Shifting From Labor to Capital Reduces Demands
Finally, it’s easy to see how a shift in income from labor to capital would lead to a similar reduction in overall demand. Capitalists tend to save more of each marginal dollar than laborers. In the short run, a transfer from laborers to capitalists reduces total consumption, and thus total GDP. This phenomenon is summarized in a classic though possibly apocryphal story: Ford CEO Henry Ford II and United Automobile Workers president Walter Reuther are jointly touring a modern auto plant. Ford jokingly jabs at Reuther: “Walter, how are you going to get these robots to pay UAW dues?” Not missing a beat, Reuther responds: “Henry, how are you going to get them to buy your cars?”
Notes:
Because the workers automated out of jobs can't buy things.
Folksonomies: employment automation
Taxonomies:
/society/work/unemployment (0.437916)
/society/work/unions (0.411294)
/automotive and vehicles/vehicle brands/ford (0.140040)
Keywords:
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Entities:
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Concepts:
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Henry Ford (0.608759): dbpedia | freebase | opencyc | yago
Henry Ford II (0.567919): dbpedia | freebase | opencyc | yago
Harry Bennett (0.543433): dbpedia | freebase | yago
Congress of Industrial Organizations (0.527714): dbpedia | freebase | yago
Walter Reuther (0.493063): dbpedia | freebase | yago
Michigan (0.485980): website | dbpedia | freebase | yago
Automobile (0.481490): dbpedia | freebase | opencyc