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Bank of England's Andy Haldane Warns Smart Machines Could Take 15M UK Jobs (robotenomics.com)
New submitter Colin Robotenomics writes In an important new paper based on a speech at the trade union congress in London, Andy Haldane Chief Economist at the Bank of England and Executive Director of Monetary Analysis and Statistics has examined the history of technological unemployment and has given a thorough review of the literature and implications for public policy. The media will likely focus on the number of jobs that can be displaced and not necessarily Haldane's points on new jobs being created – both of which are highly important as is 'skilling-up'. His report reads in part: "...Taking the probabilities of automation, and multiplying them by the numbers employed, gives a broad brush estimate of the number of jobs potentially automatable. For the UK, that would suggest up to 15 million jobs could be at risk of automation. In the US, the corresponding figure would be 80 million jobs."
They've been saying this since the 1970s, with all sorts of forecasts of 15 hour weeks. Yet there are many millions now in work compared to the 1970s and everyone's working longer hours than ever.
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That's what a lot of people don't understand. 15 million people not having to do tedious mindnumbing work that can be replaced by a machine is a GOOD thing. The fact that this is seen as bad news is proof of our disfunctional society and economical model. The day basic income comes in together with a reform of our economy, is the day automation will truely be embraced as it should.
In Capitalist US, the commerce controls the Government.
Unless the change happens overnight, society will adapt to take advantage of the huge surplus workforce for jobs that machines can't do.
15M UK people could do something else. The world fails to end.
If this bank doesn't help them find some work, there's going to be hell to raise, especially when 15 million people is about a quarter of the entire UK's population. If a fourth of the US was layed off, do you think that would end peacefully?
Automation makes sense when the job is dangerous or risky to humans, or requires extreme precision. Replacing everything with automated machines for profit gains makes it hard for low end jobs to exist, and thus for low end workers to be employed. We have here a very large mass of people who feel hopeless and have nothing to lose. We also have a very large resentment towards the upper class and a weak middle class. History has presented us this situation before, and I encourage you to research what happened then.
"Set a man a fire, he'll be warm for the rest of the night. Set a man afire, he'll be warm for the rest of his life."
UK population is 64M.
The UK workforce is 30M[1]
You're trying to tell us that half of all jobs in the UK can be replaced by "smart machines"?
Somehow I don't believe that number.
[1] http://www.dailymail.co.uk/new...
The example I keep seeing used is self-driving vehicles, particularly trucks.
They've already proved themselves in mining contexts - they use less fuel, wear their tyres less, less maintenance, downtime, and of course, no wages to be paid.
People are falling over themselves to get them approved for road use. Truck driver is 3.5M jobs in the USA. There are about 285,000 HGV drivers in the UK.
The trend is already that middle class jobs are being eroded and replaced with low waged work. Truck driver is unglamorous but they probably count as middle class guys with the wages they get.
What jobs are we going to find for truck drivers? They're not all going to train up to be robot-truck mechanics (as above, robot trucks are pretty much existing trucks with a few extra sensors and something wired to the power steering etc - and require less maintenance). You'll have all those middle-class people with a lower disposable income, so the market for services and consumer goods will shrink, so what industry will expand or arise to employ them?
Tech changes that increase production, expand wealth and (eventually) the job market. Spinning Jenny and her ilk turned cotton shirts from a luxury into a mass-market commodity.
Tech changes that just do existing work with less human labour do not expand wealth. The automated trucks drivers, administrative assistants, warehouse pickers, burger flippers, etc, etc, that are coming down the pipe do not increase demand - if anything, they decrease it, by reducing the amount of wages entering the economy.
The article is definitely correct on one point. It says "The media will likely focus on the number of jobs that can be displaced and not necessarily Haldane's points on new jobs being created." And the /. headline? "Bank of England's Andy Haldane Warns Smart Machines Could Take 15M UK Jobs."
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I assume you were around 200 years ago saying the sky was falling because of mechanisation of agriculture, too?
Now we have about 2% of the population who work on farms. It's a shame about our 98% unemployment rate.
No,because it's from those morons in threadneedle street,they are so far removed from reality and so used to lying about everything that you cannot trust a word they say. According to them,interest rates should now have been going up for a year,same in USA,idiots with fingers crossed that wishful thinking works...
$15/hr movement isn't moving fast enough for my robots to take over and make my order right 100% of the time, every time.
In Bertrand Russell's example, no one of the needle workers actually strives to improve his skills. But instead, the companies replace the old needle manufacturing equipment with new ones which doubles the productivity of their workers, and all of the workers get retrained for the new process. So yes, the inventor of the Improved Needle And Pin Machine gets his share, as he has outfitted all needle manufactures with his new invention. But the global market for needles does not increase, as needles are totally cheap already. A lower price for needles does not increase demand. So what we have now is companies with 100 percent surplus manufacturing capacities competing in a tight market, and half of them will get bankrupt in the process (it may be purely random which one get hit), until the manufacturing capacity for needles fits the demand again. It means half of the workforce will be out of a job, even if they don't differ in any way from the part of the workforce, that is still employed.
So contrary to your hypothesis, it's not the individual strive or laziness that made the difference between unemployed and employed needle workers. It's pure random chance. They all trained for the new manufacturing process, they are all equally skilled. But they were just to many, if they kept their working schedule.
For economists and planners, the world of tomorrow is always the world of today, plus a little bit of what's already going on today. Forecasts of doom because of the 'machines take over' have been around since a long, long time.
Religion is what happens when nature strikes and groupthink goes wrong.
In other news, the invention of the modern light bulb will put thousands of whale hunters, butchers and ship owners out of work, endangering their retirements and family healthcare plans.
Surplus workers. What do you suppose generally happens when there is a surplus on the supply side?
Typically, production drops and prices fall. Bad news for the supply side. Of course, it's not terribly ethical to destroy inventory or ship it off to a secondary market when that supply is human beings in need of a job. At the same time, the production process is fairly long (18 to 22 years). That's a lot of people making less than it costs to support oneself.
So no, throwing up our hands and claiming "the market will take care of it" doesn't suffice when the "product" is human beings. The market (and the economy it lives in) is a construct of man that should serve our needs, not the other way around. If the economy does not serve our needs, it must be changed.
Simple analogy, if the hammer doesn't fit the human hand, you need a different hammer, not hand surgery.
Unless the change happens overnight, society will adapt to take advantage of the huge surplus workforce for jobs that machines can't do.
The largest mistake right now is assuming change cannot happen "overnight".
It can. It likely will. And we as a society are not prepared. At all.
That's the elephant in the room. Economists (especially those who occupy armchairs or political office) have miossed that the industrialization that improved everyone's life in a free(-ish) market did so because there was a severe labor shortage and even then, it only worked out after a great deal of civil unrest including a number of fatal confrontations.
The current industrial revolution is taking place during a labor surplus. Freeing humans from the need to labor is a laudible and achievable goal but the labor market and it's imaginary magical invisible hand isn't up to the task.
All labor can be automated given enough time. The solution is not to require labor to survive. Star Trek economy is the eventual end-state of where we're going.
The long term unemployment rate is 10%, short 5%, underemployed over 20%, wages down 20%. Bleak picture. The only beneficial shift that I can see is free continuous education (MOOC, etc).
If you look at corporate structure, many companies exceed 50% of their operating budget in Marketing (whether they show it on their 10k or not). That's where the jobs went. If you want value in a product then buy from the few companies that focus on operations (Costco, etc).
Tech changes that just do existing work with less human labour do not expand wealth.
Of course they do. If you can automate something and reduce costs, then you can sell your product more cheaply. Cheaper products mean your money is worth more; therefore wealth has been created.
And by "adapt", you mean "either learn to live with much higher poverty levels or come to terms with a much larger welfare state."
Because there really aren't any other choices. The world has reached peak jobs.
You are welcome on my lawn.
The wages to be paid are in the manufacture (not to mention design) and maintenance of the automatic drivers. If you have a fleet of 100 trucks, sure, you might eliminate "unskilled" drivers jobs, but the maintenance of the machines will actually increase o.k. - driver error induced maintenance will fall, but, basic wear and tear will be the same, and the automatic driver itself will be an important maintenance item.
Somebody has to keep the lenses clean, or at least fill up the tanks for the automatic lens cleaners, or design, build and maintain the systems that do it automatically.
I'd like to think that out of those 100 truck drivers who are working 60 hours a week, we might retrain 10 of them to work 30 hours a week at the skilled jobs related to automatic trucking, another 40 to work manufacture and maintenance 30 hours a week - so that the current crew that's working 60 hours a week can also work 30, and the other 50 can do something to benefit society besides piloting a big chunk of metal around in circles.
The place where capitalism is failing (in America) is keeping high levels of unemployment, simultaneous with long hours for those who are working.
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Likely somewhere inbetween.
If 50% of the workforce becomes unemployed, wouldn't it be nice if we could all work 7 hours a day, 3 days a week?
The Bank of England is I guess the equivilent of the federal reserve in the US. It's more of an arms-length somewhat independent institution that keeps an eye on the economy and sets interest rates etc. They are not big employers, this is just an observation.
Jason
Almost everyone used to work on the farm. Now almost no one does. Amazingly, we don't have a 98% unemployment rate. With the automation of agriculture, everyone moved to manufacturing jobs. Food fell from almost all the family budget to about half the family budget, and people could buy manufactured goods, so there were lots of jobs.
With the automation of manufacturing (which, if you weren't paying attention, is almost finished at this point), everyone moved to service jobs and paper-shuffling jobs. Food fell from half the family budget to far less, and people started eating out regularly, and having food delivered. Manufactured goods became WalMart-cheap, and people spent money on many things they could never afford before.
Now the automation of those jobs is well underway (the paper-shuffling jobs have already been mostly automated). The cost of traditional services, especially logistics, is falling. You can order everything online these days, and everything gets cheaper as transportation costs fall. The cost of manufactured goods will keep falling. In-home manufacturing is a new industry, but it looks promising.
There has always been a new wave of jobs as the cost of what we're used to buying fell, and we found something new to buy. There will be this time too.
Socialism: a lie told by totalitarians and believed by fools.
Why will poverty level go up? Much more will be automated, so it will be cheaper. The net production levels will remain the same.
How many millions had their jobs replaced by mechanised production lines, and then by robots?
As they say in the Market:
"Past performance is no guarantee of future results."
So, what happens if 1/2 the pin factories shut their doors, but the other 1/2 of the pin factories hire their workers part time and double their hourly wages?
The remaining factories still make the same profit, the workers still make the same salary, the world still gets the same pins at the same price, but 1/2 the factory owners are left scratching their heads for what to do that will pay as well as the pin business used to.
In the current system, 1/2 the factory owners AND workers are out on the street, and the other 1/2 of the factory owners are now making twice as much profit as they used to.
Something in-between the two would be more progress than either extreme, I think. But, we've been living the profit to the owners side of the extreme since WWII.
Your lazy ignorance is astounding, and not in the least surprising. "They took our jeerrrrbs!". Idiot.
The inventor is irrelevant in any major industrial venture. If a business sector is turning $1B/year of product (not profits), an invention that improves efficiency 1% is worth $10M/year. Investing $20M to implement the invention is a no-brainer, unless your stockholders demand instant gratification ROI quarterly. In any event, $10M payment to the inventor is in the noise, market variations will impact profits 10x that amount every year.
Unless the change happens overnight, society will adapt to take advantage of the huge surplus workforce for jobs that machines can't do.
That's kind of the point. Since the beginning of the 20th Century, innovation and change have been happening at an increasingly rapid pace.
If we get to the point where disruption happens faster than people can adapt, then everything gets thrown into a cocked hat. Something fundamental will have to change or chaos will result. The kind that brings down empires.
Some think we've already passed that point, based on the fact that real earnings power in the USA has been declining since the 1980s.
In any event, I wouldn't take it on blind faith that everything will sort itself out neatly and painlessly. Considering the fact that the 1980s were also about when it was no longer good enough to be "active" on something and that now everything's got to be "pro-active", the least we could do is be proactive on ensuring that whatever comes up to replace the structures that we have known for the last century give a positive result.
The question isn't what we do when we get to the Star Trek post scarcity economy. The question is more what we do in the between period, because what we're approaching now isn't post scarcity, but rather, an economy where the marginal value of low skill human labor is so low that it's practically worthless for most purposes, and certainly is far below what it would take to maintain a single person at poverty level subsistence.
What we'll need to do is move to a guaranteed basic income. If robots do most of the industrial labor, then we tax that productivity instead of human wages. Give money to people who will spend it on food/clothing/etc, thus maintaining a demand for the goods the robots make (since in a market, you need both supply and demand, otherwise things start going bad quickly on a macro level). Eliminate the minimum wage, since everyone earns enough to live on, and let market forces freely set the value of human labor. $2 an hour is pocket change, but that's really all I'd need it for at that point. You wouldn't need welfare or such, since the minimum income covers it - and it's fair, because everyone gets it. If you make more money, you just add it on top of that - so instead of making $100k, you might earn $80k salary, but get your $20k basic too.
Tech changes that just do existing work with less human labour do not expand wealth.
Of course they do. If you can automate something and reduce costs, then you can sell your product more cheaply. Cheaper products mean your money is worth more; therefore wealth has been created.
If you lay off all your workers then they will not be able afford your products at any price - not matter how cheap. Therefore you cannot gain wealth and neither can they and nothing has been created.
This, exactly.
Back in the mid 18th century there were plenty of alternative employment opportunities for displaced agricultural & industrial workers.
Now they did mostly involve going to other countries and shooting people (and occasionally being shot by them) and being flogged and catching horrible diseases. But you can't have everything, can you?
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Vehicle manufacture is already highly automated. We've had window-cleaning robots and similar ways to avoid paying expensive humans to do rote work for a long time. Roombas can seek their charging stations without human guidance and so, I'm sure can Teslas.
The ancient and honorable trade of diagnosis and repair mostly went away years ago. These days, it's cheaper to swap out major assemblies and scrap the old ones than it is to track down a broken capacitor. Even back circa 1985 I had bought a pocket calculator whose replacement batteries cost more than the calculator itself. We're now at the point where units can self-diagnose. Before long it will be routine that they can roll up (or be transported by robot "ambulances") to repair stations where Arduino-driven mechanisms remove and replace faulty subsystem modules. When we don't just scrap the whole thing.
And now we're adding even more ways to automate and reduce - 3D printing on demand. We have microprocessors that can automate processes for less than a dollar a chip.
Much of the focus of late-20th Century business was on creating products that, once designed, could be built cheaply by automatic equipment in million-lot runs. Much more cheaply than the old millions of workers producing one unit at a time or even one unit after another on an assembly line. In some cases, with a precision and quality that were essentially impossible for manual workers to produce.
I'm not optimistic unless someone comes up with an alternative model of living. Not just business, but living, because in the end, most of us work to live, not the other way around and if we cannot live, then bad things can be expected and many of them will be to the detriment of business.
Yes, it's absurd that we have people expected to work 70-100 hours a week while laying off thousands, but that's because the current regulatory climate means that it's cheaper to keep one person working longer than 2 or 3 working less hours. Each new employee comes with a fixed overhead cost in addition to ongoing salary. That's probably one of the first things that should be addressed, but before that can happen you'll have to convince a lot of powerful people that they have to adjust the way they do things. Which, since unions are so despised, means government is the only obvious alternative way to apply pressure to the less altruistic, and in turn, that means ending the current anti-regulatory mindset. The one that brought us the Great Recession and other wonderful things.
Thank you for putting it so succinctly. Too many think that The Market is a benevolent God.
The Market is more like a rain or sun god. A little rain is refreshing. A lot of rain can break a drought. Too much rain in too short a period and you get destructive floods. Over the total surface of the Earth, the Rain God is doing all of the above all the time. Some places get too little, some, too much and some just right. And where those places are shift over time.
Blind faith isn't enough. Sometimes you have to give the gods a good swift kick.
If you don't have any money, "cheaper" doesn't help.
As someone has already pointed out, the first industrial revolutions occurred during a labor shortage. Now that there is a labor surplus the end result will be more people with no jobs and no money.
You are welcome on my lawn.
OK. They've surrendered.
Now what? You can't send them back to work. The whole point is that there's no work for them to do. Not even ditch digging or pyramid building. These days we have heavy equipment that does that.
So you incarcerate them in camps? They're hungry. They're bored. They're upset. You're either going to have to provide ways to feed, shelter, and amuse them or they're just going to rise up again and again until you either remedy the situation or commit genocide.
But when you are the government and they're getting stuff for free (after all they cannot work for it) that's supposed to be Socialism isn't it?
And no doubt you are a billionaire. Because you aren't lazy, are you?
Thanks for your anonymous comment, Mr. Ellison!
Last time around when automation "eliminated" a lot of jobs, people became game designers, software developers, UX engineers, software testers, data miners, social media managers, sustainability experts, E-commerce consultants, genetic counselors, SEO specialists, drone pilots, and wind turbine maintenance crew. Both they and everybody else benefited.
We don't know yet what these 15M people will do when their current jobs get automated, but one way or another, it's going to translate into 15M new and better jobs.
The example I keep seeing used is self-driving vehicles, particularly trucks.
And the example that keeps getting ignored is farming. If out of work farmers and their descendants couldn't get new work, then we'd be around 80-90% unemployment.
Tech changes that just do existing work with less human labour do not expand wealth. The automated trucks drivers, administrative assistants, warehouse pickers, burger flippers, etc, etc, that are coming down the pipe do not increase demand - if anything, they decrease it, by reducing the amount of wages entering the economy.
Nonsense. The ex-truck drivers just do something else. Now, you have the wealth generated by the automated truck drivers and by the labor of the ex truck drivers. This is not only an expansion of wealth, it is an expansion of the rate of increase of wealth.
If this bank doesn't help them find some work, there's going to be hell to raise, especially when 15 million people is about a quarter of the entire UK's population. If a fourth of the US was layed off, do you think that would end peacefully?
Yes, and this is where I get so annoyed at idealistic neo-liberals. They harp on about how they should be free to do whatever they want while ignoring the massive benefit of social stability that things like paying taxes and having a centralised government gives them. I would love to live in some enlightened society where we can do away with the apparatus of central government and things like taxes, but that is not going to happen if it involves humans.
The real danger we have from the 1% is that they become so disconnected from society that they do a Marie Antoinette, and take all us middle class folk to the chopping block with them.
People have made the same Luddite arguments that you're making for a couple of centuries. Even the notion that you can talk about labor as something that there is a "shortage" or a "surplus" of is idiotic. There are far more things that people want to get done than there are people to do them; always. When people don't have to do tedious and repetitive tasks that get automated, they can do more useful and productive things.
That's the elephant in the room. Economists (especially those who occupy armchairs or political office) have miossed that the industrialization that improved everyone's life in a free(-ish) market did so because there was a severe labor shortage and even then, it only worked out after a great deal of civil unrest including a number of fatal confrontations.
My belief is that there will be such a labor shortage again. The real elephant in this room is the fact that we are still seeing increasing demand for labor along with that increasing automation and increasing wages. This is the same trend that has been going on for centuries. It's just happening on a global scale rather than a developed world scale of the past.
The current industrial revolution is taking place during a labor surplus. Freeing humans from the need to labor is a laudible and achievable goal but the labor market and it's imaginary magical invisible hand isn't up to the task.
It's sad that people are so eager to discount the power of markets even when there's strong evidence the markets are working as advertised.
Or Mad Max. Here in the US, there is an attitude of "if you don't work, you should starve". Couple that with automation and the feeling that businesses should be given absolute free reign (which was a part of US history from the Civil War until the Great Depression), then one notices people are caught in a vise.
You can't halt progress. If robots are banned in the US, China will allow them. If import duties are levied, politicians will be replaced to have them repealed, since Citizens United has made bribery effectively 100% legal.
What is going to happen? Well, nothing good, especially with the push to remove Social Security, welfare, SNAP, and other programs. People will just have to deal with starving, since revolution is impossible.
Why would people "not have any money"?
What evidence is there for a "labor surplus"? By historical standards, the US unemployment rate is fairly low. Furthermore, it would be even lower if government regulations didn't make some people unemployable.
The example I keep seeing used is self-driving vehicles, particularly trucks.
And the example that keeps getting ignored is farming. If out of work farmers and their descendants couldn't get new work, then we'd be around 80-90% unemployment.
I don't know. I don't think the job market for oxen and horses has ever really recovered.
The crux of your argument seems to be that automation has not lead to mass unemployment in the past, so why would it in the future? Why worry about it now?
I'd argue that while it hasn't lead to mass unemployment yet, it's more recently lead to under-employment and a decline in wealth for everyone except for an increasingly small number of people.
Former farmhands took jobs that required little in the way of skills they didn't already have, skills that industry was willing to teach them. But lets be clear, there were lots of worker abuses in the industrial revolution. Over time unionization and government regulation made for better working conditions and pay, but unions are almost to the point of irrelevance in this country.
Now to get a decent job, most people have got to spend a small fortune on a college education. Most skilled workers start their careers in serious debt. And of course as soon as they start working, they need to start saving for retirement because almost nobody has pensions anymore. Then somewhere down the line they will find that their skills are no longer relevant so they get spend a small fortune on college again, - while trying to save for the kids' college education and their retirement. That's even if a 50 year recent college grad can find work.
We are almost getting to the point of being share croppers.
should be enough for any planet
Yes, it's absurd that we have people expected to work 70-100 hours a week while laying off thousands, but that's because the current regulatory climate means that it's cheaper to keep one person working longer than 2 or 3 working less hours. Each new employee comes with a fixed overhead cost in addition to ongoing salary. That's probably one of the first things that should be addressed, but before that can happen you'll have to convince a lot of powerful people that they have to adjust the way they do things.
Because a lot of powerful people like paying lots of overhead per employee? Sure.
Which, since unions are so despised, means government is the only obvious alternative way to apply pressure to the less altruistic, and in turn, that means ending the current anti-regulatory mindset. The one that brought us the Great Recession and other wonderful things.
You claimed that regulation is the primary cause of the problem of overwork not the usual lack of altruism among employers. So why again are you advocating even more regulation and even more introduction of problems? This creates a perpetual cycle of failure where new poorly thought out regulation is created to patch over the failures in the previous generation of poorly thought out regulation.
It's also worth noting here that a lot of people do want to work long hours to the degree that when they can't find full time work, they work multiple part time jobs.
They aren't crippled or permanently unemployed, you stupid motherfucker.
Most people are not capable of generating their own jobs.
To have a right to do a thing is not at all the same as to be right in doing it
Your entire analysis is nonsense. You can't predict the effect of a decrease in the cost of making a product without knowing the demands for labor in other manufacturing plants, the difficulty of retraining, the elasticity of demand for needles, etc. Often, automation and mass production have increased the amount of employment related to making a particular product.
That conclusion simply follows from your assumption that all workers are strictly identical and some are going to be unemployed. It has nothing to do with the economics of the situation. If the workers are not strictly identical, then businesses won't select them at random, but instead offer them salaries based on labor supply and demand.
Furthermore, whether unemployed or simply receiving a lower salary, that kind of price signal is the whole point of having a free market; it is what causes people to change jobs to industries where they are more needed than in needlemaking.
I don't know. I don't think the job market for oxen and horses has ever really recovered.
They're still employed though. And you ignore that humans are a bit more flexible than oxen and horses.
The crux of your argument seems to be that automation has not lead to mass unemployment in the past, so why would it in the future? Why worry about it now?
I'd argue that while it hasn't lead to mass unemployment yet, it's more recently lead to under-employment and a decline in wealth for everyone except for an increasingly small number of people.
You could argue that, but that's not happening. Sure, there are a small wealthy portion of the world which does well no matter what. But most of the world's population has been getting wealthier and this trend has continued to the present.
Life's too short to trust in falsehoods.
Now to get a decent job, most people have got to spend a small fortune on a college education. Most skilled workers start their careers in serious debt. And of course as soon as they start working, they need to start saving for retirement because almost nobody has pensions anymore. Then somewhere down the line they will find that their skills are no longer relevant so they get spend a small fortune on college again, - while trying to save for the kids' college education and their retirement. That's even if a 50 year recent college grad can find work.
It's not my fault some college students made very poor life choices.
We don't know yet what these 15M people will do when their current jobs get automated, but one way or another, it's going to translate into 15M new and better jobs.
Yes, there will be almost exactly the same number of jobs created as are lost, almost all of them in as yet unknown areas. Let me guess, it's the Invisible Hand sorting everything out?
To have a right to do a thing is not at all the same as to be right in doing it
Average corporate profits are around 7% a year, same as stock market returns and other risky investments. That's roughly where they should be; it's a fair compensation for the risks investors take and the value they contribute. And through the stock market, everybody can get that return.
Profits don't go up long term when companies become more efficient; competition instead drives prices down. Companies become more efficient not to increase profits, which they can't, but because they would go out of business if they didn't stay competitive.
When automation reduces the need for labor in the production of some good, profit margins may briefly go up, but then go down again as competitors automate as well. At that point, prices go down and demand goes up, depending on elasticity. Generally, fewer workers are needed, but they usually require different and higher skills so they get paid more; they don't earn more money, they simply transfer over from other similar paying jobs in other industries.
The existing workers move into other industries appropriate to their skills, usually at about the same salary. But since some good has become cheaper now, their salaries are effectively worth a bit more, so the benefits of automation effectively show up as a slight wage increase for everybody.
So no, throwing up our hands and claiming "the market will take care of it" doesn't suffice when the "product" is human beings. The market (and the economy it lives in) is a construct of man that should serve our needs, not the other way around. If the economy does not serve our needs, it must be changed.
Except markets are more than adequate at employing people as long as you don't grossly obstruct them. Let us recall here that all these complaints about how the markets aren't working come from parts of the world where regulators force huge costs and liabilities on employers. The market is not so all-powerful that it can thwart your attempts to break it.
Some think we've already passed that point, based on the fact that real earnings power in the USA has been declining since the 1980s.
That's because some people ignore labor competition from the developing world. Supply of labor increased, price of labor dropped. It's basic economics.
> They aren't crippled
implying work will be worth anything anymore lolololol
I'm tired of laughing at you now, so I'm going to hire a prole for five cents an hour to laugh for me, because I'm currently using my usual one as an ottoman.
Or maybe I'll use a robot. Costs four.
I don't know. I don't think the job market for oxen and horses has ever really recovered.
They're still employed though. And you ignore that humans are a bit more flexible than oxen and horses.
I think you will find that there are just fewer horses and oxen.
The crux of your argument seems to be that automation has not lead to mass unemployment in the past, so why would it in the future? Why worry about it now? I'd argue that while it hasn't lead to mass unemployment yet, it's more recently lead to under-employment and a decline in wealth for everyone except for an increasingly small number of people.
You could argue that, but that's not happening. Sure, there are a small wealthy portion of the world which does well no matter what. But most of the world's population has been getting wealthier and this trend has continued to the present. Life's too short to trust in falsehoods.
I was talking about the US in particular, but yes if you want to go there, wealth has been increasing world-wide. The reason it has is because there is a never ending search for ways to produce goods for less money. So far that has been achieved through both automation and finding sources of cheaper labor. That has elevated the level of wealth for people in those regions with cheap labor. But what is starting to happen is that even dirt cheap labor is becoming more expensive than automation. China's growth economic growth is slowing down for that reason.
Now to get a decent job, most people have got to spend a small fortune on a college education. Most skilled workers start their careers in serious debt. And of course as soon as they start working, they need to start saving for retirement because almost nobody has pensions anymore. Then somewhere down the line they will find that their skills are no longer relevant so they get spend a small fortune on college again, - while trying to save for the kids' college education and their retirement. That's even if a 50 year recent college grad can find work.
It's not my fault some college students made very poor life choices.
The choice to go to college? Not knowing which jobs will be automated 25 years from now? I'm not saying it's anyone individual's fault. I'm saying that we are fast approaching a time where AI and robotics will replace humans at a faster rate than humans can retrained to do the work that's not already being done by machines. There is just less and less that people can do that machines can't do cheaper.
Correct.
It doesn't matter what you call it, it works, as two centuries of automation, massive changes in job titles, and steadily increasing labor participation rates show.
It can. If the robo-frycook is $9/h and minimum wage is $8/h, everything is fine.
Robo at $8.01/h, everything is fine.
Robo at $7.99/h, everyone is fired. Overnight. And I realize that's just reasonable behavior for a rational business.
Millions of "frycooks" (did you think I was only talking about ONE job?) suddenly applying elsewhere, except there is no elsewhere left.
...it's like they don't even realize a problem exists.
You might want to think about why that happens when there is so much evidence of the problem online and in the news.
School teachers are already being laid off as computers can teach certain subject quite nicely.
I'd have thought that it was these more people-oriented jobs that would be the last to be automated, assuming we don't suddenly invent strong AI.
To have a right to do a thing is not at all the same as to be right in doing it
I was talking about the US in particular,
Exactly my point. Your outlook was provincial.
but yes if you want to go there, wealth has been increasing world-wide. The reason it has is because there is a never ending search for ways to produce goods for less money. So far that has been achieved through both automation and finding sources of cheaper labor. That has elevated the level of wealth for people in those regions with cheap labor. But what is starting to happen is that even dirt cheap labor is becoming more expensive than automation. China's growth economic growth is slowing down for that reason.
That's been going on for centuries. You aren't describing anything new.
The choice to go to college? Not knowing which jobs will be automated 25 years from now?
No, making stupid choices.
I'm not saying it's anyone individual's fault. I'm saying that we are fast approaching a time where AI and robotics will replace humans at a faster rate than humans can retrained to do the work that's not already being done by machines. There is just less and less that people can do that machines can't do cheaper.
And I'm saying you have absolutely no supporting evidence for your opinion. The developing world doesn't have this problem you claim is a problem. It's only developed world countries which are trying really hard to keep people from being employed which supposedly have this problem.
Well, guess what. When you discourage a thing with higher cost and regulation, you get less of that thing. It's not magic.
>It's also worth noting here that a lot of people do want to work long hours to the degree that when they can't find full time work, they work multiple part time jobs.
I think you mean that a lot of people want more money than they can earn in their first job, so they find multiple part time jobs to make the money they think they want or need.
If you offer some people $60K/yr + benefits for working 40 hours a week, some of them will opt to instead work for $30/hr with no benefits at 2 jobs where they can work 60 hours a week in total. Lack of benefits means more immediate cash in pocket, and they'll think that they are making "more money overall" with the extra 20 hours a week. When they end up with $5K in extra expenses travelling to both jobs, $10K in medical bills and $20K in lost income while they can't work due to health problems, and then having their home foreclosed because they can't pay the mortgage they got based on all this extra income that unexpectedly disappeared, it's not really a good deal after all.
Only an idiot would turn down $100K/yr + benefits @ 40 hours a week vs $30/hr part time - through tax incentives (positive and negative) the government could make it more attractive for employers to offer jobs with benefits and good salaries (corporate tax credit for each employee earning more than a threshold amount, etc. etc.) but the way it is structured now, that's not happening.
Sure, just like all the oil companies we have means they don't collude and price gouge. Most products are priced at what the market will pay, not what the product can be delivered to market for in the most efficient scenario.
Even Wal-Mart gouges, they drop their cost of goods as far as they possibly can, but they also raise prices as high as they dare in each individual store - thank you very much computerized inventory and price tracking.
Because they won't have jobs.
Right now, we're dealing with the labor surplus through mass incarceration, disability, and people just leaving the labor market. Not that "full employment" is a worthy goal, but with real incomes declining, a smaller percentage of people in the workforce means more poverty.
You are welcome on my lawn.
Oh, come on, you're talking about the broader market. This is /. where we like to point at extreme cases as examples of why the world is unjust, unfair, corrupt, and generally not as much fun as we had hoped it would be when we watched the captain say: "Engage!"
All in all, I do see more people apparently "stuck" in bottom-end economic situations, with less opportunity to "climb the ladder" than 30-50 years ago. Bottom-end housing today includes air-conditioning and twice the square footage of back then, bottom-end cars today out-perform (safety, handling, emissions and sometimes acceleration) the best of the best from 1965, bottom-end food choice seems more plentiful - if sometimes of questionable health value, and bottom-end healthcare (if you can get it) is quite a bit better, too. Even bottom-end neighborhoods seem to be safer to walk the streets, even at night. Then, we've got our bottom-end cellphone service and internet access that is better than what the top 0.01% had 50 years ago.
Happiness is relative. Relatively speaking, I'd like to spend less time working my job and more time with family, personal projects, travel, etc. That doesn't seem to have improved much in the last 50 years - would be nice if we at least had a viable option to do that without having to go full retirement from the workforce.
When they end up with $5K in extra expenses travelling to both jobs, $10K in medical bills and $20K in lost income while they can't work due to health problems, and then having their home foreclosed because they can't pay the mortgage they got based on all this extra income that unexpectedly disappeared, it's not really a good deal after all.
Then they buy health insurance and resolve that problem. They end up with more money and the health care they want. It is amazing how people fail to understand the financial side of this or the perverse incentives that have been created over the years.
Only an idiot would turn down $100K/yr + benefits @ 40 hours a week vs $30/hr part time - through tax incentives (positive and negative) the government could make it more attractive for employers to offer jobs with benefits and good salaries (corporate tax credit for each employee earning more than a threshold amount, etc. etc.) but the way it is structured now, that's not happening.
So what? I'm not going to pay you more either.
Because they just got laid off? What people are trying to get across is that if you layoff 50% of your workforce, and reduce your price by 50%, you are creating a net loss, because the remaining 50% pay 50% less, and the other 50% you laid off pay NOTHING, because they now have 0 income, so the cost reduction does not benefit them what so ever. So yeah, you get some extra profit from reducing your cost by half, and yoru price by something less then half, but then you lose a ton in the volume side, when people stop buying your stuff entirely, being unable to afford it. This is most reflected in the F2P games, where it is EXPECTED that 60% or so of the playerbase will pay nothing, the 10% at the top will provide 50% of the revenue.
Fundamentally, with technology, we keep raising the bar on what is required to even participate in the market. There was a time a child could work and get a wage of some kind, and required almost no training. Now, many jobs require a ton of training and learning on the go just to become productive. All the main professions (Engineering, Law, Medicine, Accounting) take anywhere from 5-10 years to get fully up to speed to be productive. Trade based stuff takes almost as long, just getting the experience. Programming is nearly as bad, just masked by the fact that you can start it relatively early, but doing actual good software design is like a trade, it takes experience and some people have a talent for it.
No, sorry, prices, labor, and production don't behave at all like you imagine them to behave.
Oh, you're absolutely right. But that's not the fault of automation, that's the fault of progressive workplace regulations, minimum wage, etc. If the cheapest you can hire a worker for is $25000/year, then people won't hire any workers with skills that make them worth less than that.
That would mean that we would have a historically low labor participation rate, but we don't. Labor force participation rate was climbing for 55 years after WWII, in parallel with massive automation. Since 2008, the labor force participation rate (in the US) has been falling somewhat, but that's due to Baby Boomers retiring.
Why wouldn't they have any jobs? Median unemployment is about 10 weeks, and has been since the 1970's.
I'm curious. If you believe that unemployment is historically low, does that mean you're a big supporter of the Obama Administration's handling of the economy?
You are welcome on my lawn.
So no, throwing up our hands and claiming "the market will take care of it" doesn't suffice when the "product" is human beings. The market (and the economy it lives in) is a construct of man that should serve our needs, not the other way around. If the economy does not serve our needs, it must be changed.
Except markets are more than adequate at employing people as long as you don't grossly obstruct them. Let us recall here that all these complaints about how the markets aren't working come from parts of the world where regulators force huge costs and liabilities on employers. The market is not so all-powerful that it can thwart your attempts to break it.
Some of use want to breathe clean air and drink clean water and eat safe food and not drink and bathe in a river that is basically a chemical dump. Companies, even regulated, will try to cheat (VW emissions, anyone?). Imagine what a race to the bottom an unregulated market would be ...
"Transparent" is a shit show that trades on every stereotype going. A man in drag is NOT a transsexual.
I don't believe that. And I didn't say that. I said that the US unemployment rate is "fairly low", not "historically low".
You made the statement that there is a "labor surplus"; explain what you mean by that and provide evidence!
Not at all. Obama engaged in massive crony capitalism and promised economic outcomes that haven't come true; the man is either a fraud or incompetent. And the economy is far worse than it could be. However, what it doesn't have is a labor surplus.
Much more will be automated, so it will be cheaper.
Call me a cynic, but the end result will probably be things will be cheaper to produce, but the prices will continue to increase. It's all about maximum profitability, right?
And yet, you completely believe in his Department of Labor's employment numbers.
You are welcome on my lawn.
"The world has reached peak jobs."
Really?
There's nothing else to be done anywhere?
You look around you and you can say "There's nothing else that could be done that isn't getting done"?
Really?
Some of use want to breathe clean air and drink clean water and eat safe food and not drink and bathe in a river that is basically a chemical dump. Companies, even regulated, will try to cheat (VW emissions, anyone?). Imagine what a race to the bottom an unregulated market would be ...
Want != get. There are multiple conflicting wants here and most have one or more non-market regulatory kluges to realize that want in some way. The consequences are that everyone tries to route economic activity away from the zone of conflict.
This isn't a case of an unregulated market running untrammeled over the environment and workers of the US. It's a heavily regulated (in many ways) market which has a bunch of haphazard junk jammed into the gears.
I think we could have a better market for jobs that still maintains current levels of environmental, safety, and labor policy quality just by rethinking regulations so as to reduce the cost of them. It probably would still be a slowly sinking ship just due to the self-defeating and conflicting nature of the overall policies and programs that are funded, but IMHO things are so bad, that we're not even looking for low lying fruit to pick.
Labor will be automated and people driven out of work until the price of labor (wages, salaries and benefits) is less than the price of additional automation.
Automation only causes unemployment in the short run.
Once people get used to working for less and adopt a lower standard of living, employment will go back up.
The minimum compensation necessary to maintain existence is an absolute floor. This minimum represents a life so miserable most first world citizens would find it unacceptable. Between that floor and current wage levels is a lot of room
If your children ever found out how lame you are, they'd murder you in your sleep
Some people who are professional economists think that much of the downward pressure on labor prices has to do with the fact that over the last 30 years we've made significant gains in productivity. Cheap labor contributes as well, but eventually labor markets would reach parity. Indian programming costs have been on a steady rise since the early 2000's, for example.
Technological influences, on the other hand, mean that fewer workers of any price are required forevermore. We've seen this already in cases where manufacturing once thought lost to the USA has returned, but automated. Because a machine, unlike a worker, tends to cost about the same no matter where in the world it is, and when people are no longer required as part of the process, the extra expenses of dealing with languages, cultures, time zones and cost/time of material goods shipping tilt the balance back to home manufacture.
If so, why do we have unemployment? Why do we have people who have been unemployed long enough that they've given up on getting a job? It seems that reality disagrees with your convenient theory.
A lot of the low-lying fruit has been picked. Closing coal plants. Increasing fuel economy. Making cars that last longer, so we don't use up as many resources replacing them as often. Insulation. Heat pumps. Zone lighting (both home and commercial/industrial). Swapping out incandescent light bulbs. Microwaves. More efficient refrigerators and air conditioners.
Taking it to the next level is going to be a lot harder.
"Transparent" is a shit show that trades on every stereotype going. A man in drag is NOT a transsexual.
My belief is that there will be such a labor shortage again. The real elephant in this room is the fact that we are still seeing increasing demand for labor along with that increasing automation and increasing wages. This is the same trend that has been going on for centuries. It's just happening on a global scale rather than a developed world scale of the past.
That must be why unemployment is a negative number and workforce participation is at an all time high while wages are rising faster than inflation across the board.
OH, wait!, none of those things are happening.
If you really believe in markets, then you believe that demand for labor is down since any reasonable market theory would predict that given the figures.
If you believe demand for labor is up and yet we have unemployment and a depressed workforce participation and stagnant wages, then you clearly don't actually believe market theory.
So your position is that we must surely die out as a race, either by abject poverty or poisoning ourselves to death?
I'm glad you challenged my statement.
I should have said, "The world has reached peak private sector jobs."
Of course, there is plenty to be done, and jobs can be had doing those things. But not from the private sector. We're going to have to accept large-scale pubic works projects, infrastructure building and fixing, and other public-sector jobs if we want to keep people working. And that means tax money.
You are welcome on my lawn.
Think about how many businesses out there directly or indirectly are affected by the costs of transporting freight via trucks. If your business ships things to customers, you bear the cost of trucking. If your business receives supplies from vendors, you bear the cost. Reducing the cost of transportation benefits pretty much everyone to the point where I have no doubt that at least as many jobs would be created as lost. Reducing efficiency for the sake of jobs is really no different than the broken glass fallacy.
There has always been a new wave of jobs as the cost of what we're used to buying fell, and we found something new to buy. There will be this time too.
You state that as if it's a natural law, when it's anything but.
First wave automation was happening in an economy where most people were less well off than ancient Romans. Centuries of Dark Ages exacted a massive toll, and it wasn't hard to find things to sell to people who were starting from literally dirt floors and no running water. There are people still living today who remember not having running water in the structure they lived in, and using a hole in the ground to defecate. A population with that as the starting point can absorb enormous amounts of productivity, and did, for two centuries.
There are places where those conditions still prevail, but they're not relevant to this discussion. This discussion is about what to do in the economies of the world that have more than 3 billion people in them who already have all of the necessities of life and are to the point of replacing luxuries for the hell of it. What more can you make for them? 3 billion people already have more clothes than they can wear and more food than they can eat. 3 billion people either own personal transportation or have access to public transportation that can get them across their respective countries for a few hours' wages. 3 billion people have climate controlled dwellings with electricity and running water and sanitation. 3 billion people have TVs and smartphones and multiple other computers and heaps of children's toys and the ability to indulge any hobby they like. What are you going to sell them?
The necessities are done. The luxuries are done. What new thing is going to absorb the labor of hundreds of millions? It won't be a necessity. That's what the automation is doing. What luxury are you going to invent next? VR? Consumer electronics that will be in the hands of those 3 billion inside of 5 years, if they actually want it? (The smartphone being the bellwether for all future luxury consumer electronics.) So what is it going to be? Flying cars? Linux on the desktop?
The real oddity is that I seem to recall the poster, in a recent thread, saying that corporations didn't pay enough taxes. Now he wants to give them tax breaks.
"So long and thanks for all the fish."
It used to be that one worker could make one widget each hour. Now, there's a machine such that one worker can make two widgets each hour. If we keep the same number of workers, we have more widgets, and assuming they're worth anything we've got more wealth. If instead we lay off half our workers, in a healthy economy they can find other jobs and produce stuff there, and we've got more wealth. The only situation where we don't get more wealth is if we lay off half our workers and they can't get jobs elsewhere.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
I'm pretty sure that they just advocated strip mining, clear-cutting, and whaling with dynamite.
*sighs* I'm a 40 year, or so, member of the Libertarian Party. Not even *I* think like this. Regulating businesses is something the government should do, responsibly and reasonably. The rights belong to the individual and we, the individuals, allow those businesses to exist. The commons are essential to preserve, as much as possible, to ensure we've the ability to make use of our freedoms and better preserve our rights.
"So long and thanks for all the fish."
Stupid choices will always be a problem. Another problem that will always be with us is choices that are intelligent based on information known at the time, but which turn out bad. If we want to encourage intelligent choices, we have to have them turning out better than stupid choices for most people.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
What jobs are we going to find for truck drivers?
While we might get self driving trucks, I doubt if that will mean getting rid of "truck drivers" any time soon. I suspect it will be a long time before self driving vehicles will be allowed to go off on their own without a person to be responsible. Many trucks need a person to move stuff from truck to destination with the equipment on the truck. Somebody will need to make sure the manifest gets filled out, the truck doesn't get robbed, unload the truck, etc.
Would you care to point out some of those obstructions? A *lot* of laws and regulations exist to facilitate the market, by reducing information asymmetry and incorporating externalities into market decisions. Were it not for those, our air would be worse than China's, our water pretty much undrinkable, and we'd have no idea how much of that steak is cow and how much is roach.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
There you go, picking on the kids again. At least it's Friday. There's even a whole thread full of people saying, "SJW." You should be comfortably blitzed by now.
"So long and thanks for all the fish."
In the US, the big evidence is that typical worker wages are going up slower than inflation. When there's a shortage of something, prices go up. When there's a surplus, prices go down. There's a limiting factor here in that actually reducing the dollar amount of people's pay has complications, but keeping the dollar amount steady as the value of dollars goes down works.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
What new thing is going to absorb the labor of hundreds of millions? It won't be a necessity. That's what the automation is doing. What luxury are you going to invent next?
Humans are quite inventive. And greedy. We'll think of something. Personally, I expect it will be the sort of services that need a personal touch: decorating, customized home theater installation (customized anything installation), personal shoppers, all the personal services only the rich pay for today.
Think about this: if we have acceptable home manufacture in most homes (good enough to get by with), then what possessions are fashionable? What are the "fashion status symbols"? There will be a huge new market there.
Socialism: a lie told by totalitarians and believed by fools.
That must be why unemployment is a negative number and workforce participation is at an all time high while wages are rising faster than inflation across the board.
Workforce participation is increasing and I imagine it is at or near an all time high, though mostly due to increased participation by women. Wages are rising faster than inflation for at least two thirds of humanity, just not for the developed world.
OH, wait!, none of those things are happening.
I have to roll my eyes at such pronouncements. Have you never bothered to look? Have you never wondered how the rest of the world can slowly acquire the trappings of the developed world without accumulating wealth in the process?
If you really believe in markets, then you believe that demand for labor is down since any reasonable market theory would predict that given the figures.
Let's see these "figures" at the scale of the entire world.
If you believe demand for labor is up and yet we have unemployment and a depressed workforce participation and stagnant wages, then you clearly don't actually believe market theory.
Who is "we"? The developed world is not the world. You are looking at the wrong scale. The traditional model of supply and demand adequately explains the problem that the developed world has right now. Because of improving and liberalizing global trade, we now have a pool of labor effective much larger than we had in say, 1970, even including population growth. Any market theory would have told you that the price of labor would decline which in our complex world with all sorts of non-market tricks for shoring up wages, translates into declining labor power for any sector which is exposed to competition with the developing world.
Developed world capital has indeed increased with respect to developed world wages. Public sector labor unions have more power than private sector labor unions. The developed world has all sorts of problems with transfer of work to the developing world, automation, and mere closure of business, which the developing world doesn't have.
Were it not for those, our air would be worse than China's, our water pretty much undrinkable, and we'd have no idea how much of that steak is cow and how much is roach.
Obviously, we only have the choices of complete anarchy or the current ridiculous morass of regulation (with new regulation applied faster than a human can read it). There can't possibly be any other choice here.
but eventually labor markets would reach parity
I should just be stating the obvious here, but parity between US and India hasn't been reached yet. Thus, any predictions which depend on parity being reached aren't yet valid. Cheap labor is not only going to contribute for decades to come, it will remain the most important dynamic over that time period.
Technological influences, on the other hand, mean that fewer workers of any price are required forevermore. We've seen this already in cases where manufacturing once thought lost to the USA has returned, but automated.
No, we haven't. I tend to agree that there is considerable mostly automated manufacture in the US, but I don't agree with the interpretation (which completely ignores what is going on in the rest of the world) that automation is destroying jobs permanently. Instead, if we look at the global scale, we continue to see job creation in concurrence with automation and continued movement of jobs between countries and whatnot.
We still see the centuries long progression of increasing value and wages of labor combined with increasing automation.
No, my position that the elites, that would be me, need to feed the ignorant masses, that would be you, to the hungry maws of our machine gods. /sarc
Sorry, but the topic here is clearly the developed world at the moment. The first time I saw you re-defining terms and moving the goalposts when you were painted in a corner, it was mildly (very mildly) amusing, but now it is merely a waste of everyone's time, so shoo! Come back when you are ready to meaningfully contribute to the conversation.
Sorry, but the topic here is clearly the developed world at the moment. The first time I saw you re-defining terms and moving the goalposts when you were painted in a corner, it was mildly (very mildly) amusing, but now it is merely a waste of everyone's time, so shoo! Come back when you are ready to meaningfully contribute to the conversation.
When you speak in universal terms, there's only one set of goalposts that matter. And while it is nice that you suddenly care about rhetoric and rational debate. I only hope that concern lasts past your next post.
There are many reasons for why people are unemployed There are some reasons that are "natural", that is, you expect them to occur in any functioning economy, and they are mostly related to people switching jobs. The natural rate of unemployment for the US is about 5%, pretty close to the actual rate of unemployment that we actually have.
That's measured by the labor force participation rate. There are many reasons. A lot of Baby Boomers are retiring. A lot of couples decide that one partner earns enough money that the other can stay at home, raise kids or pursue hobbies. More people stay at university and in grad school longer. At the low end of the income scale, single mothers may prefer to spend a while outside the labor force to raise their kids. Many people may also simply receive unemployment benefits while working on the side.
Progressives keep talking about a bunch of things as being desirable: more education, less materialism, ability to spend time with kids, support for single parents, more focus on what really matters in life, time to pursue interests and entrepreneurship, etc. All of those necessarily decrease labor force participation rates and cause family incomes to stagnate. So, if you agree with the progressive vision of society, you shouldn't complain about the logically unavoidable outcomes.
Perhaps on your side of the community gate people can voluntarily quit their jobs to be with the kids, but most cannot really afford that.
The progressive vision would have incomes rising so that families could afford to go back to single income or 2 part time incomes.
What reason do I have to doubt them? It's not like those numbers are particularly flattering to the administration. And faking them or manipulating them would be pretty hard. Besides, we're mostly concerned with comparison (relative to the natural unemployment rate and over time), and in those comparisons, any biases cancel out anyway.
When families go back to single income or 2 part time incomes, their family income obviously drops, and that drags down the middle class family income statistics. You seem to live under the delusion that family incomes should continue to rise even though people work part time or one partner drops out of the workforce, and that, of course, is ridiculous.
You're right: I live in a gated community, which, coincidentally, is the cheapest form of housing around here. Of course, for "let them eat cake" snobs like you, such economic realities are difficult to understand.
You can give tax breaks in one area, and increase them in another, and remain revenue neutral.
Taxes aren't all about collecting money, they're mostly about modifying behavior - behavior is more tangible, and important, than money.
Should taxes be about modifying behavior?
"So long and thanks for all the fish."
Replying to AC because this is a good point to explain. The reason you can do this is two fold (a) automation will be producing a more elastic supply. If robots are cheap enough then expanding supply does not put pressure on labour (no need to hire more workers). This means there is no pressure on the labour market to increase wages, so you don't get an inflation cycle from the extra demand. You are essentially just triggering consumption of latent supply capacity, which in a competitive market cannot easily produce price increases. (b) if robots really do displace large numbers of workers (i.e. we don't find other stuff for them to do) then we will need something like this to prevent a situation where you have under-utilised robot factories and displaced workers out on the street, simply because they cannot compete with the robots to get bank notes that they can use to create demand from the idle robot factories.
However, you are correct that we are still fundamentally resource limited in terms of energy and raw materials. This is where I think there needs to be more thought on how the Basic Income works. I suspect you could make something work on the basis that while all humans want to be 'rich', most lack the drive to do anything about it once they get to a middle class level. Further, it is possible to expand resource availability through technology. If we continue to develop more abundant energy sources without destroying the biosphere, we could easily produce more food, building materials, fresh water using the pretty incredible technology arsenal we have available now.
The Basic Income has issues, but it is a starting point for a discussion we need to have. Technology is changing the economy rapidly, and in my experience with projects, if you don't bother thinking about where you are going, you will eventually end up in a bad place.
Is government about anything else?
So, then, the question becomes: should we have government? Well, I actually like having roads, sufficient police protection that I can sleep in a house with breakable glass windows with no iron bars, a financial structure that allows me to purchase food and shelter without having to grow / construct it myself. Yeah, overall, I think we're better off with government that meddles in the affairs of society and shapes behavior.
Not that it's right, but the current reality of buying health insurance "on your own" is really crappy, we've been there, done that. Rates are astronomical, significantly higher than what the employee+employer pay in a large company situation, and that's when you have good health and no claims. Then we had a baby, and the birth went sideways and we ended up with $25K in ICU bills. The insurance (Blue Cross Florida) paid, and then raised mom's rates over $1000 per month - seems that they wanted to recoup their payout from in 2 years or less, not sure what they did with the near $100K in premiums we had paid into the system during the decades before that with essentially no claims. Other companies simply refused to insure. At that point, we went self-insured and just banked the $1000 per month instead. And the reality of being self-pay is that you pay a large multiple of the "negotiated rates" - if you push for self-pay discount, everyone is very understanding, they knock 10% off just for asking, when you point out that this same service last year was 80% less when paid by insurance they just shrug and tell you when the bills will be sent to collection.
There's more to the compensation picture than hourly rate - you can manage and buy your own benefits, but not for anything near the value that larger groups can.
No, that's an attempt to reduce it to the absurd but you know that. How about protecting the borders, preventing monopolistic business abuses, and allowing the citizens a modicum or rights? No, I don't think we need to be trying to use tax money to control behaviors - not even with businesses. We've got courts and fines for that. Taxes are a whole different thing - they're something you're obligated to, regardless of your behavior.
We're not going to agree. I, for one, don't really want the government telling you how you should behave so long as you're not harming anyone and I sure as hell don't want them taxing you to control your behavior. That's not what taxes are for but, frankly, you knew that too.
"So long and thanks for all the fish."
Agreed that we won't agree, but disagree that courts and fines aren't part of government. I've always viewed fines as a "behavior tax," so I suppose that's a fundamental difference - sure, you always have to pay a tax, unless you choose not to engage in the taxed activity - there's considerably grey area between fines and taxes.
Rolling back up several posts, how is paying less than a living wage not monopolistic, or at least collusive behavior? True free markets will degenerate to monopoly situations, including labor markets.
So, don't call it a tax break, call it a fine, and for every employee who gives you X hours a week, if you're not paying them enough to keep them off of government support, let's fine the employer for the difference, to cover the cost of government support required to keep that person working for them. Call 40 hours a full week, if you employ someone for 20 hours a week, pay them $6/hr, and expect the government to kick in another $360/week so this person can have food, shelter, healthcare, and transportation to work, let's say $75 of that becomes the responsibility of the company which is consuming this person's working hours.
Subsistence existence: $480/week (before taxes, in some cities), employer pays $120 for 1/2 of the employee's working hours, that's a $120 shortfall - fine 'em so the money can go toward the public assistance programs that are necessary to keep these people employable.
Or, tax them and give them a refund for good citizen behavior - it's all the same in the end.
Taxes aren't all about collecting money, they're mostly about modifying behavior
Always a good anti-tax argument. I suggest a $50 per instance tax on people who suggest any taxes for the purpose of behavior modification.
The only situation where we don't get more wealth is if we lay off half our workers and they can't get jobs elsewhere.
Which is exactly what we're worried about.
If you can amp up your production of rolls of toilet paper from 1 roll per hour to 2 rolls per hour per worker, then you have now twice as many rolls of toilet paper in the warehouse at the end of the day. That means that you have to get twice as many rolls of toilet paper OUT of the warehouse each day.
OK, supply-side efficiencies means that you can now afford to lower the prices on toilet paper so that more people will want to buy them. Except that in this case, you're talking something people pretty much have to buy all the time, but only in fixed amounts. Absent a plague of diarrhea, those new lower prices are going to make precious little difference.
Well, what about something that's less of a pure commodity, like TV sets? A household can now put a TV in every room. But again, houses have only a finite number of rooms, so eventually, again, the market saturates. Obsolescence can ensure a turnover in TV sets, but unlike toilet paper, it's more of a case where you make the choice to trash-and-replace only if you have disposable income to be able to afford not continuing to use last year's model.
Now consider what we've been doing. One person can make a TV not merely twice as fast, but, perhaps 20 times as fast, thanks to a century's improvements in productivity (and while I cannot quote actual numbers, we have gotten really, really productive in that period of time).
Instead of taking that productivity and give people 3-hour workdays, a lat Jetsons, we've laid off lots of people and actually amped UP the hours that the survivors must work - lest they be considered "unproductive" and laid off in turn. And the increased profitability in terms of labor costs doesn't trickle down to everyone - it just makes bigger and bigger salaries and bonuses at the top. thereby causing a steady erosion of the Middle Class.
We already know that an economy based on "push" works about as well as pushing on a rope. And really talented entrepreneurs are about as rare as really talented machinists. But we're laying off the talented machinists and expecting them to become entrepreneurs. That's not a very realistic thing to do.
Gee, minimum wage and labor hour policies? Those are screwing up the market? You're saying that we'd all be happy working ridiculous hours for a pittance? Ideally, a full-time job at minimum wage wouldn't leave a family collecting government benefits. The only way removing those regulations would help employment is to allow businesses to screw their employees over more than they do now, and it's not worth it. Social Security is not a low-value benefit, and neither is health insurance.
Given a market without externalities applied, pollution would be as bad as I said. When the government starts reining in externalities, business people start moaning about the high costs and liabilities. (They also look for ways to get rid of the liabilities, such as establishing a mining operation as a separate corporation, sucking out all the money, and letting it go bankrupt with its pollution not cleaned up.)
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
Gee, minimum wage and labor hour policies? Those are screwing up the market?
Of course they are. Young adults, the poorer minorities, ex-criminals, and the less educated get badly screwed by minimum wage. Nobody wants to work hard for a pittance. But they don't want to just not work at all and starve either.
Ideally, a full-time job at minimum wage wouldn't leave a family collecting government benefits.
Ideally, you'd be able to afford a mansion, a huge robot staff, and whatnot on your basic income and not ever have to work a day in your life, but we don't live in that ideal world.
Social Security is not a low-value benefit, and neither is health insurance.
And the Moon is made of green cheese. Social Security, for example, raises the cost of almost every employee by roughly 15%. In return, you get a paltry stipend (which grows ever more paltry with the decades) when you retire which isn't much good for anything, including keeping granny from eating cat food.
And as I recall, most of the complaints about US health care are about how expensive it is for no additional benefit compared to other countries's systems.
Given a market without externalities applied, pollution would be as bad as I said.
You don't need any of the things I've spoken of to this point to curb pollution. And there are sensible regulatory changes that would lower the cost for the employer without negatively affecting pollution controls. For example, in a number of industries, it is practically impossible not to violate some regulation (eg, oil drilling and nuclear power plants). But rather than pass impossible regulations and then ignore minor violations after the fact (in order to keep society functioning), how about creating regulations that make it possible to comply with those regulations in the first place?
When the government starts reining in externalities, business people start moaning about the high costs and liabilities.
Their moaning has teeth. There's been 50 years of decline in US living standards and 50 years of employers moving their operations overseas, but as here, a lot of people refuse to do anything about it. There's all this empty noise about how workers want to work for a bunch of money, want to retire on a plush government pension, or get cheap access to a ton of overpriced health care, but not a lot of thought about how that's going to happen.
My thinking on the matter is that if you aren't willing to sacrifice to preserve your country's future, then I'm not willing to care because that indicates to me that you don't really think it is important. For example, the US is going down. All the wants of labor are increasingly difficult to deliver with really dumb and irrelevant crap like Social Security and Medicare/Medicaid sucking up an increasing share of the budget (it's getting towards 50% these days) without contributing anything to the future of the country.
But there's a lot of people who don't care as long as their Social Security payouts aren't touched and their medical conditions are treated.
Nobody gets badly screwed by minimum wage laws, because if you're making less than that you are already screwed.
I find it odd that you think government benefits should continue until I have a mansion and a robotic staff. The government sets certain lower bounds on standards of living, and any employer who pays employees less than that is benefiting from government-sponsored welfare.
Social Security is not a retirement plan. It's a lower bound and supplement, and is quite useful on that score. We could have an actual national pension plan, but we don't.
The US health care system really sucks. However, for the individual who has to live with it, employer-provided insurance is very valuable. Ideally, we'd move to a European-style system which would remove a considerable burden from employers, but there's large business interests who don't want that. A European-type system would also remove that "overpriced health care" you complain about.
The problem is not a national one. The US is doing great, as a whole. Productivity per worker is up, lots of industrial production, etc. The fact that the median household income in constant dollars has been flat has nothing to do with how well the country is doing, or how offshoring is going. US workers are sacrificing what they're worth in productivity gains.
As far as Social Security goes, there are a lot of people, including me, who included Social Security into our retirement plans. I'd be happy to renounce it, provided all the money sent into the system with my SSAN number on it would be refunded to me, adjusted for inflation and with a modest interest rate. I'm over 60, and I don't have time to rearrange my savings to replace Social Security. Darn few of us have defined-benefit pensions any more, and you never know how long savings will last.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
Nobody gets badly screwed by minimum wage laws, because if you're making less than that you are already screwed.
I already stated how they get screwed. By not having a job. One of the things the minimum wage people don't get is that work experience is crucial to being anything other than a minimum wage drone or unemployed deadbeat.
We are creating a long term disaster of people who never will have a job and people who enter the job world late.
For example, I first started working when I was 15 and had about the equivalent of two years of full time work by the time I graduated from college at 22. Fortunately, it's not common, but I occasionally run into people who are at least 25 years old and working their first job ever. It's hard to adapt to something you've never done before and meet expectations you never understood before.
The US health care system really sucks. However, for the individual who has to live with it, employer-provided insurance is very valuable. Ideally, we'd move to a European-style system which would remove a considerable burden from employers, but there's large business interests who don't want that. A European-type system would also remove that "overpriced health care" you complain about.
And why wouldn't the US screw that up? In the beginning before the epic runup in health care costs, the US was comparable with Europe.
They screwed up health insurance that worked. You have completely unrealistic expectations here. The US just had to fix oh, ten or so major problems with health care in the first place and that didn't happen. Thus, I think any transition to European-style plans will fail on similar grounds.
The problem is not a national one. The US is doing great, as a whole. Productivity per worker is up, lots of industrial production, etc. The fact that the median household income in constant dollars has been flat has nothing to do with how well the country is doing, or how offshoring is going. US workers are sacrificing what they're worth in productivity gains.
You just described a national level problem. And it has everything to do with competition with labor that is several times cheaper.
As far as Social Security goes, there are a lot of people, including me, who included Social Security into our retirement plans. I'd be happy to renounce it, provided all the money sent into the system with my SSAN number on it would be refunded to me, adjusted for inflation and with a modest interest rate. I'm over 60, and I don't have time to rearrange my savings to replace Social Security. Darn few of us have defined-benefit pensions any more, and you never know how long savings will last.
Of course, you're over 60. I don't expect this sort of support for terrible programs from people who can do the math and realize they will lose out. You're the last generation (early stage Baby Boomers) who will get more out of Social Security or Medicare than they put in. We similarly don't know how long the US will be able to continuing giving out other peoples' money, but it'll definitely be scaled back by the time I get to retirement age in twenty years.
Why do you hate America? You think that we're incapable of having a decent national health system, and I'm completely unrealistic in thinking my country can do what every other developed country has done. What is it about the US that makes it completely inept? I think the US is capable of doing anything positive other countries can do, such as slash health care costs and get good public health. Since you consider employer-provided health insurance a bad idea, and you're poo-pooing the idea of a national health care system, and apparently are against regulations that would let sick people get insurance, you're in effect proposing that sick people die.
As far as the economy goes, the US as a whole is doing fine. Almost all of the people of the US aren't. You can call that a national problem if you like, but when the country as a whole is doing better than almost all of its citizens I'd say there are problems.
As far as Social Security goes, ending it has major problems. It's been a pay-as-you-go operation, with Social Security taxes used to pay benefits. People rely on it, including people who have paid into it all of their working lives. There have already been changes; my full retirement age is 66, and my wife's is 67. (Frankly, I don't think I can hold this job for five more years. I'm not as good as I was five years ago.) It's also politically impossible, since people my age and up generally vote in elections.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
Why do you hate America? You think that we're incapable of having a decent national health system, and I'm completely unrealistic in thinking my country can do what every other developed country has done.
Why didn't you fix this problem 40-50 years ago? These problems didn't magically appear overnight, but have been well known since the beginning. Why should I share your optimism when we have a demonstration that the US didn't fix a number of huge problems over a very long period of time.
I think the US is capable of doing anything positive other countries can do, such as slash health care costs and get good public health.
Why should I agree? What evidence is there that the US can solve such problems any more?
As far as Social Security goes, ending it has major problems. It's been a pay-as-you-go operation, with Social Security taxes used to pay benefits. People rely on it, including people who have paid into it all of their working lives. There have already been changes; my full retirement age is 66, and my wife's is 67. (Frankly, I don't think I can hold this job for five more years. I'm not as good as I was five years ago.) It's also politically impossible, since people my age and up generally vote in elections.
So? I didn't say it would collapse tomorrow or the eventual collapse of the program would be pretty. I didn't say people weren't reliant on it now. And why is doing something about Social Security, "politically impossible", but ignoring the same political resistance to medical care restructuring is "why do you hate America?"