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WSJ Columnist: Robots Aren't Destroying Enough Jobs (foxbusiness.com)

Posted by EditorDavid on from the pesky-humans dept.

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."

31 of 389 comments (clear)

  1. Ha by Zxern · · Score: 4, Informative

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

    1. Re:Ha by Sarten-X · · Score: 4, Insightful

      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.

      --
      You do not have a moral or legal right to do absolutely anything you want.
    2. Re:Ha by dgatwood · · Score: 4, Interesting

      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

      --

      Check out my sci-fi/humor trilogy at PatriotsBooks.

    3. Re:Ha by king+neckbeard · · Score: 4, Informative

      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.

      --
      This is my signature. There are many like it, but this one is mine.
    4. Re:Ha by Dog-Cow · · Score: 3, Funny

      Economists have invisible hands.

    5. Re:Ha by jandersen · · Score: 3, Interesting

      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.

  2. Because unemployment is the road to riches by Archtech · · Score: 5, Insightful

    "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".

    --
    I am sure that there are many other solipsists out there.
    1. Re:Because unemployment is the road to riches by Anonymous Coward · · Score: 5, Insightful

      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.

    2. Re:Because unemployment is the road to riches by ooloorie · · Score: 4, Insightful

      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.

    3. Re:Because unemployment is the road to riches by ooloorie · · Score: 4, Informative

      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.

    4. Re:Because unemployment is the road to riches by djinn6 · · Score: 5, Insightful

      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.

    5. Re:Because unemployment is the road to riches by BarbaraHudson · · Score: 3, Interesting

      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.
    6. Re:Because unemployment is the road to riches by Anonymous Coward · · Score: 3, Interesting

      "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.

    7. Re:Because unemployment is the road to riches by HiThere · · Score: 3, Interesting

      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.
  3. Right conclusion for wrong reason. by king+neckbeard · · Score: 4, Interesting

    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.
    1. Re:Right conclusion for wrong reason. by ooloorie · · Score: 4, Interesting

      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.

  4. Yeah... by Anonymous Coward · · Score: 3, Insightful

    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?

    1. Re:Yeah... by BarbaraHudson · · Score: 4, Insightful

      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.

      --
      "Transparent" is a shit show that trades on every stereotype going. A man in drag is NOT a transsexual.
    2. Re:Yeah... by Hognoxious · · Score: 4, Insightful

      But who writes those news articles?

      An infinite stack of turtles, perhaps.

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
  5. Re:Maybe this is a good thing? by Opportunist · · Score: 4, Insightful

    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.

    --
    We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
  6. There's a surprise... by fuzzyfuzzyfungus · · Score: 5, Interesting

    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.

    1. Re:There's a surprise... by Ungrounded+Lightning · · Score: 3, Informative

      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.)

      --
      Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
  7. Re:Maybe this is a good thing? by ShanghaiBill · · Score: 3, Insightful

    Except that this time around there is nowhere to go.

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

  8. Re:Maybe this is a good thing? by phantomfive · · Score: 4, Insightful

    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.

    --
    "First they came for the slanderers and i said nothing."
  9. Re:Maybe this is a good thing? by DigiShaman · · Score: 3, Interesting

    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.
  10. Re:err wut? by fluffernutter · · Score: 3, Insightful

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

    --
    Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
  11. Actual wage levels are irrelevant by Solandri · · Score: 5, Informative

    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.

    1. Re:Actual wage levels are irrelevant by demonlapin · · Score: 5, Insightful

      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.

    2. Re:Actual wage levels are irrelevant by udachny · · Score: 3, Interesting

      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.

      --
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  12. Re:Maybe this is a good thing? by Cipheron · · Score: 3, Insightful

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

  13. Re:Don't forget... by speedplane · · Score: 3, Insightful

    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.

    --
    Fast Federal Court and I.T.C. updates