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The article you posted, what is it about?
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It's about rising productivity.
Lets see if I get your point by going back to my illustration.
Company X has 1000 workers with an average wage of $20/hr.
Because of increase in productivity ( say, new software and computers, outsourcing, etc. ), they now need only 900 workers ( as an example ) to do the same work 1000 people once did.
Hence, they can increase the wages of 900 people because they laid off 100 people.
1000 people at $20/hr costs $20,000/hr
900 people at $22/hr costs only $19,800/hr
Savings of $200/hr due to productivity
In this sense, they do not really have to increase the price of goods/services because COSTS remain the same or less ( they do the same work with less people ).
Is this the point you are driving at ?
The question then becomes --- what happens to the 100 who are now out of work ?
No wonder there isn't much optimism among working people ( especially the older ones ) inspite the growth of productivity.
What happened to the millions who used to farm in the US? They got better jobs and we produce more food, more cheaply than ever before.
Which is why we have Luddites. Productivity has probably put more people out of work than any other factor throughout history.
But there are different solutions to the equation. If a company's market is growing, it can freeze hiring, or slow down the pace of hiring.
If employees have to learn new technology to be more productive, or take on responsibility for higher output because of higher productivity, then they should receive higher wages. That doesn't mean they should get all of the extra revenue, but there should be a nice balance between higher wages and higher profits. A healthy market will allow that, but the market isn't healthy when the Federal Reserve body slams the entire economy when people start getting higher wages, even when those higher wages are due to higher productivity.
Of course, there are many managements out there that lack any creativity whatsoever, so they use the sledgehammer approach and they do layoffs first, which forces the remaining employees to be more productive. Most employees actually go on to better careers. They are forced to go to more successful companies, or to improve their education and become more productive that way. Some will go to work for startup companies in somebody's garage, such as Google, Apple, Microsoft, Cisco, and many other now large companies used to be. That's why venture capital and entrepreneurship is so important in an economy that relies so much on productivity gains.