Why is it that, despite all the benefits of technology, we’re still working as much as ever to secure a decent life?
I don’t have have any groundbreaking insights, but it’s fun to ponder. Plus, it’s somewhat relevant for anyone managing their own capital, particularly if you’re looking to account for any long-term, technology driven structural shifts.
Here’s my take.
Technology is, at its core, a productivity machine. It lets us make more, do more, and ideally spend less time on the things that chew up our energy. So, in theory, every time a new productivity booster — like electricity, telecommunications, or maybe AI — shows up, society should end up with more “stuff” without everyone working longer hours. Think about the impact of assembly lines, barcodes, or container shipping: huge productivity leaps that cut down on human input.
Yet here we are, with the average person today working just as hard as ever for what we’d call a “comfortable” life.
Of course, the material improvement in living standards over the past century has been astounding. That’s what technology has enabled, along with improved (If not still flawed) standards of governance.
But it’s curious how the immense productivity gains we’ve experienced haven’t helped us more easily afford essentials like housing, or avoid a wider ‘cost of living ‘ crisis.
For those of us who see true wealth as that which enables freedom over our time, these gains in productivity just aren’t apparent in day-to-day life.
Sure, the ‘economy’ has grown, but it seems we’re having to run ever faster to stay on the hamster wheel.
At least for those not fortunate enough to have accumulated a good base of real assets.
Take the U.S., where productivity has climbed over recent decades, yet median wages have flatlined. Essentials like housing, healthcare, and education — they’ve all surged far faster than wage growth. Data from the Pew Research Center and the U.S. Census Bureau shows people are spending a greater chunk of their income on basics compared to past generations, especially in developed economies.
The crux is that while technology has indeed upgraded our material lives, it hasn’t given us all that much extra free time — or at least, not in line with the gains in economic growth. There’s a curious disconnect between this productivity boom and what that actually means for individual wealth, at least beyond the crude measure of GDP.
And it’s not like we’re all slogging it to support lavish lifestyles we could easily cut back on. I’m talking about regular people struggling to afford the basics.
Here in Australia, for the average worker, buying a basic home without family assistance is close to impossible. Even if you’re earning well above average and saving diligently, it’ll take you most of your working life to finally own a home outright.
So, while tech has undoubtedly boosted society materially, even young, well-paid professionals today struggle to secure the basics solely through their own earnings.
Why? Well, it’s a blend of who owns the capital, how productivity gains are distributed, and how we keep track of it all, especially as it relates to all the debt we’ve accumulated. Not that I want to get into political and economic philosophy — that’s a lot of a fun, but probably won’t yield any practical outcomes.
No, the point of highlighting the disconnect between past tech growth and the deterioration in things like housing affordability and the overall cost of living is to show that value accrues in unexpected (and often unfair) ways.
And if we ever hope to build and secure genuine wealth for ourselves and our families, we should seek to understand why that is, and what it suggests in terms of how we should allocate our precious time and savings.
Everyone will have their view, but I think there are some lessons from history that may serve us well.
It’s a big topic, so it’ll have to wait for next week!
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