A huge part of the problem here is the low, low interest rate environment we're in. Low interest rates make expensive machines cheaper than humans. High interest rates make humans cheaper than machines. (For a range of values of cheaper)
Being able to afford a $300k house on $50k/year is great until you don't make the $50k/year anymore because you've been automated out of a job.
In the past people with a lot of money could invest their money and see a fairly stable, secure return of 5-15% a year depending on the exact risk profile of their investments; savings accounts -> stocks.
Now if you have a lot of money you can buy businesses and replace people with capital equipment. Better returns than investing in the stock market (or bank accounts!) and it's basically off-limits to people who don't have 7+ figure amounts of cash. Which statistically is basically everyone.
Higher interest rates would let the rich enjoy more work-free income but it also keeps normal people in jobs. And it provides some kind of incentive to save; interest in a bank account is basically scale-free.
I think maybe that's another one of the problems we're seeing, opportunities to grow your wealth aren't scale invariant. A little money has very, very few opportunities to earn interest. A lot of money has a many opportunities to be grown.
Being able to afford a $300k house on $50k/year is great until you don't make the $50k/year anymore because you've been automated out of a job.
In the past people with a lot of money could invest their money and see a fairly stable, secure return of 5-15% a year depending on the exact risk profile of their investments; savings accounts -> stocks.
Now if you have a lot of money you can buy businesses and replace people with capital equipment. Better returns than investing in the stock market (or bank accounts!) and it's basically off-limits to people who don't have 7+ figure amounts of cash. Which statistically is basically everyone.
Higher interest rates would let the rich enjoy more work-free income but it also keeps normal people in jobs. And it provides some kind of incentive to save; interest in a bank account is basically scale-free.
I think maybe that's another one of the problems we're seeing, opportunities to grow your wealth aren't scale invariant. A little money has very, very few opportunities to earn interest. A lot of money has a many opportunities to be grown.