For decades, American workers and their machines advanced in tandem. As companies invested in technology, more workers were needed to operate machines.
That relationship is now looking unsteady.
Since 1999, business investment in equipment and software has surged 33 percent while the total number of people employed by private firms has changed little.
The gap between man and machine widened even further after the 2008-09 recession, helping explain why the United States is struggling to bring down an unemployment rate stuck above 9 percent.
The revolution in information technologies is taking a deeper and deeper hold in the U.S. economy.
Throughout history, technology revolutions have paved the way to forms of employment: Britain's 19th century industrial revolution threw artisans out of work but eventually created mass employment in factories.
But a decade-long drought in jobs in the United States is raising questions whether there is a fundamental shift in the structure of the labor market.
"Labor and capital are out of sync," said Tyler Cowen, an economist at George Mason University in Fairfax, Virginia. "It seems be a growing and strengthening trend... (and) suggests there is this longer-term structural change."
This is something I've commented on before, especially when talking about manufacturing employment. It's actually a very big issue going forward.
11 comments:
The key word in this excerpt seems to be "eventually."
Having an education system that only equips about half the workforce with a college degree, and only a very small portion of them with a college degree in applied sciences, is not an education system that can support a competing economy in the 21st century.
We need radical education reform if we ever expect to change the trend.
Education reform? That is addressing the last century's problem - one that has already been overcome by events - rather than the fast-arriving reality that is leading to greater and greater unemployment - that of machines, software, and manufacturing processes that supplant the need for human labor entirely.
As Mr. Stewart notes with characteristic understatement, this is indeed a "very big issue going forward." Some questions that arise:
1. What happens to resource allocation when work is no longer necessary? How will we decide who gets what? Money in such a society is meaningless.
2. What are people going to do in their spare time - and ALL their time will be spare time.
3. How do we deal with the inevitable depression and nihilism that will result from a society where most of the individuals no longer have any external purpose?
These will be only some of the infinite issues that we'll be dealing with in terms of the coming changes in how everything we consume is made.
The implications of this observation is nothing less than staggering. We are seem to be on the verge of an era when human jobs are insufficient to keep all who want to work gainfully employed. Will we allow the creation of a permanent underclass? I hope not. I fear so.
It is a dire situation indeed. We will all be transformed into liberal bloggers singing the virtues of higher taxes and government employment.
Look here, I'm sick and tired of liberal arts, business people, even Presidents demanding that we create more engineers and scientists -- as if that's the answer. I have a news flash for you: WE DON'T SUPPORT THE SCIENTISTS WE HAVE NOW! Ph.D. Physicists can't get jobs; they go from one PostDoc to the next, making 50k. Our education system is broke. American industry is not investing in the future. Who will hire all these scientists? NIH & NSF? NASA? Those are government positions.
I am an Engineer with 35+ years of experience. With so little private R&D, producing more engineers & scientists is a waste of time.
Two thoughts. First, perhaps there will eventually be a pushback towards local economies, communities and businesses. But whatever happens, I think we're seeing impacts of overpopulation, and it will only get worse (unless we wake up).
I hope someone can help me with im annoying problem with some of my projects, FL Studio 10.
Saxman is right. We have plenty of engineers and scientists. What we don't have, according to MBAs who never made a damn thing in their lives, are two things:
1) MOAR engineers and scientists to bring down their wages to parity with unskilled labor. (This has been repeatedly tried with miserable failure, but they won't stop trying.)
2) Senior-level engineers. Because skilled labor is expensive, MBAs tend to burn out the skilled labor they have. After so many years of 60, 70, 80 hour weeks, you're not eager for that promotion that raises your income by 6% and your hours by another 10%.
Automation is a problem, but it's only part of the problem. The other half is American investors treating workers like they're liabilities. The companies that claim to have a hard time finding qualified workers invariably have no training budget whatsoever.
Not only are labor and capital out of sync, but also wages and housing. I don't see how this much lack of equilibrium can bode well.
And of course CEOs, and their executive team, are the most productive of all and must be paid like the kings/queens they are. Doesn't matter that their compensation/benefits takes a large and quickly expanding chunk of the company's revenue.
This sounds like something straight out of Gene Roddenberry's vision of the future without money, poverty, or war. At least, it sounds like the beginnings of it. Let's just hope we can avoid those nasty 21st-century Eugenics Wars as we make our way to the 23rd century.
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