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WSJ Columnist: Robots Aren't Destroying Enough Jobs (foxbusiness.com)
An anonymous reader writes:
Will millions be unemployed after a job-destroying robot apocalypse? That's "starkly at odds with the evidence," argues a Wall Street Journal columnist, who says the real problem is robots aren't destroying enough jobs. "Too many sectors, such as health care or personal services, are so resistant to automation that they are holding back the entire country's standard of living." Noting that "churn relative to total employment" is the lowest it's ever been, he writes that "The pessimism would be more plausible if the evidence weren't moving in exactly the opposite direction...
"In April, nonfarm private employment rose for the 86th straight month, the longest such streak on record. Monthly job creation has averaged 185,000 this year, more than double what the U.S. can sustain given its demographics. This has driven unemployment down to 4.4%, a 10-year low and below most estimates of 'full employment.' Growing labor shortages have boosted the typical worker's annual wage gain to more than 3% now from 2% in 2012, according to the Federal Reserve Bank of Atlanta. Instead of worrying about robots destroying jobs, business leaders need to figure out how to use them more, especially in low-productivity sectors... The alternative is a tightening labor market that forces companies to pay ever higher wages that must be passed on as inflation, which usually ends with recession.
"That is a more imminent threat than an army of androids."
"In April, nonfarm private employment rose for the 86th straight month, the longest such streak on record. Monthly job creation has averaged 185,000 this year, more than double what the U.S. can sustain given its demographics. This has driven unemployment down to 4.4%, a 10-year low and below most estimates of 'full employment.' Growing labor shortages have boosted the typical worker's annual wage gain to more than 3% now from 2% in 2012, according to the Federal Reserve Bank of Atlanta. Instead of worrying about robots destroying jobs, business leaders need to figure out how to use them more, especially in low-productivity sectors... The alternative is a tightening labor market that forces companies to pay ever higher wages that must be passed on as inflation, which usually ends with recession.
"That is a more imminent threat than an army of androids."
Wages should be considerably outpacing inflation, and that improves the economy, since the working class actually spends their income. However, we should be automating more, but aren't, because of the cheap labor he's complaining isn't cheap enough. Make the minimum wage $30 an hour, and anything that can be done by a robot will be soon. Paired with appropriate socioeconomic reforms, eventually landing on a UBI, and then things are better for everyone.
This is my signature. There are many like it, but this one is mine.
As always, unlimited amount of magic financial instrument money are just 'productivity'; but any rise in real wages means that we are just days away from Wiemar hyperinflation. I'm totally shocked that the Wall Street Journal might hold this opinion.
No, the parent poster is correct. In nature, you know what happens to an abundance of life that no longer serves a purpose in an ecosystem? They die, or fight back to survive. Nature would prefer they die. The optimal (not same as moral or ethical mind you) balance is an entire industry of AI and automation with 1/20th or even 1/100th the population we now have. And guess where we're headed. That's right, massive civil unrest. Bread and circuses is a stop-gap measure. And from where I can tell, the elite/political class is absolutely clueless. Meaning, we're all about to get fucked!
Life is not for the lazy.
So because there are some people finding a job, which may even be a lesser quality job,
That's captured by the unemployment statistics, believe it or not. And those numbers are dropping, which is good.
The only things that matter are A) how many people are dropping out
People drop out because they retire. A lot of people, especially now with baby boomers retiring. Thus the raw number "how many people are dropping out" is not a useful statistic.
The only statistic s we have that tells us something are the number of people on welfare and the number of people dropping out.
Trump likes to criticize Obama for having a "welfare economy," but the truth is the number of people on welfare have been dropping as well. It's not a good number (although you wish it were) because it's affected by things like outreach efforts, encouraging eligible people to sign up.
"First they came for the slanderers and i said nothing."
Actually, we don't yet know if automation of the type we're engaged in will have long-term benefits. This time it really is different. Think of just one aspect - automated surveillance, collation, and exploitation of almost everything you do outside the home (and a lot that you do inside the home).
Other surveillance societies needed to deploy vast numbers of snitches, watchers, and "political officers" and couldn't achieve anywhere near what is being done today.
"Transparent" is a shit show that trades on every stereotype going. A man in drag is NOT a transsexual.
"health care or personal services, are so resistant to automation"
This is the only thing that stopped the system 100% shutting down when the WannaCry ransomware hit.
I don't buy the theory that people stop saving when interest rates get low. Never in my life have I heard somebody say, "I'm only getting 1% on the money that I've been saving for retirement. I think I'll piss it away on stupid crap that's going to be broken in three years."
Anybody who actually is saving money has a reason to do so, and that reason is never to earn interest. That's just why they have it in the bank instead of under a mattress. People save money either for the purpose of buying something or retiring. In the first case, they'll buy it when they have enough money, and in the second case, they'll spend it when they retire. The primary motivation for saving money doesn't suddenly go away or even change meaningfully merely because interest rates are low. At best, weak interest rates make people more likely to contact a broker and put their money into the stock market, thus saving money by investing it rather than loaning it to a bank. And when interest rates are low, stocks tend to do significantly better, resulting in those folks having more money, rather than less.
That said, sometimes consumers do find themselves able to buy things sooner because of better availability of credit at lower rates, which does result in more spending and less saving (up to a point, anyway).
That makes no sense. If they have more money than they know what to do with, how can they be in debt, which by definition, is caused by spending more than you have? Obviously if they have more money than they actually need, they wouldn't be going into debt, so if that happens while they're still bringing in lots of income, then what you're really describing is not caused by wages outpacing inflation so much as by availability of credit outpacing wages, and consumers not realizing that availing themselves of so much credit is a bad idea.
That said, I think you got the order wrong there. Folks get used to a comfortable lifestyle, and their efforts to maintain that lifestyle after their income decreases causes them to sink rapidly into debt, because they continue to spend like they were making lots of money.
Either way, IMO, we have a serious problem in this country with debt, and it is caused by it being way too easy to get credit, coupled with people being way too eager to take on debt. Blame it on the feds for cutting interest rates too much, or blame it on credit card companies for usurious practices, or blame it on the schools for not teaching home economics, but whoever you blame, the problem is very real, and it is a major contributing cause to poverty. Parents don't teach their kids not to spend more than they earn, and so you get people living well beyond their means by buying stuff on credit and making the minimum payment each month. And then when the jobs disappear, they suddenly can't afford those payments and they lose everything.
Don't get me wrong; credit is a useful tool, within limits. It makes it possible to buy things that you need but cannot afford, such as a house or car. It should, however, be reserved for exceptional situations—mainly for things that either A. will appreciate in value (your house, hopefully), or B. are necessary to earn a living (your car). Credit should never be used to pay for your day-to-day expenses. As soon as you start doing that, you're almost guaranteed to get into real trouble financially; it's mostly a question of when, rather than if. Assumi
Check out my sci-fi/humor trilogy at PatriotsBooks.
While you have some valid points, I'm afraid I don't trust government reports on employment. They is too much observable manipulation going on for me to trust the parts I can't see.
I think we've pushed this "anyone can grow up to be president" thing too far.
found when he paid his workers what was then considered an outlandishly high wage, if workers are being underpaid, then increasing their wages actually increases economic activity. His workers were paid enough to afford to buy the cars they were building.
- let me ask you something, if you hear somebody say something stupid that you have heard at the very least 100 tines before how would you react?
Henry Ford never did what you believe because that is idiotic. Henry For did what he did to keep his turnover low. His employees were better trained than any other factory employees, they were more productive because his factories were so much more advanced than others. This had 0 to do with the crap that you were sold and keep selling here. Go read his goddamn biography.
MY OTHER COMMENTS
It's stupid to talk about raising and lowering taxes, as tho there were only one tax rate not hundreds.
I work freelance. Last year my one-man company brought in just under $70k. (Yeah man, times are tough, software isn't nearly as good a profession as it was fifteen years ago.) By the time that money reached my pocket, I paid a real combined income tax rate of 55%. Closer to 58% if you count the payroll company and tax man - who are both absolutely necessary to avoid falling afoul of the IRS - as effective tax burden.
In contrast, Apple computer had revenues of a few bazillion dollars, and paid no tax whatsoever. Individual human rentiers - the investor class - pay more than Apple. But still far far less than working people.
See why it's stupid to talk about "raising taxes" or "lowering taxes", without saying whose taxes you plan to change?
BTW, all you corporate software guys out there who haven't yet been outsourced, can you see the writing on the wall? In a few more years you'll be reduced to the same destitution to which the once-prosperous class of freelancers has been reduced. NOW is the time to revolt. Strike! Seize the means of production! Take back your dignity and your country. In a few years it will be too late.
No, the economy not being a zero sum game is a key component to functioning markets.
That is only true if we can 'create value' indefinitely; but that isn't actually true, because we don't create value, we extract finite resources, and the thing about finite resources is that they are finite: they will run out, sooner or later, and probably a lot sooner than most think. It is a false argument to say that we won't run out in our lifetime - they said the same in the 60es and 70es about the oceans: it doesn't matter how much waste we put into the oceans, because they are so big; or there are so many fish, we can't possibly deplete the stocks - and so on. Yet we know better already - only 30 or 40 years later. Talking about 'creating value' is a stupid as claiming, that the fortune you inherited from your father allows you to 'create money' every time you make a withdrawal. It will run out, leaving you with no money and a skillset that is only useful if you have access to easy money.
The economy IS a zero-sum game, and it would be prudent to act accordingly.