Any economic analysis should include the continuing replacement of domestic workers due to the trillion-fold price-performance improvement in computing over the past five decades. The information technology revolution has enabled that replacement not only through automation but by enabling outsourcing.



It is obvious that our current economic/political system would be unworkable when the machines do all the work and there are no employees. Well, if we look at the reduction in the non-managerial worker payrolls from 52% to 42% of GDP since 1972, one concludes that we are already 20% of the way there, and the seams are already showing in rising inequality and political radicalism.



The self esteem and motivation of workers is enhanced much more by increased pay rather than federal income subsidies. Also, the tax and redistribute model leaves the redistribution to the political whims of the current administration. Far better to put into practice a methodology which raises the portion of a corporation's gross profits allocated to non-managerial workers.



Such a scheme would set the minimum wage to a living wage and set a profit to payroll cap on a corporation based on their W2 and earnings history already in the hands of the government. Any profits in excess of the cap would be fined at a rate of 100%. The profit to payroll caps of all corporations would be reduced gradually until non-managerial payrolls again reached the 50% of GDP that existed during our strongest economic and worker income growth periods.



Worker dignity and self-esteem would be restored, while the additional wages would again strengthen our economy, reducing the need for dangerous easy personal credit and allowing interest rates to at last return to normal levels. The executive committee would have the power to apply the additional required payroll to those areas which would provide the best payoff for the corporation.



Taxes would still need to be collected but would no longer be needed to pay subsidies for the working poor.

