A guy came into my house yesterday and worked on my gas meter. From now on there will be no need for a meter reader to walk house to house, pushing buttons on his little beeping device that records the gas usage. A van will drive down the street and a computer will send a radio signal to the meter, allowing remote reading. Say goodby to a lot of jobs.
Those jobs were not so great. Walking all day in summer heat and winter cold is no fun. The jobs were outsourced long ago by the gas companies, so the wages were low. But at least they were real jobs (that’s a sad line that might be the most common employment wisdom for the foreseeable future).
Anytime I mention this loss of jobs caused by automation, someone jumps up with a comment like “think about all the jobs that were created designing and building those gas meters!” Yes, a few jobs were created. It didn’t take a lot of engineering to create a radio gas meter. The factory where they were built had a few workers, but I’m sure the automation in that factory was high enough to use no more than a fraction of a man-hour per unit. The net result was way over in the “lost jobs” side of the equation.
There is another dumb zombie arguments that is still shambling around the issue of jobs. The proponent notes that the US used to be a agrarian nation, then as mechanical farm production took away jobs, workers switched to factory work. As factory work becomes more automated, jobs switched to service sector. Now that even service sector work is being automated, the argument is made that some new sector of work will provide jobs. There is no “new” sector of jobs. Primary (agriculture, fishing, and extraction such as mining), the secondary sector (approximately the same as manufacturing), the tertiary sector of the economy (service sector or the service industry) are the three parts of the private economy.
That’s all there is. No amount of wishful thinking will produce a new sector.
I’m a science fiction reader, so the concept of automation and robots taking away most of the jobs is something I have read about extensively. There are a few stories where this transition is managed so that society is able to deal with the loss of jobs and ends up improved. The Star Trek series is the most popular, they have no unemployment, in fact they have no money, they use other means to distribute scarce resources. Lots of other stories foresee a huge impoverished lower class, ruled by an elite who spend time amusing themselves with ephemeral games while doing their best to stop thinking about the class beneath them. Marshall Brain’s story Robotic Nation is required reading for the details of how we lose jobs.
The present job losses are not all cyclical, caused by the Great Recession. There are many structural losses, jobs which will never return. I don’t hear a lot of politicians acknowledging this fact. Republicans have a philosophy that requires them to ignore lost jobs, and given the quality of the candidates they are running for president, ignoring reality seems to be a party platform. I hear a few Democrats talk about structural job loss, but they get scared when the shouts of “socialist!’ are thrown at them.
This week President Obama kicked off his campaign with a new theme. It echoed a historic address given by former President Theodore Roosevelt in the same Kansas town more than 100 years ago. Roosevelt infuriated his fellow republicans with the speech that railed against the great trusts that controlled the economy. I have a suspicion that Obama might freak out some of his fellow Democrats with this new line on the economy. I selected a segment of the speech that directly mentions automation and structural job loss.
… Today, over one hundred years later, our economy has gone through another transformation. Over the last few decades, huge advances in technology have allowed businesses to do more with less, and made it easier for them to set up shop and hire workers anywhere in the world. And many of you know firsthand the painful disruptions this has caused for a lot of Americans.
Factories where people thought they would retire suddenly picked up and went overseas, where the workers were cheaper. Steel mills that needed 1,000 employees are now able to do the same work with 100, so that layoffs were too often permanent, not just a temporary part of the business cycle. These changes didn’t just affect blue-collar workers. If you were a bank teller or a phone operator or a travel agent, you saw many in your profession replaced by ATMs or the internet. Today, even higher-skilled jobs like accountants and middle management can be outsourced to countries like China and India. And if you’re someone whose job can be done cheaper by a computer or someone in another country, you don’t have a lot of leverage with your employer when it comes to asking for better wages and benefits – especially since fewer Americans today are part of a union.
Now, just as there was in Teddy Roosevelt’s time, there’s been a certain crowd in Washington for the last few decades who respond to this economic challenge with the same old tune. “The market will take care of everything,” they tell us. If only we cut more regulations and cut more taxes – especially for the wealthy – our economy will grow stronger. Sure, there will be winners and losers. But if the winners do really well, jobs and prosperity will eventually trickle down to everyone else. And even if prosperity doesn’t trickle down, they argue, that’s the price of liberty.
It’s a simple theory – one that speaks to our rugged individualism and healthy skepticism of too much government. It fits well on a bumper sticker. Here’s the problem: It doesn’t work. It’s never worked. It didn’t work when it was tried in the decade before the Great Depression. It’s not what led to the incredible post-war boom of the 50s and 60s. And it didn’t work when we tried it during the last decade.
Remember that in those years, in 2001 and 2003, Congress passed two of the most expensive tax cuts for the wealthy in history, and what did they get us? The slowest job growth in half a century. Massive deficits that have made it much harder to pay for the investments that built this country and provided the basic security that helped millions of Americans reach and stay in the middle class – things like education and infrastructure; science and technology; Medicare and Social Security.
Remember that in those years, thanks to some of the same folks who are running Congress now, we had weak regulation and little oversight, and what did that get us? Insurance companies that jacked up people’s premiums with impunity, and denied care to the patients who were sick. Mortgage lenders that tricked families into buying homes they couldn’t afford. A financial sector where irresponsibility and lack of basic oversight nearly destroyed our entire economy.
We simply cannot return to this brand of your-on-your-own economics if we’re serious about rebuilding the middle class in this country. We know that it doesn’t result in a strong economy. It results in an economy that invests too little in its people and its future. It doesn’t result in a prosperity that trickles down. It results in a prosperity that’s enjoyed by fewer and fewer of our citizens.
Excerpt from Obama’s New Nationalism speech on 12/ 6/11
That’s a speech that very directly addresses automation, and very clearly says “trickle down doesn’t work” Is it an important speech? Robert Reich thinks it is. We have yet to see if the national conversation on the economy turns to structural job loss, but this is a good sign.