The Jobs Are Never Coming Back

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

Retail automation

See the future


Maybe We Should Just Relax

“So what is it that you do?”

This timeless cocktail party question is all too often the first thing out of my mouth when I meet someone. What a loaded grenade to lob casually at someone you have never met? Its a question full of cultural expectation. We might as well say, “So, what is your status in society?” or “How do you contribute to society?”. We still seem to think that people must have a neat little productive place in society if they are to realize their potential as a human being.

In a world where we are way richer then we have ever been, why is productive work still so highly valued? In a 1932 essay, looking at the economic depression around him, Bertrand Russell reflected on just this question:

From the beginning of civilisation until the Industrial Revolution, a man could, as a rule, produce by hard work little more than was required for the subsistence of himself and his family… A system which lasted so long and ended so recently has naturally left a profound impress upon men’s thoughts and opinions

Clearly, there is some deep sociological programming behind this. Since we started coming together into tribes, we have needed to make sure that everyone was doing their share. The most successful groups would be those that could harness their collective work and if possible even produce some surpluses. Over time, the most successful societies evolved a strong belief in the virtue of work.

Passages from many holy texts underline the connection between belief and work. The Bible says “Slaves, in all things obey those who are your masters on earth… do your work heartily, as for the Lord rather than for men” Colossians 3:22-24. Similarly, the Quran equates idleness with a disconnection from the world and from god.

The need to keep the people busy and productive was an absolute necessity for the rudimentary economies of the past, but in the world of today is there really any need to maintain such a preoccupation with occupation? I would propose that in fact, many problems apparent in our society could at least partially ascribed to a pathological need to keep working as hard and as much as possible.

Even in 1932, Russell could clearly see that the inflexible work day might lead to problems as technology displaced jobs:

Let us take an illustration. Suppose that, at a given moment, a certain number of people are engaged in the manufacture of pins. They make as many pins as the world needs, working (say) eight hours a day. Someone makes an invention by which the same number of men can make twice as many pins: pins are already so cheap that hardly any more will be bought at a lower price. In a sensible world, everybody concerned in the manufacturing of pins would take to working four hours instead of eight, and everything else would go on as before. But in the actual world this would be thought demoralising. The men still work eight hours, there are too many pins, some employers go bankrupt, and half the men previously concerned in making pins are thrown out of work. There is, in the end, just as much leisure as on the other plan, but half the men are totally idle while half are still overworked.

Does that sound eerily familiar to anyone else or is it just me? Imagine if you want, a slightly different scenario, and the pin company is a well oiled machine with a crack team of pin management. The pin managers, well aware of the constant demand for pins, maintain their production level and rather lay off half of their workers. At the same time they take the money they were paying those workers and increase their own salaries. A savy business move, and one that I would be unsurprised to read about from any modern company.

Now at this point I realize that this post is in danger of running off on a socialist tangent, but that is not the point I am driving at here. I don’t mean to suggest that the efficient pin managers should receive no gain, nor that all the pin makers should seamlessly transition to working only half the time. Rather, I simply question whether the outcome of such a scenario might be improved if the collective expectations of work were not quite so high.

Perhaps we all could benefit if we just relax a little bit more? This is not to say that the need to work is completely behind us, rather maybe we don’t need to neurotically worry about working quite so hard when we are living in the magical world of the future.

Yes, we are already living in the future.

Reading the news about national debts, economic downturns, and job rates – you would think that we are on the verge of not even being able to feed ourselves. Don’t be fooled, we are richer then we ever have been, I can’t stress this enough. Next time someone tells you about the economic downturn and the need for austerity, keep in mind that there has been a massive increase in production, per-worker productivity, and total wealth over the last 30 years. Where has all this wealth gone?

Some might suggest we should blame the rich for sucking up all the profit, but maybe it also has something to do with our mentality about work. Maybe, because we are so attached to cultural norms, we have collectively chosen to reinvest our gross productivity into getting even more work done, much to the delight of the capitalist classes who reap the benefit.

Maybe we should just relax.

Our devotion to the work ethic is what loads questions “So, what do you do?” with unnecessary expectation, or leads us to disregard our time in education as not the “real world“. Yes, we should all try to figure out what it is that we can do to contribute to our community, but do we really need this neurotic fixation with profit and productivity? Maybe we should just turn down the knob marked “work ethic” a notch or two. Does anyone really think that it is laziness that is going to take us down as a society?

Even if we disregarding the impact that working too hard might have in terms of reducing the number of jobs available to the cost of encouraging innovation in the work force, there is also the problem of our energies might be channelled into downright destructive pursuits. In some respect, we seem to be a manic society, neurotically obsessed with getting things done while not really considering what the consequences of our work are.

In my last post, I talked about the likelihood that menial jobs in the labour and service industries are rapidly becoming automated. A world where goods keep going up but the amount of human work necessary keeps dropping is not that of tomorrow, but that of today. Does it not seem particularly sick to keep such an absurdly high pressure for people to work in this type of world.

But what would be the benefits of relaxing our expectation for people to work? If we didn’t feel such a strong  compulsion to work hard, would we perhaps hold out a bit longer for more favourable job offers? Would we demand better social benefits? Would we spend longer in school, and pursuing our true interests? Would we lead happier lives? Would we perhaps reconsider what it is that we are channelling our work towards? Now, I don’t suggest we stop teaching our children the value of hard work, but maybe we should stop expecting them to become wage-earners as soon as humanly possible.

Perhaps in the future when someone asks you “So, what do you do?” they will expect response about how you spend your leisure time in interesting ways, instead of what sort of drudgery you do to make money? Come to think of it, maybe this change is already happening. Ultimately its up to each of us as individuals to reassess our relationship with work; collectively, these individual views add up to our cultural beliefs.  When a cultural belief shifts, it becomes a lever which can move the world.