Where did all the jobs go? Computers killed them.
The world is undergoing a mega shift and most of the governments have no idea how to handle the problem. Computer power has reached the point where almost any job can be automated, and computer pricing has reached the point where it is profitable to do so.
When people think of automation, the first thought is of robots working on a production floor in manufacturing but that is just the tip of the iceberg. The real job killers are the things around us every day that we never notice.
The internet has been the biggest job killer in history. If you look at the rise of the internet and the job participation chart, you will see that as the internet grew, jobs shrunk. This trend will continue.
Look at the Kindle, a nifty little device. Before the Kindle, if you wanted a book, you hopped in your car, drove to a bookstore, and bought a book. Books were printed, shipped to bookstores, put on shelves, then a clerk took your money. Today, you go on the net, find what you want and punch a button. In seconds, you have the book at your fingertips. No printing, no binding, no shipping, no wear and tear on your car, no gas used, never talk to a human.
No one thinks of a Kindle as automation, but it is. Because of the Kindle, trees do not have to be grown, paper does not have to be made, shipping does not have to be done, printing does not have to be done, and bookstores are put out of business.
Email is another job killer. The USPS is basically going to lose 300,000 people because of e-mail. Unseen is the loss of jobs in making envelopes, stamps, gas usage, and wear and tear on delivery vehicles.
Well you get the idea. We are in fact going through another great shift similar to the destruction of farm labor in the 1920s. It took nearly 20 years to work through that one. So lets see – 2008 (the great crash) plus 20 = 2028 before things return to a semblance of normal. For the world as a whole it was more like 40 years. That would be around 2048. Let us hope we don’t need another World War to substitute for creative destruction.
Comments
15 responses to “Where Did All The Jobs Go?”
In the republican attempt to destroy the unions they alowed millions of jobs to go oversea and actively assited in this! Reagan alowed the japanese to dump cars over here and after he left office and got millions of dollars in speeches on selling out the american worker. When Lee Iacocca heard about the money reagan got he said I always wondered why he let the japs sell a toyota in new york with the destination charge included for less money then it cost to buy the same car in toyko! He said hell I would have given reagan $3 million dollars for a speech not to sell us out! Wages have been flat when adjusted for inflation since reagan took office! There is a simple solution to problem other countrys must buy within 90% from us what they sell to us. And value added tax on products coming into this country would elminate or deficits and give us a surplus! Though politicians say they and their familys would be killed by business interests if they supported this.
It is not computers killing the jobs, it is Big Government. All of those resources that would have gone into the printed books int the example you gave, normally would have been freed up for other uses, which would create other jobs. But in the era of Big Government, those freed resources are stolen by the government through taxes, new debt and an increased Fed balance sheet, and then wasted. Thus the normal flow of resources freed by technologically fueled productivity gains is destroyed.
It is important to find the right cause, if we are ever going to right this situation. Blaming the computers is a red herring. Increased productivity is always, always, always good. It by itself always increases the standard of living. But it can’t do so if governments suck all of the resulting gains into themselves where they are destroyed by spending them with zero productivity, or worse, by creating a regulatory environment which effectively turns government into negative, not just zero, productivity.
Glenn Reynolds noted that today is the 75th anniversary of Kristallnacht, with the thought that it’s easy to see how it happened considering what people are shrugging off today.
http://abcnews.go.com/International/world-shrugged-off-kristallnacht/story?id=20826565
Is Geneva going to be our Munich? That treaty was signed on September 29, 1938. Little over a month later on November 9 the Nazis started their pogrom.
Antisemitism is gaining everywhere. One can barely stand to read websites like zerohedge because they are full of it. A week ago a high school boy in Berkeley was set on fire. His crime was wearing a kilt-like dress on a bus. He is recovering with 3rd degree burns on half his body. His name is Luke “Sasha” Fleischman. The 16 year old black boy who did it admits homophobia but hasn’t owned up to Jew hated, yet. Considering Black Muslim influence in that community it wouldn’t surprise.
In memory of those millions who eventually were slaughtered, and in solidarity:
http://www.thecommentfactory.com/wp-content/uploads/2009/01/leahborromeo.jpg
David,
It is true the resources are released. But there are mismatches and transition times. In the current case: are auto designers and labor suited to biotech production? Maybe. But it takes time to learn new skills and unlearn old habits. And redeploying resources takes time. And also requires unlearning old ways. “We have always done it this way” is a common human frailty. Quite useful a lot of the time. Useless in transitions.
The farm laborers eventually went into manufacturing. But not the same ones that lost their jobs. The great transitions take about 20 years – one generation.
Have a look at some pieces I did on the Kondratieff Wave.
http://powerandcontrol.blogspot.com/2008/12/secular-decline.html
http://powerandcontrol.blogspot.com/2009/10/something-is-missing.html
As much as I despise government we are probably managing the transition reasonably well.
Take another instance coming soon. What happens to cab drivers when vehicles no longer need drivers?
And craptain,
No buggy whip union is going to save buggy whip maker jobs. The best they can do is make the decline faster by overpricing buggy whips.
Simon,
Thank you for your thoughtful reply.
I agree that there are transition effects. And I agree with your Kondratieff observations in the linked posts. These are real and valid effects. I have no quibble with that.
But it is the wrong place to focus if you are looking for a solution.
These waves are a natural result of economic activity. You can’t eliminate them, and you can’t force a new wave. But what you can do is make the transitions and the economy more efficient.
If you take away the 40% to 60% wedge that government extracts from essentially all transactions, all of a sudden huge numbers of transactions that are unprofitable in the current environment would become profitable. Employment would explode. This doesn’t take any new technology. It doesn’t take any new resources. It just requires an end to wasting 40% to 60% of GDP each year on rent seeking drones, and eliminating the many many many barriers to efficiency in the employment area (e.g. minimum wage laws, child labor laws, arcane rules about hiring and firing, discrimination laws, licensing laws, labor law, the gazillions of regulations, forms and reports demanded of any business, etc.) Absent these tax and regulatory wedges, we would have essentially full employment, and jobs would be easy to find. Highly skilled workers in fields being displaced by computers would most likely have to take an interim wage cut, but there’s a big difference between that and the current situation of no jobs at all.
Take away these things, most of which have no cost to implement, and you more than counter the cyclical drag and productivity transition effects that you are looking at.
Additionally, we are very close to entering an age of abundance, due in large part to those very computers that you implicate as the problem. If governments weren’t wasting 40%- 60% of our production every year, our standard of living would be so high that the pain caused by the transition effects would be along the lines of cutting back on a few luxuries, not necessities as is now the case.
David,
I’m a computer designer.
Second. Back in the 20s and 30s when government cost was much less the transition was still difficult.
You might want to also look at the transition caused by low cost iron. I think 20 years is a built in number caused by human nature. I don’t think there is anything governments can do about it. Other than theft to ease the pain. And for me that is a very sad conclusion. Because when the transition is over we are left carrying a LOT of dead weight.
As to avoiding government? It is not too difficult on a small scale. It is why there are black markets.
We are in some respects fortunate that the coming generations – due to Drug Prohibition – are viscerally government adverse. The pruning of government will be much more rapid at the end of this transition.
Simon,
I’m not sure what you being a computer designer means with respect to this subject.
I’m not the greatest economic historian, so this is a weak area for me. But you don’t have to look very hard to see the government’s fingerprints all over the 1920’s to ’30’s. The massive inflation and debt increase from WWI, the creation of the Fed in 1913 which promptly blew it’s first major bubble with the massive debt driven blowoff and ’29 crash, the introduction of the income tax, and the start of all the social welfare programs. Government spending wasn’t as high as it is now, but it was on a rapidly escalating climb during this period. And much of the stealing then (and now) was via the Fed’s inflation.
I’m not exactly sure which 20 year period you are referring to in the transition to low cost iron. But throughout the time period when the iron technology was most rapidly changing, there were massive government theft of wealth including but not limited to the French inflation of the early 1790’s, the Napoleonic wars, the enclosure acts starting around 1750 and lasting a century, the corn laws 1815. The latter two thefts weren’t so much takings by the government directly as they were transfers from the poor underclass to the wealthy aristocratic landowner class which controlled the government. These types of actions cause more pain than the technological transition itself.
I hope you’re right on the younger generation’s dislike of gov’t.
Theft by government seems to be another feature of human nature.
What does me being a computer engineer have to do with it? You said:
Additionally, we are very close to entering an age of abundance, due in large part to those very computers that you implicate as the problem.
It was farm machinery in the 20s. Yes abundance will be the result. But as usual the changes will be wrenching.
Ideally you are correct in your analysis and prescription. But humans are quite far from ideal. The desire for theft seems to be built in.
We are quite fortunate to have gotten as far as we have given the level of defects.
My plan is not to save buggy whips they are not made out of the countrty and sold here. The things we need should be made here not dumped here from over seas. Desperate people will support desperate measures not esoteric ones! You may not like are solutions to the problem :but we have the them on the left and desperate people won’t listen to your libertarian or lassiefare capitalist dogma! If they are out of work and they are hungry the workers in this country won’t lay down and die like the dinosaurs no matter how much you tell them thy should because they are obsolete to your business model and no you can’t put them all in private prision as slave laborers though they are trying that in arizona!
craptan,
Ah yes. Solutions on the left.
Ein Volk. Ein Reich. Ein Fuehrer.
They always end badly. And slave labor? That will be the medical profession under Obama Care. The Right is generally too meek for the Grand Solutions of the left. Heil Obama. The best the Right can come up with is one lone sheriff in Arizona. Pikers.
And how about that Obama continuing the Drug War. Which is mainly an attack on black men. Too funny. And racist.
That arizona sheriff has radicalized the mexican-americans the way we on the left were never able to do with help from govenour drunk driver brewer(google jan brewer drunk driving accident) attorney general hit and run horny dog tom horne and russel pierce and his neo-nazi friends.
The attack on the Berkeley teen is not getting the sort of national attention it ought to be getting. Interestingly, his male friends at school wore skirts as a display of solidarity with him:
http://www.nbcbayarea.com/news/local/Berkeley-High-School-Students-Wear-Students-to-Honor-Sasha-Fleischman-231140321.html
[…] has not gotten the attention it should have, I mean it. I try to keep up with the news, but had M. Simon not mentioned the incident, I probably would never have heard about […]
Hey, craptain, ya leftard moron: The new slave class is productive workers, who labor to support a new leisure class of welfare leeches.
New game called “KNOCK OUT THE JEW”:
http://newyork.cbslocal.com/2013/11/12/brooklyn-rabbi-gang-of-teens-playing-disturbing-game-of-knock-out-the-jew/