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."

Comments

Ha

[Zxern]

Ahh yes must keep those wages low so we can pass on the cost savings to you, the shareholder.

Re:Ha

[Sarten-X]

It's pretty much exactly that.

If wages outpace inflation*, it encourages a bubble in consumer confidence, as consumers have literally more money than they know what to do with. That in turn lowers saving rates, as people finally splurge on the luxuries they've wanted, without thinking much about how temporary their windfall is. That increases risk to future economic downturn when the income stops and they're now in debt and used to a comfortable life. In short, think of 1925, but with rampant money instead of uncontrolled debt.

Of course, there are other issues with inflation outpacing wages for too long, as consumer confidence drops and they stop spending on the luxuries they can afford. That leads to a collapsing market for anything beyond survival, cutting employment rates and pushing wages further downward, which pushes prices up, reinforcing the inflation.

Economics: The field where everything is bad for complex reasons, and you're never right about just how bad it will be.

* Note that I'm not claiming any particular wage as good or bad, just that there are risks when they don't match.

Re:Ha

[Mr D from 63]

Too many see the economy as a zero sum game.

Re:Ha

[Mr D from 63]

It is zero sum. There are winners and losers. Resources are always finite and in some cases shrinking (see real estate). Prove otherwise.

Yup, the economy has been the same size forever. Nothing new, nothing gone, ever.

Re:Ha

[reboot246]

Oh, for an economist with one arm!! Then he couldn't say, "On the other hand . . ."

Re:Ha

[dgatwood]

If wages outpace inflation*, it encourages a bubble in consumer confidence, as consumers have literally more money than they know what to do with. That in turn lowers saving rates, as people finally splurge on the luxuries they've wanted, without thinking much about how temporary their windfall is.

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 increases risk to future economic downturn when the income stops and they're now in debt and used to a comfortable life. In short, think of 1925, but with rampant money instead of uncontrolled debt.

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

Re:Ha

[interkin3tic]

Also, "Health care automation isn't happening fast enough" is a fair point, except that he seems to think it's because the health care industry is holding it back just because they don't want to change. Medical records are not being held back by a simple lack of will.. Surgical robots often cost enough money to make the military blush, and hospitals don't have infinite money, so we still have human surgeons. Replacing doctors with AI right now would kill a lot of people in addition to the money issue.

Re:Ha

[king neckbeard]

No, the economy not being a zero sum game is a key component to functioning markets. We trade and specialize because utilizing comparative advantages results in a higher yield.

Zero-sum doesn't mean that everybody benefits. It just means that gains for one party don't perfectly correspond with losses for other parties.

Land ownership is practically a zero sum game, at least in terms of area. We can't create new land (with a few specific exceptions), so in order for you to have more land, someone else has to have less. But if I build my cars on a moving assembly line, then the efficiency gains can mean that I can sell the car for less, make more profit, and pay my workers more.

Re:Ha

[modmans2ndcoming]

No, Righties are the idiots who think the solution to poverty is lower taxes and more opportunity..."if poor people would just work harder no one would be poor!!"

Re: Ha

[Anonymous Coward]

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.

Re:Ha

[Dog-Cow]

Economists have invisible hands.

Re:Ha

[jandersen]

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.

Re:Ha

[king neckbeard]

Unless, you know, you are prioritize liquidity over interest. I can pull out $1000 in the bank whenever I want without any fees. If I pull from my 401k, I have to pay a penalty.

Re:Ha

[houghi]

You will be able to pay the workers more per person, but that does not mean that the total amount you need to pay workers stays the same nor that the amount of workers stays the same.
You also need to take into account that you must look at the industry as a whole, not just one company.

So if the industry has work for 1000 workers. Adding machines will make the product more available and will first increase the number of workers as the output will increase.

At some point, you will have reached the maximum output. At that moment adding more automatisation will mean that you indeed can pay workers more that are still at the company. The total amount of workers needed will will decrease. So instead of the 1000, you obly need e.g. 500. The 500 left will get a 50% increase and the rest of the savings go to the cost of the machines.

So the workers get more per person, but over all the 1.000 now get paid as if they where 750. So people are poorer. And that is if they get that 750 and not just 500, so the prices go down a bit or the 250 in the pocket of the person doing the saving.

Because unemployment is the road to riches

[Archtech]

"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."

To which I reply with this:

“When the Englishman speaks of national wealth he means the number of millionaires in the country". - Oswald Spengler

As Spengler was writing nearly 100 years ago, for "Englishman" we may conveniently substitute "American"; and for "millionaires", "billionaires".

Re:Because unemployment is the road to riches

[ShanghaiBill]

There is not a shred of evidence that automation causes unemployment.

In the long run, this is true. But in the short run, there can be dislocation of workers that lack skills for new jobs.

There is plenty of evidence that automation improves living standards and wealth for everybody.

This is also true in the long run. But in the short run, while average living standards improve, the people whose jobs are replaced can see a decline in their living standards. Backhoes reduce wages for ditch diggers, and looms reduce wages for weavers. In time, new opportunities open up and people adapt.

Re:Because unemployment is the road to riches

[gtall]

BS. One car plant employs a lot fewer workers than it used to 30 years ago. Why? Automation. Where did the people go? Some found other jobs, some went back to school to retrain, some went on unemployment. Mining is similar, they are already using self-driving ore carriers. Wait until self-driving cars put cab drivers out of business, and self-driving trust put truckers out of business, and automation takes out burger flippers.

Now that automation is going to effect just about every kind of job, finding other jobs will get harder because whatever industry you choose, it lost jobs through automation as well. Retraining for industries losing jobs isn't a winning proposition. That leaves unemployment.

Re:Because unemployment is the road to riches

[Anonymous Coward]

Which explains why the lowest earning 50% of the citizens make so little money that they don't owe any federal income tax each year? Jobs are lost and some of them get replaced by service sector jobs that pay less and have far less stability than the previous jobs did. Right now, there's more products being manufactured in the US than ever before, but the number of workers that it takes is significantly less than it's been in a long time due to automation and robotics.

There's plenty of wealth, but the wealthy that bribe the politicians to set policies are too selfish to share it. What we need more than anything else is a guaranteed minimum salary that covers the bare necessities. We've got the money necessary to ensure that everybody who works or can't work due to disability, can afford things like food, clothes and shelter without having to completely obliterate the rich to do it.

We just lack the will because corporate media keeps gaslighting us about the reality. At some point something is going to give. Either our economy will collapse the way that the economy of the USSR did or there'll be some sort of revolution as it's pretty clear that the greedy aren't going to exercise any sense when they can just build bunkers and ever taller walls around their property.

Re:Because unemployment is the road to riches

[ooloorie]

In the long run, this is true. But in the short run, there can be dislocation of workers that lack skills for new jobs.

True. But if we design our economy around what's good in the short run, we end up with with what we are seeing: stagnant incomes and rising debt. Pretty much the most fundamental rule of economics and life is that if you want success in the long term, you need to endure hardships in the short term.

Re:Because unemployment is the road to riches

[ooloorie]

One car plant employs a lot fewer workers than it used to 30 years ago. Why? Automation. Where did the people go?

Yet, our U3 unemployment rate is actually lower than it was at the beginning of the 1980's: http://tinyurl.com/lz9qfas

Our labor force participation rate is comparable to 1980: http://tinyurl.com/n4txkor

In fact, the biggest population dropping out of the labor force is (1) retiring baby boomers, and (2) young workers aged 16-25: http://tinyurl.com/jhrrhoz That's mainly the result of misguided economic policies keeping kids in school/college longer than it makes sense.

So, your analysis is strongly contradicted by facts. Automation clearly causes some jobs to go away, but they are obviously replaced by new jobs.

Re:Because unemployment is the road to riches

[djinn6]

Pretty much the most fundamental rule of economics and life is that if you want success in the long term, you need to endure hardships in the short term.

Since when is this a rule? What the heck is "hardships" anyways?

If a farmer has the option of sowing or eating his wheat, and he chooses to sow everything, then he will be dead long before he gets to be "successful". If the farmer sows some, but still too much wheat for him to take care of properly, then he'd have wasted them, and his half-assed attempt to farm everything might have actually hurt his total output.

Often it's a bad idea to trade consumption for investment. There are times when there is too much investment and you end up with waste. Maybe if you waited instead for a more opportune moment to use those natural resources, you could've put them to better use.

Sometimes what seems to be consumption could turn out to be investment, such as nutritious meals for kids, which promotes learning and lowers healthcare costs later.

And sometimes the consumption is not optional, such as when you tell unemployable people to go die in a ditch, and they send you and the rest of your government to the guillotines.

Re:Because unemployment is the road to riches

[BarbaraHudson]

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.

Re:Because unemployment is the road to riches

[BarbaraHudson]

Often it's a bad idea to trade consumption for investment. There are times when there is too much investment and you end up with waste. Maybe if you waited instead for a more opportune moment to use those natural resources, you could've put them to better use.

Neatly sums up all the dot-com bombs. Too much greed hoping to score the next big thing throwing money at fake businesses with a "we're a tech business, we don't need no stinking plan" credo. Fake businesses, fake news, the two need each other to keep the hype mentality and "bigger fool" scams going.

Re:Because unemployment is the road to riches

[Anonymous Coward]

"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.

Re:Because unemployment is the road to riches

[ooloorie]

Compare it to the 50's and 60's, and we're at around the same level of U3 now that they had at the worst of their recessions

If that were due to automation, then U3 wouldn't have fallen to such low values in 2000 and 2008, when it was comparable to the average in the 1960's. And notice that U3 today is with a much larger labor force than in the 1960's.

and labor force participation is still declining even as the economy recovers. That's not a good thing.

That has nothing to do with automation, it has to do with baby boomers retiring, kids staying in school too long, and the welfare state encouraging both men and women to drop out of the workforce.

The big change since 1980 hasn't been automation, which has been going on gradually since the 19th century; the big change has been the massive rise in both legal and illegal immigration, from about 4.7% of the population to about 14% of the population. The vast majority of those immigrants are low skill, low education workers (with only a smaller population of high skill workers), and it is those people who have been displacing the US working class. Note that the absolute 10% increase in immigrants is about the size of the entire U3 unemployment rate.

It is cynical and hypocritical for Democrats and progressives to complain about how automation displaces blue collar workers, when they support vastly increasing the population of low skill workers in the US by importing them.

Re:Because unemployment is the road to riches

[Orgasmatron]

It is cynical and hypocritical for Democrats and progressives to complain about how automation displaces blue collar workers, when they support vastly increasing the population of low skill workers in the US by importing them.

Of course, robots don't vote Democrat, and neither do their children.

Re:Because unemployment is the road to riches

[HiThere]

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.

Re:Because unemployment is the road to riches

[Archtech]

I think we've pushed this "anyone can grow up to be president" thing too far.

Best sig this year!

Maybe this is a good thing?

[skam240]

Maybe it's better increased automation comes slowly as rapid automation generally causes social disruption. Also, after years of declining wages for many Americans it's good to see them come up a bit.

Re:Maybe this is a good thing?

[Opportunist]

Except that this time around there is nowhere to go. When farming got automated, people moved into towns to the emerging industries. That came with its own social problems, but at least people had somewhere to go. When industrial automation happened, people were able to move into the emerging service sector.

There is no new sector to go to for the displaced workers this time. Whatever you could come up with is just as susceptible to automation as the job you just eliminated with automation.

Re:Maybe this is a good thing?

[ShanghaiBill]

Except that this time around there is nowhere to go.

Except that is what people said last time, and the time before that.

Re:Maybe this is a good thing?

[phantomfive]

Except that this time around there is nowhere to go

This is an argument from ignorance. Right now, jobs are being automated, every day. Those people are finding new jobs. You don't see how they are finding new jobs, so you assume they aren't.

We've had entire classes of jobs disappear in the last 30 years. We've had completely new jobs pop up in that time, and every time new automation comes, new jobs pop up.

Now, I think it would be great if AI replaced all our jobs, and we got a basic income in the six digit figures range, but that kind of technology is a long way from today.

Re:Maybe this is a good thing?

[Hognoxious]

Now, I think it would be great if AI replaced all our jobs, and we got a basic income in the six digit figures range

The first one will never completely happen, though it might get to 80 or 90%.

The second one won't at all, because OMG commynissum!

Re:Maybe this is a good thing?

[DigiShaman]

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!

Re:Maybe this is a good thing?

[fluffernutter]

Why would you assume people are finding new jobs? Welfare participation as well as the number of people dropping out of the job market are going up.

Re:Maybe this is a good thing?

[phantomfive]

Your graph stops at 1995. How is that supposed to mean anything?

Re:Maybe this is a good thing?

[Hognoxious]

The real reason is that they think somebody they don't like might be getting something they haven't "earned" or don't "deserve".

Re:Maybe this is a good thing?

[ShanghaiBill]

Those times there *was* somewhere to go

But many people didn't know that at the time. They had no magic crystal ball. Neither do you.

If we really do develop "Hard AI" that can do anything a human can do, that will cause changes to our society even more profound than the transition from agriculture to manufacturing. Your predictions about what will "obviously" happen will be just as silly as prognostications from the 1800s.

Re:Maybe this is a good thing?

[Hognoxious]

364 days on the trot the turkeys saw the farmer coming, and when he arrived he fed them.

Re:Maybe this is a good thing?

[Hognoxious]

What's different this time? Before, there were always empty niches because nothing out-humaned humans, at least not at everything. The AI you proposed would by definition do precisely that.

And you, of course *do* have a crystal ball? Until such time as you do, shove your scare quotes up your arse.

Re:Maybe this is a good thing?

[mbone]

Nature has no preferences.

Re:Maybe this is a good thing?

[ShanghaiBill]

And the time before that, and the time before... oh wait, there was no time before that because the industrial revolution is barely 200 years old.

There were many times before that. In the neolithic times agriculture put millions of hunter-gathers out of work. Since a farmer could produce more food than a hunter or gather, there was obviously no where for those workers to go. Then 3000 years ago the Hittites figured out how to forge Iron, and suddenly all the farmers using stone tools were redundant. Then humans invented concrete, steel, water wheels, printing presses, movable sails, etc.

Progress didn't start 200 years ago.

Re:Maybe this is a good thing?

[Cipheron]

Nature tends towards the most efficient use of resources. It has no preferences because it's not sentient, but it does have tendencies.

Re:Maybe this is a good thing?

[Opportunist]

The problem is that people aren't fully fungible. You can't take someone out of job A and put him into job B. With increasing automation, the demands jobs put onto people increase. Physically, psychologically and most of all intellectually.

300 years ago, someone "stupid" had no problem finding a job. You needed a lot of people whose mental capacities don't really go beyond the ability to dig a trench or carry stuff around. These jobs vanished first. These people found new jobs in the early factories where you weren't really that challenged when you put the same screw on the same socket again and again on the conveyor.

Today's job market has no use for these people anymore. And the pressure increases. Yes, there will be jobs. But the requirements to be able to make them goes up with every generation of automation that takes away more and more jobs that couldn't be done by robots before.

We're at the point now where automated system are capable of making decisions based on facts. Yes, we're about to automate management. Provided management is stupid enough to let it happen.

And what are we going to do with these unemployable idiots, then?

Re:Maybe this is a good thing?

[Hognoxious]

Tell me, what purpose did dinosaurs and passenger pigeons have?

Re:Maybe this is a good thing?

[RespekMyAthorati]

That's a good question, and one you should answer before making grand conclusions like, "we are running out of jobs."

In other words, you have no fucking idea.

Re:Maybe this is a good thing?

[TheRaven64]

The difference isn't some sharp qualitative difference, it's a quantitative difference that's happened each time. Automation always goes for the low skilled jobs and pushes people towards higher-skilled jobs. The problem is that the jobs that people are being pushed to now are either the ones that are next on the list to be automated, or ones that already have skills shortages. You're not going to be fired from a menial job and go and work in a skilled profession, because if you had the skills to do so then you wouldn't be working in the unskilled and poorly paid job to start with.

Re:I thought unemployment was in the double digits

[dprimary]

Correct still 93 million out of work using Trump measurements.

Right conclusion for wrong reason.

[king neckbeard]

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.

Re:Right conclusion for wrong reason.

[ooloorie]

Let's look at some of your statements:

However, we should be automating more, but aren't, because of the cheap labor he's complaining isn't cheap enough.

That cheap labor is largely supplied by illegal immigration. Meaning, if you don't want so much cheap labor and more automation, just deport illegal immigrants.

Make the minimum wage $30 an hour, and anything that can be done by a robot will be soon.

Correct. However, since that's above median family income, it means that more than half of families (let alone Americans) will fall below it.

Paired with appropriate socioeconomic reforms, eventually landing on a UBI, and then things are better for everyone.

If you set the minimum wage to $30 and then redistribute income via a UBI, the effect will be (roughly) that everybody will be living at about a $15/h wage, with only half the people working.

Wages should be considerably outpacing inflation, and that improves the economy, since the working class actually spends their income

Take a potato. You can consume it, or you can cut it up and plant it. If you do the latter, you'll have several potatoes a year later. It's the same with money: if you consume it right now, you end up with less a year from now than if you plant it. Deferring consumption and investing the potato gives you more down the road.

It's the same with money. Redistributing money to increase consumption does not help the economy in the long run, it just creates a short term "stimulus". For long term growth, you need less consumption and more investment.

Re:Right conclusion for wrong reason.

[king neckbeard]

You live in an economic fantasy land.

No, I'm saying the ideal is no labor needed. That doesn't mean that we can attain that ideal any time soon, but that should be the goal we approach, even if we will never fully reach it. The less we NEED to work, the more freedom we have, and the less stressful our lives are.

From the point of view of someone living 300 years ago, we already live in "post labor territory": all the needs an average person could possibly want fulfilled 300 years ago are fulfilled today on no work at all. But today, people aren't satisfied with what would have been a royal standard of living back then.

You could argue that we are post-agrarian, but most people still need to work. And no, it wouldn't be a royal standard of living overall. We have faster transportation and communication than any king had, but we don't have better clothes than royalty did, and we are certainly eating far fewer peacocks than kings of the past. If we get a UBI, you might have a point, but we aren't there yet. It's in the foreseeable future, and it would radically change how we live, but we don't have that yet, so we have to work, even if our jobs are effectively doing nothing.

And 300 years from now, people will want their personal matter synthesizers, their rejuvenated clone bodies, their megawatt home power stations, and their personal spacecraft. And that will still require massive amounts of labor to invent, create, and supply.

Yeah, all human progress is due to people being unhappy with the status quo. However, I would avoid making generalizations centuries ahead. They tend to be way off even in the best estimations.

Yeah...

[Anonymous Coward]

Very entertaining the way the summary seems to recoil in horror at the thought of hiring people and paying them a decent wage.

How can an economy like that ever hope to thrive?

Re:Yeah...

[BarbaraHudson]

Terrible. If this continues for another century, people might actually make up much of the wage stagnation that's happened for the last 40 years. What a f*cktard. Technology can't destroy this useless shill's job fast enough.

Re:Yeah...

[Hognoxious]

But who writes those news articles?

An infinite stack of turtles, perhaps.

Re:Yeah...

[ArmoredDragon]

I don't think that's quite what's happening here. Economies can in fact grow too quickly, especially if it's based mostly on speculation; the housing sector in particular is seeing that in a really bad way right now. (The Fed is supposed to raise the interest rates to prevent this, by the way.)

With that in mind, the author of the article seems to be suggesting that people are being employed into jobs that probably will end up a situation where their employer has no means of paying them during the next recession, which is likely to result in one of two things:

1) Older employees with higher salaries get laid off, with some of the newer lower paid ones being kept in their place
2) Company goes belly-up and everybody there loses their job

If those new jobs were automated instead while the company has the cash to buy machinery, this problem could be avoided.

Furthermore, the author makes the point that we're currently below the natural rate of unemployment. And, if automation was truly killing jobs as the doomsayers are predicting, then we should be above the natural rate of unemployment; certainly not below it.

Re:Yeah...

[Anonymous Coward]

In principle, putting people out of a job while the economy is doing well certainly is better than doing it in a bad economy.
But note that the summary was talking about living standards: If for example robots made heath care cost half as much, then for many people even making 10% less money they would get out ahead. It does in no way solve the wage fairness issue and many other issues, but there is a reasonable argument it would make life better for almost everyone, at the very least long-term.

Re:Yeah...

[Anonymous Cow Ward]

The wage stagnation statistic is largely a myth that economists don't agree with. It uses an inappropriate measure of inflation, discounts changing household size and tax changes, and fails to take into account the improved quality of goods that lead to a higher real purchasing power.

Re:Yeah...

[Rob Y.]

Of course, you're buying into the too, too convenient argument that the company is sure to go belly up without reducing their labor costs. Obviously, even when true, this can only be true on a case by case basis. It's not as if the only thing that makes companies succeed is how cheaply they can operate - and in fact it's not a sure thing that paring labor costs to a minimum translates into operating as cheaply as possible. Besides, good experienced workers contribute value to the company that surely factors into the company's success.

Re: Yeah...

[Dputiger]

It's not very surprising that Chicago School economists would push back hard on this idea. Chicago school ideas are arguably significantly responsible for helping to create the problem. Economists aren't a monolithic group and analyses of these trends vary depending on the economist you read.

Moron

[gweihir]

Or more likely person with an agenda that stands to profit from distributing alternate facts. 86 months is just 7 years and _not_ a long-term trend that can be used to predict what is going to happen in 5, 10, 20 or 50 years. Also, much of what is already used in automation these days is in an experimental phase or in its first, limited deployment.

Anybody that believes "new" jobs will replace the ones lost to automation long-term is completely disconnected from reality and deeply stupid. Of course, there are many people around that are adequately described by these two characteristics.

Re:Moron

[Kjella]

Or more likely person with an agenda that stands to profit from distributing alternate facts. 86 months is just 7 years and _not_ a long-term trend that can be used to predict what is going to happen in 5, 10, 20 or 50 years. Also, much of what is already used in automation these days is in an experimental phase or in its first, limited deployment. Anybody that believes "new" jobs will replace the ones lost to automation long-term is completely disconnected from reality and deeply stupid. Of course, there are many people around that are adequately described by these two characteristics.

Of course not, but whoever thinks they have useful predictions for 50 years out is the fool. What people thought in 1967 is nothing like 2017 is actually like and while we're sometimes tech-pessimists we're also sometimes tech-optimists like fusion power and flying cars. The Google car project started in 2009, it's now 2017 and there's no set launch date for when you'll actually see a non-experimental self-driving car without a backup driver even on a sunny day on a dry highway. And it's not like a billion self-driving cars would roll off the assembly line on day one. What I'm trying to say is that just because something can be automated it could take a lot of time and money to actually automate and that it might not be worth doing until you're doing some pretty big investments. Basically, there's a lot of inertia in the system that might mean your children or grandchildren should worry but the world won't change overnight.

I also don't think you should underestimate how much the human element actually acts as a translator between the customer and the work to be done, sure you could probably with a lot of effort make a robot electrician or a robot plumber. But I think you'd still need someone to mediate between what you want and the robot, even if they're not pulling actual wires or laying down pipes anymore. Same way some extremely optimistic people thought that with 4GL and visual development tools business users would make their own systems and software developers would be a dying breed. Heck robots still haven't even begun to replace burger flippers and fry cooks, maybe we should at least see some more signs of the robot apocalypse before we claim the sky is falling?

There's a surprise...

[fuzzyfuzzyfungus]

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.

Re:There's a surprise...

[Ungrounded Lightning]

I'm totally shocked that the Wall Street Journal might hold this opinion.

They used to be useful. They tended to have real news, and lots of it because their subscriber base used it to make multi-million dollar business decisions.

Then in 2007 Rupert Murdoch bought it from the Bancroft family. And in 2008 he replaced the editor. (Newscorp has a history of letting acquisitions run for a year or so before starting to meddle.)

Further down the spiral

[smugfunt]

'Full employment' should mean everyone has as much work as they want. So it would be 2% or less, entirely made up of those people moving between jobs.
But economists and their paymasters don't want this so they have invented NAIRU, Non-Accelerating Inflation Rate of Unemployment. The idea is that below this unobservable (and therefore arbitrarily chosen) level of unemployment inflation starts to rise, and no amount of human misery is too great a price to pay to prevent that nightmare scenario.

Re:Who cares what the WSJ has to say about it?

[gtall]

Well, they do work, just not manual labor. And the service economy is much larger than manufacturing.

What the WSJ has left out is that their reporters, op-ed people, and just about the entire organization could be replaced with bots. They are mere mouthpieces for companies anyhow. Creating bots to repeat company announcements should be easy to do. The op-ed pieces are cut-and-paste from the right wingers.

Don't forget...

[__aaclcg7560]

What about the 92 million unemployed Americans who are waiting for new coal mining jobs?

Re:Don't forget...

[speedplane]

What about the 92 million unemployed Americans who are waiting for new coal mining jobs?

I find it so sad that the rest of the world is rapidly moving towards renewable technologies, building entire industries, and America is stuck looking backwards on a dead-end technology (carbon capture, notwithstanding). It's as if America has given up on competition with China and Europe, even as the president argues that we can and should compete.

Re:err wut?

[fluffernutter]

Simple, when 90% of the population starves and dies, then the people that remain inherit it all and enjoy increased standard of living. (duh)

Actual wage levels are irrelevant

[Solandri]

For there to be a sale, there has to be a buyer. As Henry Ford inadvertently 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. And the increased sales of his cars helped catapult Ford into one of the wealthiest men in the world.

Countries where the rich keep the masses in check (South/Central America, Middle East) have stagnated at a productivity level of around $10k-$20k per capita per year. To reach Western levels of productivity ($30k-$60k per capita per year), you have to pay workers much closer to the actual value of their productivity. If you don't pay the masses enough, they can't afford to buy stuff, economic activity suffers, and your per capita productivity drops.

So the doomsday scenario of automation taking away everyone's jobs is highly unlikely to happen in developed nations. If it did, the wealthy would actually start to lose wealth because the masses would be underemployed and no longer able to buy the products being produced in automated factories. Every sale needs a buyer. It would then become in the wealthy class' best interest to find ways to put the unemployed back to work - so they can earn money and once again start buying stuff the wealthy are producing in their automated factories. Everyone (wealthy, middle class, poor) will be on the same page, and government action to rectify the situation will pass effortlessly.

Re:Actual wage levels are irrelevant

[demonlapin]

His workers were paid enough to afford to buy the cars they were building.

But that's not why he got rich. He paid what he did in order to get the best workers. So, yeah, if you can identify the most productive workers in society, and use higher wages to get them all working for you, you will absolutely be well-positioned to beat your competitors. That's not the same as saying that raising the general level of wages will somehow automatically increase productivity. The best workers aren't going to stick around and deal with your demanding schedule if they can get the same amount of money for less work at another business down the street.

Re:Actual wage levels are irrelevant

[udachny]

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.