Question

Technology is impacting every business and eliminating jobs while increasing efficiencies. How is this affecting the US economy?

Short answer please, A PG long. Thank!

Answer 1

Technological progress is impacting businesses and eliminating the jobs because of its nature of being a capital intensive. Capital intensive technological progress means where employing capital as against or in place of labour would increase the output and productivity more than it would have been otherwise. The modern technology is basically the internet-based technology where services are provided online with very less labour required. Huge turnovers of the companies contributing to the GDP of the country but this increase in GDP is not associated with the increase in employment. This phenomenon is also close to secular stagnation.

In the US the increased GDP is also not related to jobs. Jobs aren't increasing at the same pace because the growth is service sector dominated one. The services sector growth is that where very less labour is required because of their high skills and higher marginal productivity of capital. US economy is experiencing jobless growth and under the radar of secular stagnation.