Newsflash: Education (or the lack of it) is not why American wages are stagnant or falling.

The real explanation for stagnant or falling wages lies in productivity gains, and where those gains are flowing. Consider this report from Zack’s research: Darden to Install Ziosk Tablets at all Olive Garden Units in US:


Italian restaurant, Olive Garden, has announced that it has entered into a deal with Dallas-based Ziosk LLC to introduce tabletop tablets in all its U.S. restaurants. Ziosk is the manufacturer of ordering, entertainment and pay-at-the-table tablet. The company expects to install these tablets at all its 800-plus U.S. locations before 2015-end.


The Ziosk 7-inch touchscreen tablets, working on Android technology, will offer facilities such as choosing from the company’s wide menu, ordering drinks, appetizers and desserts, and help guests to pay the bill easily.

Call me crazy, but I see millions of server jobs in restaurants about to go “poof.” And the servers who remain will perform such minimal service per table that they will no longer be considered tip-worthy.

And, no, Darden is not some outlier:

In fact, it is these benefits that have prompted Brinker International Inc.’s to install these tablets at its Chili’s location in the U.S. Another restaurateur, DineEquity, Inc., has also introduced Ziosk devices at its Applebee’s Neighborhood Grill and Bar restaurants.

What does this have to do with Marx? Plenty.

Marx predicted that an increasing share of the proceeds from production would flow to capital, with a correspondingly decreasing share going to labor.

And that’s what’s happening here. The ziosks represent a major increase in productivity. And there are further increases in productivity ahead, as ziosks take over more and more tasks now performed by servers.

And who will benefit from the increased productivity? Will wages increase? No. Will servers see reduced hours with no decrease in wages because of the increased productivity? No. Many servers will be downsized, total wages of servers will decline, and the wage reduction will translate into increased profit for Darden’s shareholders.

Is that all? No, it gets worse. You see, all those unemployed servers will have to compete for other jobs, thereby increasing the supply of available workers. What do you think that does to wages in those other jobs?

If you want an idea where all this may be going, check out Chris Hedges post at Truthdig today, Karl Marx Was Right.

Does it have to be this way? No. The impact productivity changes have depends upon the policies we as a society adopt. We could implement policies that cause those productivity gains to benefit everyone, as they did in times past.

The challenge is how to get there, given that those who hold wealth and power in America aren’t much interested in sharing.