These two recent pieces focus on disturbing developments in labor markets. Ambrose Evans-Prithchard zeroes in on unbelievable global undercapacity rates, and on troubling disinflationary readings, in spite of massive money creation schemes undertaken in the US, UK and Japan. Surely tongue-in-cheek, he actually ends his piece "Back to socialism anybody (The only objection I'd have to this deals with the "back to")?"
The second piece, posted on Time Magazine's "The Curious Capitalist" blog, fleshes out Evans-Pritchard's view by looking at developments on the high end of the labor market, and specifically on Silicon Valley. The essential insight here is that the demand for talent may be forcing technology companies to redouble their efforts in an increasingly competitive market by attempting to initiate ever-larger labor-saving technological advances. It also makes the key point that the wage gap in this country goes far beyond Wall Street.
Taken together, the picture that emerges is one in which a geographical form of labor arbitrage (playing off workers in one part of the world against others in other parts of the world) is being reinforced by technology that both increases the market power of the highest-paid while reducing that of just about everyone else. This is hardly a novel insight, but it's instructive to revisit it now and then. And, with data like these, the picture of thew underlying trend seems to become more well-defined all the time.