The stock market rallied on Friday on employment news that should have been cause for worry rather than celebration. It is yet one more sign that shares have completely decoupled from reality if not yet sanity. Although the work force was reported to have grown by 220,000 in the last month, there has been scant wage growth to support the Fed’s increasingly farfetched narrative of economic recovery. Clueless as ever, The Wall Street Journal expressed puzzlement over how a relatively tight labor market could be producing such little pressure for higher wages. As the rest of us well know, impressive strides in technology, particularly where they affect the retail sector, have been damping the demand for unskilled workers, and for skilled workers at increasingly higher pay grades. Even as thinking machines have replaced human labor with increasing efficiency, the political tide has shifted toward minimum-wage populism, resulting in an urgent push by employers to automate as many jobs as they can.
Some will point out that, historically speaking, new technologies and production methods have ultimately always created more jobs than they destroyed. This may prove to be the case yet again. But the process could conceivably take decades this time around, or even generations, before the economic benefits of today’s creative destruction are fully realized. Bill Gates, for one, evidently gets this, suggesting as he did recently a tax on robots. Where fiscal policy is concerned, a better back-door entrance for Socialism could not be conceived than Gates’ suggestion. Of course, Bernie Sanders voters would not pause to wonder who, ultimately, would pay those taxes. “Why, ‘corporations,’ of course!” Those on the political left delude themselves when they rail against for-profit corporations as though they were corrupt, despotic monoliths rather than mere human beings organized and affiliated to produce wealth as efficiently as possible. Tax them to death if you want, but have no illusions about who will bear the cost.