor, as corporations use their growing monopoly power to raise prices without passing the gains on to their employees.