I just watched former Michigan Governor Jennifer Granholm’s TED Talk. She provides some nice insight as to what it is really like as a politician trying to grapple with the new realities of the modern world; trying to save jobs in America that just don’t make sense economically any more. Granholm also raises the need to address global climate change as an enigma on equal footing with economic issues. What makes her talk interesting is she sees that a solution to the climate change problem could also be a solution to economic woes, a surprising position given the normal myopia of politicians when it comes to linking environment with economy.
While I like the general slant of Granholm’s view, in particular with respect to proposing a feasible means of stimulating the move to green energy through competitive incentivization programs, I have to disagree that even a major shift to green energy in America is somehow going to bring back “good jobs”.
We can make all the windmills the world needs, and it won’t bring back the robust jobby-ness of the past, because things just don’t work that way. Economics is not going to change course because it would make it easier for us to structure our world. It would not take that many people to make all the windmills we would ever need, because in modern and efficient businesses it just doesn’t take many people to do things. If these green energy companies really did go on a hiring spree and started employing the numbers that politicians would like to see, they would be (a) unsustainable and (b) replaced by more efficient businesses with less costs.
The jobs are never coming back.
To be fair, this post is not so much directed at Granholm in particular, rather it’s aimed at the endless parroting of conventional wisdom about jobs inundating us from all directions. It is in fact, utterly unsurprising to hear a politician talking about a daring new plan to “bring jobs back to [Insert Place Here]“. Given how mercilessly politicians beat the long dead horse of job creation in literally every political speech, the only thing that is surprising is that people still somehow believe that politicians can create jobs.
And this is not to say that business people are the “real job-creators”, and government should just get out of the way. What those business owners and investors are really interested in is making more money. We are not really talking about people here, we are talking about capital, and capital investment flows to the most efficient mechanisms to accomplish work and thus accrue more capital.
In the 21st century, the rules of the game have changed. Capital growth has become decoupled from job growth, yet we still somehow seem to think that a growing economy is going create enough jobs to match the number of people looking for them. Or, maybe if we just trained people to better match the few sectors that are hiring, then there will be enough jobs for people? Please, go ahead and ask a recent University grad about that one.
In my first post to this blog, I talk about the trajectory the economy is on. We are headed towards untold abundance with little need for actual human labor. Examples like people who transport things (ie truck drivers, taxi drivers etc…) provide an easy illustration of how the automation of menial labor is pushing more and more people out of work, but menial service jobs could just as easily be replaced as computers become more adept at digesting natural human language. Even high level jobs could be at risk, as these very expensive positions are targeted by enterprising software companies.
We are not going to get there tomorrow, but eventually your job can be replaced by a computer (or part thereof). And if you don’t have a job today? You can at least partly thank technology for that. Yes, there are many factors involved here (globalization, tax regulations, economics etc…) but greatly increased worker productivity driven by technological innovation should be considered an increasingly important consideration.
Here is a simple example: If you had a magic box that could create (almost) anything for relatively low cost and required very little human labor to do so, what impact would that have on the economy?
At this point in my rant I am obliged to point out what should be obvious. People needing to work less and having greater and cheaper access to goods is a great thing. Industrial development is a good thing and it should not be unduly interfered with, beyond perhaps trying to make it less horribly destructive to the environment.
My point is this, we must accept this uncomfortable fact: There is no natural, physical, economic or legal law which states that economic growth creates more jobs. Yes, jobs have traditionally been a side-benefit of a strong economy, but believing that somehow if we just maintain a strong economy jobs will magically come back is nothing more then a collective delusion. The future is different than the past, deal with it.
It is time change the discourse about jobs. Enough with the increasingly absurd talk about “stimulating growth” because it is the “engine of job creation”. A 20th century approach for a 21st century problem is just not going to work. It is time to stop with the bullshit, suspend our collective illusions about jobs. The jobs are not coming back; now what do we do about it?
There exist policy changes that could help greatly to reinvigorate the job market of today. If there is not enough work to go around, then we can take measures to share the work more equally. Perhaps by decreasing retirement age, we can encourage employers to hire younger people. Shortening the work week could be another approach. How ironic it is that austerity measures everywhere are pushing to raise retirement age and decrease holidays? And this creates more jobs how?
As Wingham Rowan describes in his TED talk, we could also apply the dynamism of high frequency trading to ground level job markets, to get labour to where it is needed more quickly.
All of these ideas are great, and could have real impact on today’s problems, but the elephant in the room is what we do 20 years down the road. How are we going to structure a society that needs radically less human labour? This conversation needs to start now. If we accept the fact that the job market has fundamentally changed, then there are things that can be done about it, but we must first accept this as fact.
So lets take off the jobs coloured glasses and get on with it already.
UPDATE 2014: Since writing this article I have come to support the idea of instituting a basic income. I think it is an idea whose time has come. I am not so optimistic as to think it can solve all of our problems but it would go a long way to providing the kind of breathing room which people need to power economic innovation in today’s world. See Basic Income Means Basic Freedom
UPDATE: NYT article examining the trend of decoupling in the economy.
UPDATE: Not just America, here is a paper examining decoupling of wages and productivity in Australia
See the future