The Economist "Effect of technology on tomorrow’s jobs immense - no country is ready"

[glenn1]

And you claim that ownership based on geography & accident of birth is a more legitimate way to distribute reward? Are you claiming that American Execs should be paid more than Bangladeshi execs for the same job?

I'm sure there are plenty of Bangaladeshi executives that could do just as well (or even better) in absolute performance terms than American ones, and that's even without relative pay considerations even coming into play. And yes, I believe that pay should be linked to performance and not geography. This holds regardless of the crazy ass system we have for determining executive pay in the U.S. American corporations have been far quicker to spread the net worldwide in looking for labor, the next logical step is to extend the talent search to the ranks of senior management.

 

[Hayabusa Rider]

Is "global labor arbitrage" your fancy way of saying pay rates should depend on geography and the accident of birth location rather than actual skills or production, e.g. an American should get paid more simply because they are American, instead of because they have marketable skills beyond what can be done by a completely unskilled 2nd grader in Bangaladesh?

I have no idea what the term is supposed to mean but the real world comes down to "will we make the next market expectations because our total compensation as executives depends on that". As you know sales are ephemeral, depending on factors outside the control of a corporation, but one thing is not and that's controllable expenses. Workers are not seen as having value by all too many in upper management, but a liability which will be cut at any opportunity. Ultimately that may be suicidal however Wall Street doesn't care about that now. It cares about the next quarter and therefore that's what those guiding corporations care about. They don't care about labor, the economy, the end of the world if it came to it. It's about P&L.

Some say that's how it should be, and from their perspective they would agree, but perhaps it's time to figure out ways to lead to a better result for everyone else.

Here's a bit from an old movie, It's a Wonderful Life, that many will find quaint in a disparaging sense.

Potter: Peter Bailey was not a business man. That's what killed him. Oh, I don't mean any disrespect to him, God rest his soul. He was a man of high ideals, so called, but ideals without common sense can ruin this town. Now, you take this loan here to Ernie Bishop...You know, that fellow that sits around all day on his brains in his taxi. You know...I happen to know the bank turned down this loan, but he comes here and we're building him a house worth five thousand dollars. Why?
George: Well, I handled that, Mr. Potter. You have all the papers there. His salary, insurance. I can personally vouch for his character.
Potter: A friend of yours?
George: Yes, sir.
Potter: You see, if you shoot pool with some employee here, you can come and borrow money. What does that get us? A discontented, lazy rabble instead of a thrifty, working class. And all because a few starry-eyed dreamers like Peter Bailey stir them up and fill their heads with a lot of impossible ideas. Now, I say...
George: Just a minute — just a minute. Now, hold on, Mr. Potter. You're right when you say my father was no business man. I know that. Why he ever started this cheap, penny-ante Building and Loan, I'll never know. But neither you nor anybody else can say anything against his character, because his whole life was...Why, in the twenty-five years since he and Uncle Billy started this thing, he never once thought of himself. Isn't that right, Uncle Billy? He didn't save enough money to send Harry to school, let alone me. But he did help a few people get out of your slums, Mr. Potter. And what's wrong with that? Why...Here, you're all businessmen here. Doesn't it make them better citizens? Doesn't it make them better customers? You...you said...What'd you say just a minute ago?...They had to wait and save their money before they even ought to think of a decent home. Wait! Wait for what? Until their children grow up and leave them? Until they're so old and broken-down that they...Do you know how long it takes a working man to save five thousand dollars? Just remember this, Mr. Potter, that this rabble you're talking about...they do most of the working and paying and living and dying in this community. Well, is it too much to have them work and pay and live and die in a couple of decent rooms and a bath? Anyway, my father didn't think so. People were human beings to him, but to you, a warped frustrated old man, they're cattle. Well, in my book he died a much richer man than you'll ever be!

We need more Baileys and fewer Potters, the latter which seems to be an increasingly acceptable role model.

We need and as a nation deserve better. There are ways to get there, but both the liberal and conservatives will rant and rave because neither would have sole control over the process. Indeed what I envision is a responsible business community working with a government acting as a facilitator towards a nation with opportunity which we no longer have and a robust middle class which is as quaint a concept as the exchange above.

 

[Atreus21]

I don't have sufficient intellect to refute this entirely, but I can't help but wonder what any proposed solution to this might be. It's similar to the idea behind Global Warming. Are we going to do everything we can to institute a global stunting of innovation?

Economies are driven by what people need. If there is no need for a product, it isn't produced. Is it possible to imagine a scenario in which there is no need for humans to work? How can a scenario like that possibly exist unless an unimaginable amounts of goods are produced such that work becomes unnecessary and a majority of basic needs are fulfilled?

I think the flaw in this theory, as I stated in Woolfe's linked thread, is that it assumes that everything about the economy changes yet humans' lifestyles remain largely unchanged.

Also, I'd like some proof of the claim that unemployment is high right now because of innovation.

 

[BoberFett]

It's going to be interesting, that's for sure. The conservative answer of "Get a job you lazy bum" is a non-starter. But the liberal answer of "Raise taxes on the rich" isn't a long term solution. At some point money becomes immaterial. Money is a means of trade. When a wealthy person no longer needs to trade with common people because their robots do everything for them, they're no longer wealthy in the traditional monetary sense. How do you tax them? Take a robot away and give it to a poor person?

 

[BoberFett]

Also, I'd like some proof of the claim that unemployment is high right now because of innovation.

Millions of jobs have been offshored due to advances in communication. Just look at the trade deficit. If everything Americans consumed today was produced here there'd be no unemployment.

 

[poofyhairguy]

Considering that today Oxfam published a study according to which the richest 85 people in the world have more wealth than the poorest 3.5 billion, that's definitely not good news.

Sure but those 85 people don't have all their wealth in bars of gold. Then have it invested in things like stocks, mutual funds, real estate, etc. Therefore they have the most to lose if there is some sort of social unrest that crashes the stock market or the housing market.

Given that, I think this century we will see more forms of wealth redistribution. But instead of being based on compassion or a safety net, it will basically be a bribe from the upper class to the lower classes to preserve stability and economic growth. How big your bribe is will depend on how much leverage your unhappiness can have on their investments- so for example and American will get a bigger bribe than an African.

 

[Atreus21]

Millions of jobs have been offshored due to advances in communication. Just look at the trade deficit. If everything Americans consumed today was produced here there'd be no unemployment.

And there's also be enormously higher prices.

 

[IGBT]

I've seen some of this show up in the form of IBM Maximo. I suspect asset management is the wave of the future. From a Maximo point of view we are all "assets" requiring management and endless time study.

 

[Hayabusa Rider]

I don't have sufficient intellect to refute this entirely, but I can't help but wonder what any proposed solution to this might be. It's similar to the idea behind Global Warming. Are we going to do everything we can to institute a global stunting of innovation?

Economies are driven by what people need. If there is no need for a product, it isn't produced. Is it possible to imagine a scenario in which there is no need for humans to work? How can a scenario like that possibly exist unless an unimaginable amounts of goods are produced such that work becomes unnecessary and a majority of basic needs are fulfilled?

I think the flaw in this theory, as I stated in Woolfe's linked thread, is that it assumes that everything about the economy changes yet humans' lifestyles remain largely unchanged.

Also, I'd like some proof of the claim that unemployment is high right now because of innovation.

There is one fundamental unchanging overarching factor. Profit. If it makes more money to move jobs overseas then they go there. If automation does the same then that's what the bean counters will embrace.

That's one reason I had a chuckle when I saw a thread about resolving economic issues by cutting taxes. That's rather pointless because businesses will say "that's nice. Please give us the break so we can expand somewhere else in the third world" There is no incentive tied to reforms, just lists on a partisan dance card to punch out and pretend that the core issues have been addressed.

So the bottom line is this- ask yourself if an action cuts payroll. If it does it's adopted. If not then no. I'm sure someone can find some exception, but largely that's how business is done.

 

[BoberFett]

And there's also be enormously higher prices.

That may well be, but the fact is the wealth creation would happen here instead of elsewhere.

 

[Atreus21]

There is one fundamental unchanging overarching factor. Profit. If it makes more money to move jobs overseas then they go there. If automation does the same then that's what the bean counters will embrace.

That's one reason I had a chuckle when I saw a thread about resolving economic issues by cutting taxes. That's rather pointless because businesses will say "that's nice. Please give us the break so we can expand somewhere else in the third world" There is no incentive tied to reforms, just lists on a partisan dance card to punch out and pretend that the core issues have been addressed.

So the bottom line is this- ask yourself if an action cuts payroll. If it does it's adopted. If not then no. I'm sure someone can find some exception, but largely that's how business is done.

Then why haven't all bank tellers been laid off? Or cashiers? The technology to utterly replace them not only exists but is in place. Yet it has been implemented on a limited scale. Why?

I think you view businesses as being driven by faceless, ruthless, greedy bastards. To me, that isn't at all an accurate impression of the several businessmen I've met, including the owner of the company where I work and his family. Most of these people want to keep their operations here unless compelled to do otherwise. Is it any coincidence that automated-burger-makers are coming into place just as human-burger-makers are trying to artificially price their labor higher?

 

[Atreus21]

That may well be, but the fact is the wealth creation would happen here instead of elsewhere.

Wealth creation? By having higher prices?

A million workers getting jobs vs. the entire consumer base having to pay higher prices is not an easy decision.

I think it was Thomas Sowell who said that in economics, there are no solutions. Only tradeoffs.

 

[glenn1]

If half the population is out of work but due to high productivity, goods and services are cheap, having a safety net will be a no-brainer. If for no other reason than to stave off political and social unrest, i.e. what you refer to as the "French revolution."

I'm not as cynical as you are. I seriously doubt apoclypic scenarios including global revolutions and other conflagrations. I think enlightened self-interest will likely be sufficient to avoid the most extreme outcomes. There will be pain along the way though.

Bring on the revolution. Do you honestly think I care if some urban yuppie liberals get guillotined?

 

[Hayabusa Rider]

Then why haven't all bank tellers been laid off? Or cashiers? The technology to utterly replace them not only exists but is in place. Yet it has been implemented on a limited scale. Why?

I think you view businesses as being driven by faceless, ruthless, greedy bastards. To me, that isn't at all an accurate impression of the several businessmen I've met, including the owner of the company where I work and his family. Most of these people want to keep their operations here unless compelled to do otherwise. Is it any coincidence that automated-burger-makers are coming into place just as human-burger-makers are trying to artificially price their labor higher?

The technology is in place and it is used. It comes down to profit. If the perception is that a "human presence" adds an intangible value they will remain as long as the judgement of management is that it is more profitable to have people.

You seem to be laboring under a misunderstanding. Businesses are varied and you have found exceptions, however it is the aggregate which drives trends, and the majority of corporations don't have "that human touch" on the ledger. You are assigning moral qualities, which sometimes do come into play, but are mostly a matter of behaviors corresponding to natural ecosystems. Corporations are effectively top predators and survive by analogous means. Are sharks greedy? Evil? When they take a chunk out of you is if borne of malice? No, it's completely amoral, looking for food. It's a matter of maximizing thermodynamic return. Getting the most food for the least effort. Likewise profit is food and the path to maximizing that is to "increase productivity" meaning fewer people are needed to do a given number of tasks. Show me successful company who retains more people than it needs because it feels sorry for them. How many compared to the whole?

Companies aren't driven by nobility or sympathy or good works. They are looking for maximal return on investment.

 

[theeedude]

The technology is in place and it is used. It comes down to profit. If the perception is that a "human presence" adds an intangible value they will remain as long as the judgement of management is that it is more profitable to have people.

You seem to be laboring under a misunderstanding. Businesses are varied and you have found exceptions, however it is the aggregate which drives trends, and the majority of corporations don't have "that human touch" on the ledger. You are assigning moral qualities, which sometimes do come into play, but are mostly a matter of behaviors corresponding to natural ecosystems. Corporations are effectively top predators and survive by analogous means. Are sharks greedy? Evil? When they take a chunk out of you is if borne of malice? No, it's completely amoral, looking for food. It's a matter of maximizing thermodynamic return. Getting the most food for the least effort. Likewise profit is food and the path to maximizing that is to "increase productivity" meaning fewer people are needed to do a given number of tasks. Show me successful company who retains more people than it needs because it feels sorry for them. How many compared to the whole?

Companies aren't driven by nobility or sympathy or good works. They are looking for maximal return on investment.

Fine, but then don't go around blaming the so called "47%" for voting to maximize benefits to themselves. If corporations can act solely to maximize their income, so can people by voting themselves more benefits courtesy of taxes on those corporations and their profits.

 

[BoberFett]

Wealth creation? By having higher prices?

A million workers getting jobs vs. the entire consumer base having to pay higher prices is not an easy decision.

I think it was Thomas Sowell who said that in economics, there are no solutions. Only tradeoffs.

Fail. Money is not wealth. The cost of an item in dollars is meaningless for this discussion. Wealth is the goods and services produced. Those goods and services are now being produced elsewhere.

 

[Hayabusa Rider]

Fine, but then don't go around blaming the so called "47%" for voting to maximize benefits to themselves. If corporations can act solely to maximize their income, so can people by voting themselves more benefits courtesy of taxes on those corporations and their profits.

I am providing an analysis. If you wish to assign blame there's plenty to go around. One can always burn down their home to take revenge on another, but that seems hardly productive. I do not hold those who exist for their personal gain above all else in high regard regardless of income bracket. 47%. 53%. Any percent is irrelevant and that's what we need to solve, and that's your hatred for those you deem unworthy and theirs for you. Pyrrhic victories aren't worth winning.

 

[Atreus21]

Fail. Money is not wealth. The cost of an item in dollars is meaningless for this discussion. Wealth is the goods and services produced. Those goods and services are now being produced elsewhere.

Yes, the wealth is being produced elsewhere, then...exported here.

 

[theeedude]

I am providing an analysis. If you wish to assign blame there's plenty to go around. One can always burn down their home to take revenge on another, but that seems hardly productive. I do not hold those who exist for their personal gain above all else in high regard regardless of income bracket. 47%. 53%. Any percent is irrelevant and that's what we need to solve, and that's your hatred for those you deem unworthy and theirs for you. Pyrrhic victories aren't worth winning.

I am also providing an analysis. It's not about revenge or hatred, being worthy or unworthy, it's about maximizing financial benefit to yourself, by any legal means necessary, voting being one such means.
If corporations are people, my friend, we should not hold people to a higher standard than corporations. People should then act solely on their own financial self interest, just like corporations.

 

[Engineer]

And there's also be enormously higher prices.

and wages would be higher to compensate. Add the fact that you would probably have little to no monetary deficit by the government, welfare would be reduced, on the job education would be far better for the people who are not college material (they would be learning trades and skills from working the factories instead of at McDonalds). The famous 47% would probably be closer to 4.7%.

Just keep going the way we're going and eventually, it will all have to be scrapped and started over, when in reality, it could have been fixed, or even avoided.

 

[Jhhnn]

I'm sure there are plenty of Bangaladeshi executives that could do just as well (or even better) in absolute performance terms than American ones, and that's even without relative pay considerations even coming into play. And yes, I believe that pay should be linked to performance and not geography. This holds regardless of the crazy ass system we have for determining executive pay in the U.S. American corporations have been far quicker to spread the net worldwide in looking for labor, the next logical step is to extend the talent search to the ranks of senior management.

So tell us, who'll pay the mortgages on the vast expanses of suburbia? The energy bills? Car payments? The doctor? The dentist? everybody else?

Bangladeshis, perhaps? How would they do that?

 

[Engineer]

I am also providing an analysis. It's not about revenge or hatred, being worthy or unworthy, it's about maximizing financial benefit to yourself, by any legal means necessary, voting being one such means.
If corporations are people, my friend, we should not hold people to a higher standard than corporations. People should then act solely on their own financial self interest, just like corporations.

Absolutely. I'm the CEO of ME and I'm the only shareholder of ME. It's my job to maximize my revenue and profit. Strange that others doing the same are slaughtered in the public eye of certain types....the same types to praise and encourage CEO's of corporations for doing exactly the same thing.

So tell us, who'll pay the mortgages on the vast expanses of suburbia? The energy bills? Car payments? The doctor? The dentist? everybody else?

Bangladeshis, perhaps? How would they do that?

In other words, once the foundation is completely ripped out, who will hold up the building?

 

[Hayabusa Rider]

it's about maximizing financial benefit to yourself, by any legal means necessary

And that is why we fail as a people. There's not much difference between these conservatives and liberals. A society where people have opportunity and an obligation to take advantage of it? Not wanted, not really. Suffering is the means to political gain. Cooperation and mutual advantage? Where's the fun in that?

 

[OverVolt]

People need to be trained for these jobs. I'm 100% certain the average person can do these jobs if the school system was teaching people the right skills. Thats the real problem is getting the required job training for tech jobs.

And for that matter de-stigmatizing trades because physical shit will still have to be built.

 

[OverVolt]

And that is why we fail as a people. There's not much difference between these conservatives and liberals. A society where people have opportunity and an obligation to take advantage of it? Not wanted, not really. Suffering is the means to political gain. Cooperation and mutual advantage? Where's the fun in that?

I think that is economic neoliberalism? Its just an idea, money isn't the only source of power. In some points in history ones moral standing counted more than your ability to make money but that has changed. I think we go through cycles. This is definitely not the first time money has gained too much power over people and it won't be the last.

We owe alot of what we have today to people making decisions for the greater good instead of for a grater bank account balance. We really, really take it for-granted.