The Income Reengineering Initiative is defined as:
The Income Reengineering Initiative is a grassroots lead economic research project. The research seeks to answer the question: how do we apply the internet and other information technology to improve the income, wealth and standard of living for the masses?
When considering the definition of Income Reengineering, this basically means how do we apply the internet and other information technology to improve the income earning and wealth building ability of the average worker while he or she is on the job.
Why? As the global economy expands and information technology proliferates, income inequality has become a major socio-economic issue in the U.S. and abroad. Therefore, new thinking and economic research is required to help individual adjust to changes.
To dig into this, start by considering the following statistics:
Productivity statistics are particularly alarming:
“Between 1979 and 2013, productivity grew 64.9 percent, while hourly compensation of production and non-supervisory workers, who comprise 80 percent of the private-sector workforce, grew just 8.2 percent. Productivity thus grew eight times faster than typical worker compensation”. Source: Economic Policy Institute (EPI)
Productivity gains are the crown jewel of workplace information technology applications and workers are not participating in the productivity gains. What does this say about worker prosperity as the global information economy expand?
What is the Problem? Consider the following:
- During the industrial revolution, the standard of living for the average worker increased significantly as workers migrated from farms and small shops to earning a wage in factories. It was a historic transition;
- As we undergo this information revolution, we are again seeing a historic transition. So, as with the industrial revolution, shouldn’t there be a corresponding increase in the standard of living of the average worker? If so, where is it?
- So far, all we see is decreasing job security, stagnant wages, an expanding gap between rich and poor and a shrinking middle class. In general, we are seeing a decrease in aggregate standard of living for the average worker, not an increase;
- Why is the information revolution causing a decrease in the aggregate standard of living?
- Even if we were not experiencing a decrease and just maintaining previous living standards (i.e. low unemployment, predictable raises and cost of living adjustment year after year), the information technology revolution will still be letting us down. We should be seeing a significant increase in the standard of living for every consumer/worker across the board similar to what was experienced during the industrial revolution.
So, again, where is this higher standard of living? What is the source of the problem?
The source of the problem is the lack of fundamental rethinking of workplace compensation to accommodate new global information age realities. The traditional 8 to 5 workplace is simply evolving away from the old “industrial age” value matrix to a new “information age” value matrix. However, the thinking regarding workplace compensation is not evolving. Workplace compensation is still stuck in the “industrial age” with hourly wages, salaries and company sponsored benefits. Workplace compensation must evolve to include compensation resources more representative of information age realities. For example:
- These new global information age processes let corporations exploit new efficiencies that are effectively out-of-sync with traditional wage-based compensation models or the old industrial age compensation value matrix;
- The phrase “out-of-sync” has to do with flexibility. To be competitive in a global economy, corporations have to be fast, flexible, low cost and efficient as reflected by the disappearing job and outsourcing trends noted above;
- Hourly wages and salaries are fixed, “inflexible” payroll expense and will always be targeted for reduction or outsourced to the lowest cost producer. This reduction can come in the form of outsourcing or replacing jobs with productivity enhancing technology;
- As the global information centered economy expands, corporations will have more and more technology enabled opportunities to target and exploit these reductions. This is why productivity gains is skyrocketing and average wage gains are not.
As a consequence, any worker/employee who in compensated in the form of fixed hourly wage and salary will find in harder and harder to increase their income and standard of living…regardless of their individual workplace productivity. The fact that their employment represents a fixed expense to the corporate bottom line will increasingly be the overriding factor. The only exception may be individuals with knowledge and skill levels that cannot be found or duplicated anywhere else.
All we get from the government is lip service:
For this reason, we are launching this economic research campaign to aggressively address this issue.
Remember, the Income Reengineering Initiative is grassroots lead. Why? Think of it this way. If we are doing research on how to use the internet and information technology to improve the income, wealth and standard of living for the masses, then what better way to do this research than to have everyday people put the new proposed income production and wealth building processes to the test?
The detailed focus of this economic research comes to life in the Income Reengineering Vision