Technology and automation has led to much greater efficiencies and output for every human in the workforce over the last 50 years. How come this hasn’t led globally to less working hours or a shorter work week for the average worker?

Question

EDIT: Replace ‘every human in the workforce’ with ‘most people’. I agree efficiency has not been gained equally across all professions.

In: Economics

Answer 1

As with most things, there are multiple reasons.

One of the reasons is that there’s a phenomenon called Jevon’s Paradox where an increase in efficiency leads to an increase in demand greater than the increase in productivity. If for example productivity for some widget is increased by 5x and that leads to the cost being reduced to 1/5th, demand might increase by 10x meaning you’d still need twice the workers despite the increase in productivity.

This can be seen even going back to the steam engine and the cotton gin. Slavery was actually slowly fading out even in the Southern US due to lack of demand… until the cotton gin came along and made cotton production much more efficient. This lowered the price of cotton to the point where demand exploded, leading in turn to a renewed growth in slavery.

Another reason is that corporations generally don’t look at increased productivity and say “since workers are more productive, they should be paid more for the same work and/or work less for the same pay”.

And there are plenty more factors.