Thursday, February 04, 2010

Jobless recovery- or jobless economy?

It's a conundrum that seems to come up in every conversation that runs more than five minutes- we keep hearing about all the new jobs being created, but we all have friends who are unemployed, or maybe you're the one who is unemployed, and sometimes for a long time. What goes on? Is the government lying about the new job creation?

No. The problem is the term "new jobs"; when one hears of news jobs created, one envisions more people working- but what is happening is that for every job created, another one (at least) is lost. Permanently. Nowadays, when one loses a job, it often doesn't mean that you were laid off and later replaced; it means that the job- not just with that company, but the vocation itself- has disappeared, been rendered obsolete or unnecessary. It's no longer just the young or uneducated being laid off; now it's people in their 40s and 50s, with post-high school educations and long, productive careers whose jobs are disappearing. And there's little or nothing the administration can do about it, especially in the short term.

This assessment of the administration's impotence is not a critique of the Obama administration, or the new Democrat majority- this has been going on for a very long time. If you consider the term "new jobs" to mean "more people are working today than yesterday", then according to this article from Investors.com , there hasn't been a new job created in the US for eleven years. That span includes three presidents, and two changes of majority in Congress. And as near as I can estimate, while there had been genuine job growth before 1999, the rate of job growth had been less than the rate of population growth for at least ten years before that- and that's using the lower estimates of illegal immigration.

How has this elephant in the room gone unnoticed for so long? Partially because in the past, the jobs being eliminated were either obviously obsolete, or low-paid jobs. It's not news when the underclass has high unemployment, or when a manufacturer of buggy whips goes under. But the major reason the elephant has gone unnoticed is that he was hiding behind an economic boom, with increased profits and American made products enjoying competitive advantages worldwide.

Paradoxically, the same phenomenon has caused both the economic boom and the job losses: increased productivity. Not just increased productivity, but really, really increased productivity. And not just in automated factories as you'd imagine, but in every part of the economy. But if one man can do the work of two, then Mr. Two loses his job. That's good news for the stockholders who see more product for less payroll, and therefore higher profits, but it's bad news for Mr. Two- and it's only going to get worse, fast. Let me give you a few things to ponder.

Have you heard of 3-D printers? It's a computer printer that spits out not printed paper, but solid objects. If you have heard of them, you probably know them only as a new technology that has thrown industrial prototypers and modelers out of business, but they're about to be a whole lot more. Watch this Popular Mechanics video of Jay Leno making a part for his car with one... notice that this 3-D copier is capable of printing an entire machine, with moving parts, already assembled! More amazing details here . Yes, the 3-D printer is pricey, but that was last year- forever, in computer terms. Meet The Desktop Factory , $4,995.00. That's a drop in price from corporate investment to middleclass gadget in less than a year; the price may well drop yet another three-fold in a couple years as sales increase, and competitors enter the market. There are other 3-D printers already in use that make copies in metal or ceramic, and are capable of printing circuit boards. How long before they're cheap enough to be in a neighborhood "factory"? There is even one in development called a "cell jet"- like an inkjet, except instead of spraying ink to make a paper copy, it sprays living cells to make artificial organs; you could "print" a replacement heart valve instead of having to kill a pig to get one, for example.

What's that going to do to hundreds of industries? Have you ever had a tooth crowned, or a bridge made? How about instead of filling your mouth with goo to make a mold, sending it to a lab, getting a temporary crown, and coming back a week later to have it fitted, your dentist could scan your mouth before he starts, and by the time he's prepped your tooth, out pops the "printed" crown- and it's a perfect fit first time. How many dental labs full of well paid, highly trained professionals have just been eliminated- permanently? How about instead of shopping online and having the doodad shipped to you, you just download and print it? That's technically possible right now- how soon before it's cost competitive, considering the labor costs, taxes, marketing costs, and shipping costs involved in factories? How many jobs lost worldwide- no matter how cheap labor is, it's more expensive than robot labor. About to make a cynical comment about how we'll all get jobs at the 3-D printer factory? I kid you not; there is one company (at least) already developing a printer that can print more 3-D printers!

Nor is that the only technical advance threatening the structure of our economy. Since this country was founded, we've gone from one farmer being able to feed himself and 3-4 others to modern farmers who can feed themselves and 150-200 others... now there are pilot hydroponic farms that are totally automated. How soon before you just put fertilizer and electricity in one end, and packaged food ready for the supermarket shelf comes out the other end? How many jobs, from stoop labor to skilled processor positions have just been lost? There are other entrepreneurs dreaming of growing cotton in those automated farms, and attaching it to the already automated textile mills... sunlight and fertilizer in one end, ready to wear clothing out the other?

I've only mentioned two technologies; I'm sure you're aware of many others- and each feeds off of and reinforces yet more. We're talking of hundreds of thousands of jobs lost forever here- millions worldwide- just in the next decade or perhaps sooner, given the explosive growth of technology . Unemployment is sitting around 10% right now, and that doesn't count those who went back to school after being laid off and are not currently looking; I've seen estimates that if you include those who are in school because of layoffs (as opposed to kids entering college or tech schools for the first time), the real unemployment rate would be somewhere between 13-15%- and when they graduate, who's going to get the jobs available, a twenty something kid, or the middle aged parent who has to ask for a salary that will cover their mortgage and children? Especially when both employee and employer know the technology they just spent a fortune to learn is already obsolescent?

Fact is, we're already reaching a point where even going back to school won't help- there simply aren't enough productive jobs to go around. Soon, as productivity increases, a large plurality of the population will be "Mr. Two". It amazes me that people can get their undies in a bunch over climate change that may or may not occur in a few centuries, when we're heading for major social upheaval in a few decades- or sooner. We must develop a new social paradigm... how do you run an economy and a society when only three or four people out of ten are actually needed to produce the necessities of life for all? What do you do with all the people who are no longer needed at the farms and factories- or even retail outlets?

Science fiction writers saw this coming long ago- Mack Reynolds wrote of a future America practicing what he called "People's Capitalism"- he saw it coming about when during an economic crisis, corporations were so broke they couldn't pay their taxes, so the government accepted payments in stock rather than cash; when the crisis was over, and profits started pouring in to the government, it was paid out to the citizens in a sort of negative income tax, allowing people to live without the jobs that no longer existed. Sort of like Alaska and the oil tax profits. Is that the best path? Who knows- there are plenty of problems with the concept; that was the basis of many of his stories. But we need to start working on the problem today, because it's coming a Hell of a lot faster than global Warming is.

3 comments:

Strange Attractor said...

Cory Doctorow's new book The Makers deal with the social issues caused by 3-D printers. I had no idea they were real tech though.

TK K said...

Excellent post. My husband, a pharma scientist, worked with 3-D printer tech at a small start-up, around 5 years ago. He was working on bone void fillers at the time, for when you crush your leg or spine so badly that there isn't enough bone left to knit together.

Your suppositions are absolutely correct. There were also plans for printed hearts, kidneys, bladders, and eyes.

politywonk said...

Your title and these comments move the public conversation where it needs to go. "The stimulus" is a lie because it assumes business WANTS to create jobs. Wrong. Not here. Not in China. Nowhere. You called it! Thanks.