Where are all the jobs? And why those jobs are not coming back
I have been thinking a lot about our economic situation as a country, as well as the issues going on worldwide, and have begun to think our problem may be more fundamental than people realize. What if continued advancements in science, technology and education are simply not compatible with our current social and economic model over the long term? It seems that a fundamental aspect of our social and economic system, at least in the US, is an assumption that the number of workers necessary (X) to complete all work that needs to be done (across all industries) requires roughly the number of workers available (Y) to work.
With the number of people currently unemployed amid record profits it is not a far stretch of the imagination to begin thinking this assumption may no longer be accurate. So what has happened? Science, technology, and education have happened. Over time the ability of fewer numbers of people to do more (and often better) work has skyrocketed and I suspect that while the quantity of necessary work has indeed increased with population growth it has likely not kept up.
A quick search brings upA History of American Agriculture provided by the United States Department of Agriculture(USDA). Here we find that in 1830 “about 250-300 labor-hours [were] required to produce 100 bushels (5 acres) of wheat” while in 1987 “3 labor-hours [were] required to produce 100 bushels (3 acres) of wheat”, the same output, for less effort, on utilizing less land. Anotherexample provided by the Michigan Department of Education tells us that “when farmers had to milk by hand, it used to take two people about two and one-half hours to milk 20 cows. Today, an electric milking machine enables one farmer to milk 20 cows in about 15 minutes”. Advancements in science and technology had a broad impact on the farming community, gradually reducing the number of farmers necessary to produce enough food and supplies for even a growing population. Again from the USDA we find apage giving us statistics on the % of the US population that were farmers in select years. In 1790 farmers represented “90% of [the] labor force” while in 1990 farmers represent “2.6% of [the] labor force”. This was possible, even with the growing population because of the advances that created the increased yields from less effort described earlier. More information can be gleamed from theU.S. Farm Facts page at Monsanto’s website where we learn that “today, the average U.S. farmer feeds 155 people” up from 26 in 1960.
So what happened to all of the people that were no longer necessary to produce the amount of food we, as a nation, needed? By and large, they transitioned into manufacturing jobs. According toTheTrumpet.com by 1965 “manufacturing accounted for 53 percent of the[American] economy”. However, by 2004 “it accounted for just 9 percent”. So what happened? Many will be quick to blame outsourcing to cheap labor in foreign countries, and for a while that may have been correct but it no longer holds up. Former Clinton administration Secretary of Labor Robert Reich helps us understand why in an article discussing theThe Future of Manufacturing, GM, and American Workers. Reich goes on to explain that “factory jobs are vanishing all over the world…even China is losing them”. This is largely because “new factories are chock full of automated and computerized machines. As a result, they don’t need as many manufacturing workers as before.” Reich goes on to discuss this issue in aForbes.com article where he urges Americans not to focus on bringing manufacturing jobs back to the US because, as an industry, it is a dead end in regard to job production. He sums up with an anecdote, “I recently toured a U.S. factory containing two employees and 400 computerized robots. The two live people sat in front of computer screens and instructed the robots. In a few years this factory won’t have a single employee on site, except for an occasional visiting technician who repairs and upgrades the robots.”
Once we reach a certain disparity between X and Y it will become necessary to begin offering aguaranteed minimum income or something similar. “Guaranteed minimum income (GMI) is a system of social welfare provision that guarantees that all citizens or families have an income sufficient to live on, provided they meet certain conditions.” Unfortunately, at the moment the idea of welfare, at least inthe US, generally refers to “financial aid for the poor”. However, “in Europe, it has a different connotation, and it is defined as a universal service, available to rich and poor alike, thus guaranteeing a minimal level of well-being and social support for all citizens”. Once something of this kind if offered a certain % of the population will deem it sufficient and simply remove themselves from the labor pool bringing X and Y closer together again, essentially the initial benefit should be such that it provides a livable income and being X and Y as close together as possible. Presumably, as X continues to be reduced, the quality of life afforded by the offered GMI will continue to rise. Thus, as the need for workers continues to be reduced, the benefits and lifestyle afforded to those choosing not to work should continue to raise maintaining equilibrium.