The term "post-employment economy" is getting thrown around a lot these days. It is typically used in a pejorative sense to refer to the lopsided economic recovery in the aftermath of the 2008-2009 financial crisis, whereby corporate profits and the stock market soared to record heights while unemployment remained high and many average Americans remained out of work or underemployed.

But here's the thing: the post-employment economy is not only inevitable, but it ought to be something we look forward to and embrace, not fear.

To wrap our heads around this, we need to understand the concept of "labor productivity." Simply state, labor productivity measures the real (ie inflation-adjusted) value of the goods and services that can be produced by one hour of labor. Labor productivity has gradually been rising in the Western world for centuries, but thanks a host of new technologies, most notably industrial robots and the internet, the increase in labor productivity has begun to accelerate at an ever increasing rate over the past few decades.

For most of the 20th century, the windfall of increasing labor productivity was split roughly evenly between workers and the owners of corporations. In other words, if workers were able to produce $5 more of value per hour, the workers' wages would go up by around $2.50 per hour, while the corporation's profits would increase by around $2.50. Almost everyone expected this trend to continue, and it was perfectly logical to foresee a day when labor productivity would be so high, that workers would have to work fewer and fewer hours and would have more and more time to pursue leisure and self-cultivation.

However, at least in the case of the US, a funny thing started happening around 1970, and the trend accelerated after 1980, namely, as labor productivity increased, an increasing amount of the windfall went to corporate profits and less and less went to workers in the form of increased wages. Now in 2013, for every dollar gained in labor productivity, around 97 cents go to the corporation. In other words, the corporations are capturing nearly ALL of the gains in productivity as profits. Overall, from 1973 to 2011, labor productivity grew by 80 percent, but real wages increased by less than 10 percent.

It all shakes out to a situation where American workers are working harder than ever for longer hours with fewer benefits and getting more done in less time than ever before, yet wages are flat, working conditions continue to deteriorate, and around 17 percent of the workforce is un- or under-employed. And all this despite the fact that robots are doing more and more of our manufacturing, computers are processing more and more of our data, and the internet has been a tremendous wealth generating machine.

The problem is that all of that wealth has been flowing upward to the top 1 percent or so, many of whom have gotten egregiously rich (Oracle CEO Larry Ellison, for example, recently bought an entire one of the Hawaii'an islands, you know, just for the heck of it). But a bigger problem is that in an era when there is less and less demand for labor, Americans continue to define themselves and others by their work. Whether it's the so-called Protestant work ethic, part of the American dream, or just an old habit, most people look to their job or career to find self-worth and personal fulfillment. On the other side of the coin, rich conservatives refuse to give "handouts" to "takers" because "they didn't work for it." The most ironic part is they like to think of themselves as "job creators" in an era when the internet and robots are destroying jobs at a phenomenal rate.

The bottom line is that Americans need to redefine what success means in society. Sending nearly 100 percent of the economic growth to a minute fraction of society because they "worked harder" and "deserve it more" is not only delusional but also utterly unsustainable. The balance between labor and capital is going to get adjusted one way or another, if only because there won't be much labor left to do. Still, let's hope there's not some sort of violent uprising before then. The best, and at this point probably inevitable, solution is some sort of "basic income" scheme whereby every citizen will be paid a certain minimum income out of tax revenues. This will let artists be artists, dreamers be dreamers, volunteers be volunteers, and yes, lazy people be lazy. But a lot of social good will be created at low overall cost, and most people will still be motivated to work in order to increase their income. And even if a lot of people are not motivated to work, there will be less and less work to do anyway (assuming no Skynet or Matrix-style robot revolt), and all humans will finally be free to reach their full potential. We'll get there somehow.

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