Originally posted by: BigDH01
Originally posted by: Genx87
This is overly simplistic and not really supported by any real world facts. If what he claims is true then why is our unemployment avg about 5-7% over the past 50 years? Shouldnt it be steadily increasing? Especially with the baby boomers influx into the job market?
This sounds more like a sky is falling article to me. He doesnt even acknolwedge the majority of the world hasnt even industrialized in any meaningful fashion. Those economies and peoples are just starting to create viable consuming middle classes that will require goods be created and sold by people who do the heavy lifting.
Until we have a robot race with AI that matches our intelligence. I dont think we need to worry about end of jobs as we know them. People's job titles and responsibilities will simply shift.
Unemployment was relatively low after WWII, but you'll if you go
here, you'll see that although volatile, unemployment as a trend was increasing (peaks and valleys getting higher and higher after the 60s) until the early 80s when we basically adopted the mantra of Reaganomics and debt, both public and private, began to explode.
Consumption has been driven by the ability to accumulate new debt. Had we maintained spending and saving habits that prevailed throughout the middle of the century, unemployment would likely be higher. Last time I looked at the BLS numbers, capacity utilization in the US are running at about 68%, which is one of the lowest numbers on record and with jobs still being lost, demand is still growing weaker.
This is due to many factors. One being that unskilled labor is moving to those countries that are rich in labor factor endowments. This has been covered ad nauseum, but suffice to say that as long as international capital movements are relatively mobile, unskilled labor positions will continue to leave the US.
Second is that people are simply losing any vehicle they might have to accumulate more debt. For most Americans, their houses are their single most valuable asset. However, right now a substantial number of mortgages are upside down. If these houses were purchased at bubble prices, it may take 10-20 years to come back, and that's being optimistic in presuming that we do see job growth and increased demand. Of course, it's no secret that many Americans were using their homes to finance lifestyles they couldn't afford and thus stimulating demand. Depressed home values have a dramatic impact on consumer spending, either because no more equity can be withdrawn or because of the decreased "wealth effect."
I have the productivity discussion with a friend somewhat regularly. He simply believes that labor will shift to new markets where it can once again be productive and thus create wealth. This is true to some extent, but any new conceivable market in the US is likely one involving skilled labor. For instance, replacing factory workers with robotics does create new jobs for people who maintain and program the robots, but it's likely that the robot tech jobs number fewer and are more skilled than the jobs the robots replaced. It basically has an effect of shifting labor from unskilled to skilled. While new jobs are created, there is an increase in the barrier to entry for labor. The higher the barrier goes, the fewer people that can meet it. There is simply going to be some percentage of the population that cannot meet that barrier due to simple innate ability. The more skill the job requires, the higher that percentage becomes. What do you do with your population that's not skilled enough for another profession and who's job was replaced or outsourced?
By virtue of increasing the barrier to entry, labor factor mobility within the US is greatly reduced. I find it amusing that many feel the solution to the "labor problem" is simply to re-educate the workers. I mostly find it amusing because higher and adult education programs are often the first areas to take budget cuts when things get tight. The remainder of my amusement comes from the fact that the requirement for re-education is indicative of the skill problem. Unskilled and skilled labor cannot simply take those skills and reapply them somewhere else without rather large transactional costs. They have to go to school, thus losing time and money. If we accept that re-education is the way to increase labor mobility, society ought to at least consider paying for it in my opinion. It would certainly level the playing field with regards to the mobility of capital compared to the mobility of labor.
I think the classic Liberal's view of this would simply be that unskilled labor would simply move to where unskilled labor is demanded, like China. While this might work in a world of no immigration laws (and no transactional costs for an American moving to China, which is half a world away with an entirely different culture), in our world this is practically impossible. It leaves us in a situation where we have unskilled (and some skilled) labor that has nothing to do and nowhere to go. This situation has been a long time coming, but the policies and behavior from the early 80s have delayed its onset (massive deficit spending from the government and private debt accumulation creating demand). I honestly think we've run out of time.
This will eventually be a worldwide problem as well. In meeting basic human needs, modern farming and manufacturing techniques have greatly increased the productivity of any individual worker. And while those displaced workers might specialize, how many specialists do we need? How many financial analysts, market analysts, programming analysts do you need before their marginal utility is so low that you're basically just paying them to sit in a chair and be somewhere? We may be becoming victims of our own success.
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