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Rohirrim 06-14-2013 07:54 AM

Krugman Issues a Wake Up Call
I’ve noted before that the nature of rising inequality in America changed around 2000. Until then, it was all about worker versus worker; the distribution of income between labor and capital — between wages and profits, if you like — had been stable for decades. Since then, however, labor’s share of the pie has fallen sharply. As it turns out, this is not a uniquely American phenomenon. A new report from the International Labor Organization points out that the same thing has been happening in many other countries, which is what you’d expect to see if global technological trends were turning against workers.

And some of those turns may well be sudden. The McKinsey Global Institute recently released a report on a dozen major new technologies that it considers likely to be “disruptive,” upsetting existing market and social arrangements. Even a quick scan of the report’s list suggests that some of the victims of disruption will be workers who are currently considered highly skilled, and who invested a lot of time and money in acquiring those skills. For example, the report suggests that we’re going to be seeing a lot of “automation of knowledge work,” with software doing things that used to require college graduates. Advanced robotics could further diminish employment in manufacturing, but it could also replace some medical professionals.

cutthemdown 06-14-2013 08:10 AM

So one day it will be star trek and we don't have to work. We just sit around and paint, do plays, music, sports and every once in awhile have to fight some aliens.

Rohirrim 06-15-2013 08:30 AM

What it means is that the system is set up in such a way that, not only is the income inequality in America the worst in the industrialized world (right up there with Singapore), but the system is a self-feeding loop. The disparity will continue to grow and grow. More wealth will get funneled to the top 1% while opportunities for citizens continue to decline. Even some of the highly skilled and educated will get kicked to the curb as technology replaces them. The latest report on higher education says college is already out of reach for many in the middle class, and will only get worse. In other words, the American dream, the underlying ideological support of our country, is being eroded out from under us. No empire in history survives the loss of its core reason for being.

baja 06-15-2013 09:18 AM

This is why we are considered useless eaters and 80% of us must go to, you know, save the earth.

cutthemdown 06-15-2013 12:09 PM

You guys are idiots.

TonyR 06-15-2013 02:36 PM


Originally Posted by cutthemdown (Post 3862787)
You guys are idiots.

Care to explain? You don't agree that wealth inequality is growing? You don't agree that college is becoming more and more unaffordable for more and more people? And that even those earning degrees these days are having a harder time finding full employment? Or is this where you just proclaim that it's all Obama's fault and as soon as he's replaced everything will be fine?

El Minion 06-15-2013 03:02 PM

Alan Krueger on how the music industry explains inequality

By Neil Irwin, Published: June 12, 2013 at 6:35 pm

It is exceedingly rare for a White House chief economist to give a speech on rock-and-roll. But Alan Krueger is scheduled to do just that Wednesday evening at the Rock & Roll Hall of Fame in Cleveland. His talk there (a text was made available in advance) is a terrific window into how the music business explains the forces shaping our collective economic fortunes.

“The music industry is a microcosm of what is happening in the U.S. economy at large,” Krueger, chairman of the White House Council of Economic Advisers, says. “We are increasingly becoming a ‘winner-take-all economy,’ a phenomenon that the music industry has long experienced. Over recent decades, technological change, globalization and an erosion of the institutions and practices that support shared prosperity in the U.S. have put the middle class under increasing stress. The lucky and the talented – and it is often hard to tell the difference – have been doing better and better, while the vast majority has struggled to keep up.”

So how does this show up in the music industry?

More and more of the revenue from concerts, Krueger shows, is going to bands at the tippy-top of the scale of popularity. Since 1982, the top 1 percent of performers have gone from earning 26 percent of concert revenue to 56 percent!

But how does technology drive that? Krueger works through the process. A century ago, a musical performer could only reach as many people as his or her vocal range and travel schedule would allow. Now, high-quality recordings can be distributed to billions with the flip of a switch. The result: Everybody has access to the very best music, or at least the music that most precisely suits their tastes. The megastars who create that music are wildly popular and can make a fortune. But it means things are pretty hard out there for a mid-tier band just trying to build a loyal fanbase.

That’s too bad if you’re an aspiring musician – it means only the most appealing bands in the world will be able to make a good living performing. But might it at least mean that we as consumers are getting the music that brings us the most joy possible? The music industry is a meritocracy where the very best songs, and artists, rise to the top, right?

Well, not so much. Luck plays a shockingly important role in which songs and artists become mega-successes, Krueger shows. He points to research by sociologists Matt Salganik and Duncan Watts. Participants in their study were able to log in to listen to songs and download those that they liked. The researchers played a little trick on them: Some of the participants saw an actual ranking of which songs had been downloaded the most previously. Others saw a random ranking.

It turns out that just the appearance that something was popular drove more people to download the song. Rather than a pure meritocracy where the best songs rise to the top, music seems to have strange effects in which popularity breeds greater popularity. The researchers even showed some people a popularity charts that was the exact reverse of the reality of the different songs’ popularity. Here’s what happened:

The unpopular song falsely reported as being popular did great. And the popular song falsely reported as being unpopular did poorly. In other words, our perceptions of popularity shape what music we enjoy.

“In addition to talent, arbitrary factors can lead to success or failure, like whether another band happens to release a more popular song than your band at the same time,” said Krueger. “The difference between a Sugar Man, a Dylan and a Post Break Tragedy depends a lot more on luck than is commonly acknowledged.”

Read the full, interesting speech here.

Rohirrim 06-15-2013 03:46 PM


Originally Posted by TonyR (Post 3862849)
Care to explain? You don't agree that wealth inequality is growing? You don't agree that college is becoming more and more unaffordable for more and more people? And that even those earning degrees these days are having a harder time finding full employment? Or is this where you just proclaim that it's all Obama's fault and as soon as he's replaced everything will be fine?

For some, shoving your head down deeper into the sand is the best solution when confronted by unwelcome facts.

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