A post on today’s Macrobusiness describes how Australia’s General Motors workers being asked to take a pay cut is the harbinger for a general fall in the nation’s wages.
This is coupled with a post by Paul Krugman in the New York Times sympathising with the Luddites as technology takes away many middle class jobs that were not so long ago thought to be the safe knowledge jobs of the future.
Krugman points out that in the United States income inequality started accelerating in the year 2000, the stagnation of most Americans’ incomes started a decade or two before that.
For the last few decades, expanding credit allowed the consumerist society to continue growing, but the crisis of 2008 marked the end of that that economic model. Although governments around the world have tried to keep it alive by pumping money into their economy.
Now we have to face the reality that the Western world’s standard of living is falling for the first time in a century.
For some this is going to be really tough – although one suspects those who will really complain are those least affected.
What is clear is that many of our business and political leaders aren’t prepared to face this change. Dealing with that is going to be the biggest challenge of this decade.