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So to summarise where we are so far, the goal is to increase society’s overall wealth and distribute it appropriately, @SageAnd Onion defines wealth not as money but as the stock of the four resources needed to provide for the needs and most wants of people. These resources are: natural, human labour (an individual’s resource), built (e.g. roads, robots…) and social resources (systems like law, knowledge creation, cooperation between large groups…). Wealth increases when we combine different resources and create something that adds overall, e.g. wheat + labour + machines = bread, this bread is then consumed and keeps the human labour alive (human resource) so we can grow more wheat AND crucially undertake other activities that add to this national stock e.g. build roads, discover more knowledge…
....BUT the UK economy rewards businesses with profit and individuals with earnings, I will use these words synonymously, they are quite different than wealth creation. For example a business can make a profit by ravaging a forest, paying human labour a pittance to fell and cut the timber, use machines and so build furniture which people buy. If the impact on the forest and the labour is sufficiently detrimental to natural and human resources then wealth is reduced even though built resources have increased. The company has profited but wealth has actually decreased. Too much earnings grabbing occurs that is disconnected from wealth creation. Socially useful activity has a similar meaning to wealth creation.
If you want to review wealth creation - click here.
In the previous application we looked at how @SageAndOnion moralomics could organise some of the food supply system to redress resource mismanagement and so reduce pollution and illness caused by unhealthy food. (Click here for moralomics as applied to food supply)
In this article we shall look at wages and see whether that can be rebalanced to help re-align the economy towards wealth creation.
Current problems with the wage economy are: Rising income inequality, technology replacing jobs, globalisation outsourcing jobs, unbalanced wage negotiating power….leading to the need for more in work benefits, mental stress and physical illness, difficulty of implementing behaviour change taxes (e.g. sugar tax and fuel duty), social discord leading to more extreme political positions and the list goes on.
A job actually fulfils two needs; usually we need to earn enough to live but the need for employment runs deeper; work often defines who we are and our own mental image of our worth in society. If we are not able to contribute to society’s wealth say through art, innovation, making or growing things, caring, teaching and yes even banking then that has a huge effect on our well-being.
So let’s use @SageAnd Onion moralomics to dissect this two fold issue; the need to have a sense of self-worth and needing money to live.
So firstly the self-worth; if, or when, robots take over manufacturing, agriculture, driving and many other activities there will still be worthwhile wealth creating activities: Teaching, research, charity work, caring for the elderly and other activities including designing robots, starting new businesses, consulting….these will be still be required and are also wealth creating generally by building human resources or knowledge. Additionally there will be niche activities like local food growing, micro-breweries, crafts, hairdressing perhaps when it would simply be inefficient and so not productive to deploy robots. So there are more than enough self-worth, wealth creating activities to go round plus leisure activities and looking and getting to know your own family. The problem becomes matching these activities with being able to earn enough money to live.
How to escape the low pay trap, not enough income to afford reskilling to get a better job?
So how to earn enough doing a self-worth type of activity?
Some jobs pay well now, consulting, design, business innovation, these create wealth and the person often extracts good earnings. Some don’t, for example charity work, caring, most artists and of course those who don’t or can’t work a full week. How can we improve these people’s wage bargaining position without closing their employers? In the past unions and or education did the trick, but many sectors of the economy aren’t unionised and don’t need high levels of education and if wages were higher they would fold anyway.
by Clive Stevens 5th March 2017
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