Has anyone examined how much of an impact technology has had on structural unemployment in the US? I feel like economics often glosses over the feedback loop required to grow an economy. People buy more stuff, so businesses hire more people, who use that income to buy more stuff, which entices businesses to hire more people. If technology replaces the need to hire more people, then who will buy the extra productivity that technology provides? I feel that the productivity gains of the information age have only recently been fully realized. The recession gave businesses the excuse they needed to fire workers that had been replaced by technology. This is the rational thing to do at a micro level because businesses know their competitors would do it as well. If a business hasn't run on a very lean staff the past few years, they are probably struggling. However, where do we go from here? The US government can spend to prop up aggregate demand for a while, but that is not a real solution. Only multinational companies that can benefit from the growth in emerging markets will prosper. I fear small business America will wither away.
Nice. I worry that it will take far too long for the general populace to realize that this is a real problem. Globally, it will not be a problem for quite some time. Reading those 2 market-based solutions, one can see the base arguments for Republicans and Democrats in the year 2150. :grin:
