Productivity as the Strangler of Social Security

November 23, 2010

 In America’s glory days of manufacturing, the 50’s, hundred of thousands of factory workers, postal workers, telephone repairmen, clerks and their managers earned a paycheck and contributed to the Social Security trust funds. Over the next 40 years automation and the Information Technology revolution swept these occupations into the dustbin of history along with blacksmiths and icemen.  Replacing people with robots and computers added trillions to the corporate bottom lines, but starved the SS trust funds. The increases in productivity slashed costs and let consumers buy better products at lower costs.  The cost savings also went to corporate dividends and investors profited handsomely. Unfortunately, these distributed profits are not subject to SS withholding, but do fuel demand and therefore counteract downward pressure on prices.  Resulting increases in the Consumer Price Index then siphon SS trust funds.  During the recent economic disaster corporations were cutting their workforce to maintain profitability.  The productivity gains that have been realized will be not surrendered easily.  Once economic recovery resumes employment will lag behind pre-disaster levels.  Some of these same cost savings have been funneled into the corporate messaging machine to convince the public that all taxes are toxic.   Now given their civil rights the corporate money machines can purchase politicians and judges to avoid correcting the dynamic. The continuing squeeze to cut workers amplifies the problem exponentially.  Taking the remaining work offshore dooms the public safety nets. Trading good high wage jobs for minimum wage level jobs that can not be automated lowers SS trust fund revenues. Nobody wants to give up the benefits of technology. We all applaud machines doing the dangerous work and the drudgery. Luddites never envisioned iPhone apps. Clerks, who went back to school to become computer programmers, now sit in their cubicles worrying about those jobs going to India. Even the professions of the past, e.g. radiologists, attorneys doing document review, are finding their services are being automated or performed by foreign workers who receive a fraction of American pay levels. Computers designing computers, robots building robots, the future is now. Productivity and efficiency will allow a smaller workforce to sustain a greater unemployed portion of the population.  Perhaps we will approach levels from the 50’s where half the population (women in that day) was not employed outside the home.  Wives of that era were entitled to a SS benefit based on their employed spouse’s earnings. We just need to share current benefits equitably and figure out what to do with “surplus” workers. Science fiction has projected a future where robots handle all the mundane chores and humans are free to explore their pursuit of happiness in leisure. Well, maybe for very few with inherited wealth.

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