Technology, jobs and unemployment...

[Cassius23]

I was reading in regards to the latest unemployment numbers and wanted to throw a theory out at you guys. I've been researching it for awhile and this is the bare bones outline.

Before I begin, though, I'd like to state the following presuppositions.

A. Technology not only works to improve life, but it also works to save effort and labor.

B. We can only consume a finite amount of any particular thing.

There may be more presuppositions that I am not aware of, but those are there at least.

Now, one of the reasons(not THE reason, but a factor that a lot of people don't think about) that unemployment is steadily on the rise can be summed up by the following argument. One of the purposes of technology is to save effort and reduce the need for labor. This has been seen over and over again in the history of humanity. What used to take 10 workers now only takes 2 and those 2 can produce 5 times what those 10 workers could. This reduces the need for the same number or even a similar amount of people to produce a particular good. Those people remain unemployed and there you have it, steadily increased unemployment over time.

Now there are some very valid criticisms of this idea.

First, this new efficiency can be used to increase total production and thereby profits. The problem with this is that you reach a ceiling of how much people are going to buy.

Second, there are other jobs that can be had outside of the ones you lost. This would be valid if labor saving technology didn't touch every single endeavor humans participate in. Everything from IT to landscaping to writing has been influenced by labor saving technology. No matter where you go fewer people are needed to do the same thing. Also, the innovations that are coming out as of the last 15 years haven't produced any really new technologies that require a new class of employee.

The ultimate conclusion of this is that as more time passes and we improve technology more and more, we will need fewer and fewer people to do jobs(even maintaining the labor saving devices will require fewer and fewer people as the materials and building techniques improve).

What is the answer to this? Sadly enough, the answers are radical in the extreme and would be difficult to implement.

A. Technological resources run out. If we are unable to improve technology or fall into some sort of "Dark Age" then this will not come about.

B. Retrain and pay people to innovate/recreate locally. Buckminster Fuller calculated that most people nowadays consume more resources driving to and from work than they put back into the system that employs them. Those people would actually help the overall resource economy by simply staying home and just going grocery shopping once a week or so.

[spindoctor]

1. Actually, technology (IT) has contributed squat to economic growth.

A reference to the research I am thinking about can be found here: http://www.admiralsolutions.biz

At the end of the day (or rather the millennium), IT investments have had no significant impact on economic growth and there is definitely no causal relation between technology investments and increased productivity.

Of course there are exceptions (Ebay, Amazon, Democratic Underground), but on the flip side of the successful endeavors stand a host of miserably failed projects.
Technology is also not responsible for a loss of jobs, but rather for a shift in jobs. The promise that technology will eventually replace the need for physical labor will be realized right after we create the paperless office.

As for telecommuting, that is the best thing since sliced bread. An article in yesterdays CSM even supports my own theory that it is more productive than going in to the office. Of course not every function can benefit from it. The mailman cannot deliver mail from the comfort of his home.

IF, at some point in the far, far future, we will face a scenario where our entire production is being carried out by machines, then it is obvious that a significant part of the revenue created by the machines will be distributed among non-active laborers as part of a non-working sponsoring program. I could definitely live with that.

Cheers!

[Cassius23]

2. Where are the jobs shifting to?

For example, with the improvements in the way various systems are administered in IT making system admins less and less(but never absolutely) unneeded, there is no job that comes up to replace it. True, you have wireless, Voice Over IP, and security, but when you take into account the steady progress of how technology is improving within IT to make fewer and fewer people needed, the jobs created and/or shifted just aren't enough to make up the difference.

And technology will never replace the need for physical labor but it will reduce it to the point where we won't be able to shift or replace those jobs. Manufacturing jobs in the US are the best example of this. Some of the jobs lost are moved out of country but a good deal of them are just gone due to improved methods of production.

[spindoctor]

4. You need to look at it in a broader perspective

Suppose everybody's jobs were replaced, then we would need more librarians, tourist-guides, lifeguards, DJ's and whatnot to maintain, entertain and contain the unemployed masses.

We've seen incredible technological advances in the 20th century. Some professions have become extinct: Launderer, Blacksmith, Town-Cryer, Telegraph Operator, Trapper, Tinker, etc.

Yet unemployment figures have not significantly changed since we started capturing them (give or take some cyclical ups and downs).

Economy is a force of nature. It has a way of leveling itself out no matter what we throw at it.

As an IT-er I am concerned about developments in the industry, but I am not by definition opposed to picking up a career in landscaping ;)

[punpirate]

7. I'd really like to see a source for the assertion...

... that most jobs are lost due to improved means of production as opposed to offshoring, because virtually all of the evidence in the last fifteen years indicates precisely the opposite.

And, logically, the best means of production can be employed in Kankakee or Kuala Lumpur. So, why are the jobs moving away? Because of trade agreements favorable to the US, a tax system in this country favoring such and cheap labor overseas, all of which encourage it. To say otherwise, I think, is being disingenuous.

[Spinzonner]

3. Mail, how quaint

As the generations that arent accustomed to email and messaging die off and the wireless life becomes more dominant, traditional mail is likely to become extinct except for the delivery of goods.

[spindoctor]

5. See my post above. The telegraph has lost a lot of its appeal too.

The fax on the other hand has proven to be a die hard. Especially considering that it was invented before the telephone.

Oh well.

[punpirate]

6. What you ignore...

... is that technology is ultimately tied to the economic system in which it operates. One of your presumptions is that people displaced by productivity are inevitably cast off. In other societies, other measures help retain workers--for example, in France, by mandated reduced work weeks for equivalent pay. That sort of system directly distributes productivity gains to the workers so that they are not displaced. In this society, those productivity gains accrue only to the wealthy who are the ones who own the very largest amount of corporate stock. (In this regard, remember that, in the case of WalMart, for example, just five people own 40% of that corporation's stock.)

The whole notion of productivity is faulty, in a way--in part because it's been touted as the principal means to economic growth, and yet, it is not. Current times suggest this. There was a detailed, years' long study of the top seventeen industrial nations completed in 1996. American workers were shown to be the most productive in the world in that time period, but actual US productivity was well down on the list. Why? Because US corporate managers pissed away those productivity gains through bad decisions. In the meantime, those productivity gains are clearly maintained mostly through decreased quality of life--Americans now work more hours per year than in any other industrialized country--including Japan. We're the only industrialized country in the world without universal health care--that's also a failure to distribute the gains of productivity.

More to the point, as Paul Krugman says, economic growth is not so much a direct measure of productivity as it is a measure of population growth, which it follows rather closely over the long term. Genuine full employment improves economic growth slightly when it's the norm.

How does advertising figure into the marketing of that technologically-driven economy? You say it's impossible to spend more than a finite amount on goods, and yet, WalMart has made a great deal of money selling ever more junk by virtue of the technological gains from its offshore suppliers, and which has recently been fueled by corporate, governmental and personal debt of staggering proportions. WalMart would be utterly lost on the sidelines had not the Chinese been given, or adopted, such technologies as plastics injection-molding, no matter how large and cheap their workforce, but that industrial capacity did not generate the demand. Advertising did. Therefore, I think that it is possible to generate a demand far beyond need. I also think that technology, in this sense, has enabled a shift of employment--one society benefits by more jobs, another suffers.

In short, it's not just technology itself, it's also the society in which it operates and how that society distributes the productivity benefits of technology. If the productivity gains of the last century had been equitably distributed, we might all be fully employed and living comfortably on a twenty-hour work week.

Another issue in which technology and productivity figure is the tendency of human beings to use technology to destroy the product of human labor through war. We never calculate that destruction as a productivity loss. The taxes paid to the government which are used to wage war are anti-productivity, in very real terms--and yet, they are figured into the balance sheets of defense firms. Economic growth statistics in that regard are highly suspect and thoroughly artificial.

Cheers.

[sweetheart]

8. I think your problems are "mobility" and discounting distance

The US has set about with an infinite-energy paradigm that all inviduals
have the resources to commute 3000 miles each week. This is assisted
by HUGE subsidies to the petrol economy, roads, air travel and other
transport industry. But when you look at it, if these subsidies were
not there, the whole scheme would run flat... not sustainable.

And we are in another generation of the industrial revolution, with one
side the ultra-mobile vs common sense localism. The former goes to
war to secure (steal) energy supplies, denies that the pollution of
this transport-mobility world is affecting climates and presses on to
put 6 billion cars on to the planet's surface. The other side of the
coin sees that the ENTIRE economic system of the former is failed
without the subsidies.

Technology has impacted us more through transport, and this is the
problem as well, a different one than you mention, but, IMO, more
core and critical to our conundrum.

[wli]

9. the new dark age has already begun

US politics is only one of something on the order of eight ongoing major global catastrophes.