May 10, 2013


The Jobs Crisis: Bigger Than You Think (WALTER RUSSELL MEAD, 5/10/13, American Interest)

The American economy is shedding jobs, especially long-term, well-paying jobs with good benefits, and the jobs that replace them are often less secure and less well paid. The relentless transformation of the American labor market is changing the nature of American life, calling into question some of the basic assumptions and building blocks of the last fifty years, and generating a complex mix of political and social pressures that will shake the country to its foundations.

Essentially, the problem is this: automation and IT are moving routine processing, whether that being processed is information or matter, out of the realm of human work and into the realm of machines. Factory floors are increasingly automated places where fewer and fewer human beings are needed to transform raw materials into finished products; clerical work and many forms of mass employment in business, government and management are also increasingly performed more economically by computers than by trained human beings.

The transformation is only beginning to kick in. Self driving cars and trucks may reduce the need for human beings in the transportation and freight industries.  Information processing is beginning to change the nature of the legal profession and even as law school applications fall by almost 50 percent there is much more change to come. Computer assisted diagnosis is making itself felt in health care. MOOCs are likely to change the way much of higher ed works.

It is impossible to say now how far and how fast this process will move, but more and more Americans are experiencing the kind of upheaval that blue collar workers in manufacturing began to experience in the last generation and white collar workers and journalists have felt more recently. We are seeing the greatest wave of economic transition since the mechanization of agriculture reduced the percentage of the labor force engaged in farming from more than half the American labor force in 1890 to less than two percent today. [...]

When 'reformers' like William Jennings Bryan talked about fixing the economy in the 1890s they were thinking about policies that would make the small farm viable. When they thought about providing for American families, they thought about finding ways for new generations of Americans to farm their own land.

In much the same way today, much of our policymaking is about trying to resuscitate the past. Will 'onshoring' revive the manufacturing economy? Yes... but it won't create many jobs. Automation means that a small number of factory workers can produce enough goods for a whole nation, just as a much reduced number of farmers can now feed us.

In the same way, we are going to keep shedding clerical and information processing jobs. There are no policies that can do more than delay the inevitable, just as the host of farm support policies developed during the long transition failed to stop the transformation of agriculture. (These days, farm subsidies developed to help family farmers now mostly fatten the coffers of huge agricultural corporate complexes. More or less the same fate awaits any effort to protect industrial or clerical jobs now: the change won't stop, and the money will end up in the wrong pockets.)

The old jobs are going away and they aren't coming back. More, we can't fix the problem by trying to create new jobs in factories or traditional office bureaucracies to replace the ones going away. We need new kinds of jobs that don't involve manufacturing or traditional forms of information processing. That leaves the service economy; there is nowhere else to go.

It seems obvious enough on its face that the capacity to create ever increasing wealth with ever decreasing labor inputs can not be called a crisis on its face.  Considered in only those terms it borders on the miraculous and is purely benevolent.

The actual crisis that Mr. Mead and others are fretting about is that labor has historically been one of the main means by which we've redistributed wealth and if labor is constantly decreasing in value then it will also be an increasingly ineffective means of redistribution.  So what we actually have is a wealth redistribution crisis.  

Now, many, like Mr. Mead, are still stuck on the job model and envision the possibility of creating masses of boondoggle jobs that will allow us to continue to redistribute wealth via paychecks.  The problem with this vision is twofold: first, the amount of effort expended throughout human history to liberate ourselves from the requirement of labor suggests that, given our druthers, we're happier not having to; and, second, the creation of these unnecessary jobs will retard the very economic efficiencies that are creating such unprecedented wealth in the first place.   It is certainly the case that we could simply accept this trade off--preserve jobs at the expense of efficiency and wealth--it just isn't clear why it would make sense to do so.

Posted by at May 10, 2013 7:36 PM

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