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Why isn't information technology translating into increased wealth and prosperity??

by dchestnut
21 replies
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Think about it. With cell phones, smart phones, ipads and popular internet applications such as Twitter and Facebook, society is more connected than ever. However, the majority of this well connected society is still living paycheck to paycheck with little to no savings or real assets. The gaps between rich and poor is increasing at alarming rates and the middle class is shrinking. Why is this? Shouldn't information technology help people improve their standard of living?


Think back to the industrial revolution. When society transitioned from farms to factories, although early factories had many labor issues, generally, the average standard of living increased as people were able to leave the continuous toil on farms to earn a wage in factories. Now, that we are under going the information revolution, shouldn't there be a corresponding standard of living increase?? If so, where is it?
  • Profile picture of the author MissTerraK
    Originally Posted by dchestnut View Post

    Think about it. With cell phones, smart phones, ipads and popular internet applications such as Twitter and Facebook, society is more connected than ever. However, the majority of this well connected society is still living paycheck to paycheck with little to no savings or real assets. The gaps between rich and poor is increasing at alarming rates and the middle class is shrinking. Why is this? Shouldn't information technology help people improve their standard of living?


    Think back to the industrial revolution. When society transitioned from farms to factories, although early factories had many labor issues, generally, the average standard of living increased as people were able to leave the continuous toil on farms to earn a wage in factories. Now, that we are under going the information revolution, shouldn't there be a corresponding standard of living increase?? If so, where is it?
    In the government's pockets.

    Terra
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  • Profile picture of the author Dan Riffle
    For some it is. For most it isn't.

    Technology typically leads to increased efficiency and productivity, thus less workers. Those negatively affected by increased efficiencies have less. Those positively affected (business owners) have more.

    Another issue is that certain technologies actually decrease productivity. This is just my opinion, but I'd say smart phones and the internet have caused more harm than good in terms of prosperity. Who's going to work when they've got angry birds to kill?
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    • Profile picture of the author MissTerraK
      Originally Posted by Dan Riffle View Post

      For some it is. For most it isn't.

      Technology typically leads to increased efficiency and productivity, thus less workers. Those negatively affected by increased efficiencies have less. Those positively affected (business owners) have more.

      Another issue is that certain technologies actually decrease productivity. This is just my opinion, but I'd say smart phones and the internet have caused more harm than good in terms of prosperity. Who's going to work when they've got angry birds to kill?
      Say journalists. They can both create real life angry birds and then pick 'em off later.

      Terra
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    • Profile picture of the author Sumit Menon
      Originally Posted by Dan Riffle View Post

      Who's going to work when they've got angry birds to kill?
      WTF man! You don't kill the angry birds. You kill the green pigs using the angry birds!
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      • Profile picture of the author Dan Riffle
        Originally Posted by Sumit Menon View Post

        WTF man! You don't kill the angry birds. You kill the green pigs using the angry birds!
        You got me, Sumit. A hastily and poorly crafted example on my part.
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  • Profile picture of the author Sumit Menon
    It might not have been beneficial to you, but it has been for us in India and other Asian countries. India recently moved 138 million people out of the UN standards of 'extreme poverty'. That's a big deal given that our government is highly corrupt and funds allocated to social policies are embezzled at all levels of political hierarchy. What I am saying is an average Indian is better off today than he was 20 years ago. Globalization, IT and outsourcing have had much to do with this.

    Shifting from farms to factories still involved manual labor. Anyone could learn it quickly. IT involves knowledge work. Shifting from a factory environment to an IT company requires some degree of skill. It might take you a good 2-4 years, if not more, to make this transition. Not many could afford to make this transition, and I'd argue that a lot of them can't, even if they'd had the time and resources.

    Also as Dan mentioned, technology wiped out a lot of jobs from the market. And those were typically low-end jobs.
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    • Profile picture of the author dchestnut
      Originally Posted by Sumit Menon View Post

      It might not have been beneficial to you, but it has been for us in India and other Asian countries. India recently moved 138 million people out of the UN standards of 'extreme poverty'. That's a big deal given that our government is highly corrupt and funds allocated to social policies are embezzled at all levels of political hierarchy. What I am saying is an average Indian is better off today than he was 20 years ago. Globalization, IT and outsourcing have had much to do with this.

      Shifting from farms to factories still involved manual labor. Anyone could learn it quickly. IT involves knowledge work. Shifting from a factory environment to an IT company requires some degree of skill. It might take you a good 2-4 years, if not more, to make this transition. Not many could afford to make this transition, and I'd argue that a lot of them can't, even if they'd had the time and resources.

      Also as Dan mentioned, technology wiped out a lot of jobs from the market. And those were typically low-end jobs.

      This is great for India and other Asian countries. Actually, in this case, the information revolution is doing what it should do ---- increase wealth and prosperity. Unfortunately, the U.S and other developed countries are not benefiting.

      One reason why is reflected in an response to global competitiveness issues by Business Week columnist, Michael J. Mandel: "Think of the world economy as a ladder. On the bottom rungs are the countries producing mainly textiles and other low-tech goods. Toward the top are the U.S. and other leading economies, which make sophisticated electronics, software, and pharmaceuticals. Up and down the middle rungs are all the other nations, manufacturing everything from steal to autos to memory chips. Viewed in this way, economic development is simple: Everyone tries to climb the next rung. This works well if the topmost countries can create new industries and products. Such invention allows older industries to move overseas while fresh jobs are generated at home. But, if innovation stalls at the highest rung -- well, that's bad news for Americans, who must compete with lower-wage workers elsewhere" Source: Business Week columnist, Michael J. Mandel

      India and other Asian companies are aggressively climbing to the next rungs on the ladder. However, on the average, U.S. employees and other developed countries are not climbing up the next rungs of the ladder. They are stagnated at the old rungs and, therefore, losing ground.
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      • Profile picture of the author Sumit Menon
        Originally Posted by dchestnut View Post

        This is great for India and other Asian countries. Actually, in this case, the information revolution is doing what it should do ---- increase wealth and prosperity. Unfortunately, the U.S and other developed countries are not benefiting.

        One reason why is reflected in an response to global competitiveness issues by Business Week columnist, Michael J. Mandel: "Think of the world economy as a ladder. On the bottom rungs are the countries producing mainly textiles and other low-tech goods. Toward the top are the U.S. and other leading economies, which make sophisticated electronics, software, and pharmaceuticals. Up and down the middle rungs are all the other nations, manufacturing everything from steal to autos to memory chips. Viewed in this way, economic development is simple: Everyone tries to climb the next rung. This works well if the topmost countries can create new industries and products. Such invention allows older industries to move overseas while fresh jobs are generated at home. But, if innovation stalls at the highest rung -- well, that's bad news for Americans, who must compete with lower-wage workers elsewhere" Source: Business Week columnist, Michael J. Mandel

        India and other Asian companies are aggressively climbing to the next rungs on the ladder. However, on the average, U.S. employees and other developed countries are not climbing up the next rungs of the ladder. They are stagnated at the old rungs and, therefore, losing ground.
        Yes, but see, you guys don't have it as bad as we do. A lot of our people are dying from starvation. Many families don't have toilets in their homes. Sure, you guys are not doing as well as you were some 30-40 years ago but at least you are alive. I believe, it's a natural way of redistributing the wealth and resources.

        American minimum wage laws and welfare programs makes it harder for you guys too. We don't have them here. If the wages were allowed to fall below the minimum wage, then most companies would prefer to stay in America. Dealing with Indian government (and I assume those of other developing countries) is a head ache that even OUR entrepreneurs fret over. Also, the welfare programs assure that the wages wouldn't fall below a certain limit even without minimum wage. But then I shouldn't complain much.
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  • Profile picture of the author Brandon Tanner
    Originally Posted by dchestnut View Post

    Think back to the industrial revolution. When society transitioned from farms to factories, although early factories had many labor issues, generally, the average standard of living increased as people were able to leave the continuous toil on farms to earn a wage in factories. Now, that we are under going the information revolution, shouldn't there be a corresponding standard of living increase?? If so, where is it?
    The industrial revolution created a ton of jobs for people in the US. The "information revolution" is creating more jobs for people overseas than it is for people in the US. Not that I'm complaining, because I think it's smart to outsource to countries where your money goes further (so long as it's done in an ethical manner). But ultimately, I believe that's one of the biggest reasons why the middle class in the US has shrunk so much in recent decades.

    That, and there's no denying that there have been some very significant social shifts since the mid-1900's, which I believe has ultimately led to a much higher percentage of lazy people with "entitlement" attitudes... not a good recipe for "wealth and prosperity".
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    • Profile picture of the author seasoned
      Originally Posted by Brandon Tanner View Post

      The industrial revolution created a ton of jobs for people in the US. The "information revolution" is creating more jobs for people overseas than it is for people in the US. Not that I'm complaining, because I think it's smart to outsource to countries where your money goes further (so long as it's done in an ethical manner). But ultimately, I believe that's one of the biggest reasons why the middle class in the US has shrunk so much in recent decades.

      That, and there's no denying that there have been some very significant social shifts since the mid-1900's, which I believe has ultimately led to a much higher percentage of lazy people with "entitlement" attitudes... not a good recipe for "wealth and prosperity".
      WELL SAID! Technology has been a boon leading to perhaps TRILLIONS of dollars! Americans don't see a lot of it due to outsourcing, china, india, korea, mexico, etc.... THEY have seen most of the money. EVEN INTEL! Much of the manufacture is done offshore and a lot of support is from ASIAN manufacture! Even some PATENTS intel has make it CLEAR that they have offshore outsourcing that is "developing" on shore. Never mind it is based on AMERICAN technology.

      Steve
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    • Profile picture of the author dchestnut
      Originally Posted by Brandon Tanner View Post

      The industrial revolution created a ton of jobs for people in the US. The "information revolution" is creating more jobs for people overseas than it is for people in the US. Not that I'm complaining, because I think it's smart to outsource to countries where your money goes further (so long as it's done in an ethical manner). But ultimately, I believe that's one of the biggest reasons why the middle class in the US has shrunk so much in recent decades.

      That, and there's no denying that there have been some very significant social shifts since the mid-1900's, which I believe has ultimately led to a much higher percentage of lazy people with "entitlement" attitudes... not a good recipe for "wealth and prosperity".

      In addition to the outsourcing issues, years ago corporations used to be good "corporate citizens". This means they paid more attention to the well being of society and it's citizens in addition to the bottom line. Now, it's all about exploiting the bottom line through outsourcing. Granted, U.S. employees need to step up their game and climb the next rungs on the ladder, as noted above in my previous post, but corporations can do more to help remedy the situation by returning to be good corporate citizens.
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      • Profile picture of the author Kay King
        Shouldn't information technology help people improve their standard of living?
        Not necessarily. It will for some people and provide a view into possibilities for others.

        However, information is not necessarily creation. The Industrial Revolution built machinery that people could use for planting, harvesting, and other applications that saved time and/or improved productivity ...and increasing profits and jobs.

        The reality of what we call "info technology" has some fantastic potential such as online education, online purchasing and selling...but on a day to day basis what sort of info technology gets the attention of the general public? Info that is passed around and around - debated over and over - used to prove 'rightitude' or pry funds from unsuspecting marks.

        What most prove with Twitter and Facebook is an old adage: Talk is cheap. Confusing information technology with information regurgitation is common these days.

        The Industrial Revolution was forward thinking - ideas and concepts - making many jobs and lives easier, moving the population from one place to another more quickly. It was about how to do more - to build more - to be more productive and get more done in less time.

        The value in info technology can be found in architecture, engineering, medical and geological applications. It IS transferring into wealth and prosperity for many and to better lives for others. For those expecting wealth by plugging into info only...not so much.
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  • Profile picture of the author TLTheLiberator
    This article may shed some light with charts...

    Bash Brothers: How Globalization and Technology Teamed Up to Crush Middle-Class Workers - Derek Thompson - The Atlantic
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    • Profile picture of the author jimbo13
      I imagine the average US family have a couple of cars, more than one TV, cable, mobile phones, Tablets, fridges full of food, go on holiday etc etc etc.

      ie They have more stuff than even 10 years ago.

      Just like in the UK and most of the West.

      The developing world is rapidly following suit.

      Near where I live are the European HQs of many US Tech companies. (Information Technology as per your thread title)

      They employ thousands.

      100 years ago nearly all of the people who work 40 hour weeks for 45 weeks in the nice clean air conditioned offices with subsidised staff restaurants, good salaries etc would have been working 80 hours a week 51 weeks of a year doing back-breaking work either on the land or in a factory.

      I would call that an increase in prosperity.

      Dan
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      • Profile picture of the author tagiscom
        Yep, tech, makes our lives slightly easier and more fun, as well as complicating things as well, but overall it will make little to no, difference in peoples wealth.

        Why??? :rolleyes:

        Because the same old rules, or persistent effort, hard work and plenty of failures over 5 or more years is still true.


        Most can't or won't go through the above process, to create wealth, eventhough it is more or less available to most 3rd world economies populations, and probably the rest, if the individual is determined enough!


        The internet and tech, have opened up far more paths to wealth than ever before, but it still requires hard work and effort to extract it!


        If creating wealth were easy, then everyone, (as the thread has said) would be wealthy!


        Shane
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      • Profile picture of the author seasoned
        Originally Posted by jimbo13 View Post

        I imagine the average US family have a couple of cars, more than one TV, cable, mobile phones, Tablets, fridges full of food, go on holiday etc etc etc.
        The number of cars may be like 1-3, but that is for MARRIED couples, so let's say ONE! TVs were typically like 1, maybe 2. NOW, they are cheaper, and people are more likely to have 2-3. AGAIN, likely married couples. Cable has been there for DECADES, but is now a necessity. What is your point? It is an expense that has become MORE necessary! Mobile phones are ANOTHER! Did YOU know that in the US people pay for TOLL PHONES but toll phones are now pretty rare? Some people only have a mobile phone. Again, the cost has come down though. Tablets are only starting to become popular because they can be timesaver and are cheap. Refrigerators are no more full than they were. Going on holiday is LESS likely.

        ie They have more stuff than even 10 years ago.

        Just like in the UK and most of the West.
        Yeah, think about it. The question was why aren't people seeing IT HELP? YOU are talking about replacement and China.

        The developing world is rapidly following suit.

        Near where I live are the European HQs of many US Tech companies. (Information Technology as per your thread title)

        They employ thousands.
        Well, there are more people in the world, AND people move to IT or lose their jobs because of it.

        100 years ago nearly all of the people who work 40 hour weeks for 45 weeks in the nice clean air conditioned offices with subsidised staff restaurants, good salaries etc would have been working 80 hours a week 51 weeks of a year doing back-breaking work either on the land or in a factory.

        I would call that an increase in prosperity.

        Dan
        Actually, in the US, it WAS 40 hours for 45 weeks for quite a while. They have just redefined "full time" as 30 hours a week!!!!!! And more and more people are now going to 29hours a week. Is that an increase in prosperity? HECK NO! Let's say they get paid $10/hour.... That WAS $400/week, and now they get $290/week! So they go from a passable and livable wage to well below poverty! WHY? So the "full time" requirements don't kick in and the employer has to give them a lot of benefits, etc....

        And WHEN, in the US at least, has ANYONE had to work 11-16 hours a day? For 8 hours of sleep, that gives a person only about 3 hours to get ready for work, get there, get back, and get ready for bed! At 16 hours a day, of course, 8 hours of sleep is really not possible.

        With the added population,spread of money, change of times, and inflation, it isn't really prosperity at all.

        Steve
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        • Profile picture of the author jimbo13
          The point, Steve, is that the OP title is incorrect.

          You, we, have much better lives than previous generations.

          And technology is responsible for a chunk of that.

          Dan
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          • Profile picture of the author seasoned
            Originally Posted by jimbo13 View Post

            The point, Steve, is that the OP title is incorrect.

            You, we, have much better lives than previous generations.

            And technology is responsible for a chunk of that.

            Dan
            Better in SOME ways, FAR worse in others. Technology is now in the PERVERSION stage! That happens with many good things, but technology can feed on itself to pervert things much faster. It has been talked about, and laughed at, for thousands of years, but what were the ravings of a madman are now cold hard fact.

            Steve
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  • Profile picture of the author Claude Whitacre
    Originally Posted by dchestnut View Post

    Think about it. With cell phones, smart phones, ipads and popular internet applications such as Twitter and Facebook, society is more connected than ever. However, the majority of this well connected society is still living paycheck to paycheck with little to no savings or real assets. The gaps between rich and poor is increasing at alarming rates and the middle class is shrinking. Why is this? Shouldn't information technology help people improve their standard of living?
    It would help improve your standard of living if you used the technology to make money. Almost nobody does.

    Technology is mostly used (by people making money) as media. Advertising and selling media. The vast majority of us are not in business for ourselves, and the thought of taking advantage of this technology to sell more..simply never occurs to them.

    Most people live paycheck to paycheck because they don't do anything that creates wealth. Wealthy people do things that create wealth. Technology makes that process faster.

    Technology is a tool. But if you don't know how to use the tool (to create business), it doesn't help you have a better life financially.
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  • Profile picture of the author trader909
    IT NEVER will.

    Governments could not function if mot of it's "servants" were rich.

    Look at Nigeria.....huge oil money..look at the mass poverty. Corruption.
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