7 ms·

Are global wages about to turn?

49 points by SimplyUseless 11y ago

Swizec 11y ago
Does this mean that there are less people competing for jobs every year and we should negotiate accordingly? What are the implications on job hopping? In theory my market value should go up every year even if all other factors remain constant.
- kenferry 11y ago
  I suppose it would if there was perfect liquidity in the entire job market as a whole, and if the effect size was large. In practice, I'd expect aspects local to your area and industry to dominate any kind of macro trend like this.
- Futurebot 11y ago
  If one is in a non-routine job that requires creativity, the human touch, synthesizing (currently) difficult concepts together, etc. then the job market is going to be great for a while. Software developers (particularly, as several recent papers indicate) with great communication skills and high emotional intelligence, "designers" (used very broadly - could be anything from art design to system design), marketers, artists of various kinds (though this will be subject to the superstar effect), politicians, certain kinds of teachers (I'm including everything from the creators of tutorials to Sal Khan-types) and various types of business owners/managers will be in good shape for a while. Anyone in these categories willing to become non-stop learn-for-lifers (http://www.nytimes.com/2012/09/22/business/to-stay-relevant-in-a-career-workers-train-nonstop.html http://www.nytimes.com/2012/09/22/business/to-stay-relevant-...) will likely be OK. So yes, your negotiating position may actually improve a great deal. If one is in an a "routine" job (as defined by Autor), one should be thinking very carefully about the next few decades. Upskilling, becoming autodidacts, and most importantly agitating for political change will be things that this group needs to engage in (the former two to stay relevant; the latter to keep eating.)
- zanny 11y ago
  There are less people competing for less jobs because people have less money to stimulate demand. You won't build a widget factory if nobody can afford widgets. The negative effects of deflation outpace the potential negotiating power of having lower workforce participation.
mjevans 11y ago
How about the impact of automation on jobs. Will this finally mean that we have robots perform more of the drudgery work? Maybe a return to artisans lovingly crafting luxury goods?
- hugh4 11y ago
  You can already get lovingly handcrafted luxury goods if you want them. They're expensive, and they're not going to get cheaper. If I need a new wallet I can buy a cheap one which was mass-produced in a factory for ten bucks, or I can buy a nice one which was also mass-produced in a factory for two hundred bucks, but if I want one that was lovingly hand-crafted by an artisan over a period of a week and a half I've gotta pay a week and a half's skilled wages, and there aren't that many people with the money and the desire to surround themselves with pointless proof-of-work.
- zanny 11y ago
  > Maybe a return to artisans lovingly crafting luxury goods? Return? At no point in human history have more people been wealthier than today, even as a percent of the population. Today, the artisans are already the rich who need not fend for their survival. Never has there been a time where the major of people need not sweat their brow to eat the next day, at least according to the economics of their time. The rich have always enjoyed the luxury to pursue whatever interested them, including culture. And like I said, despite the doom and gloom, we have more rich people today than ever. Its just we also have way more poor working class who are getting worse with no correction in sight or reason.
hwstar 11y ago
I have to disagree about the demographics. The job market will not improve. It will continue to deteriorate. China may have a growing middle class, but there are over 1 billion people in India and 1.1 billion people in Africa which have yet to be brought into the middle class, and companies will take advantage of this army of reserve labour. By the time these countries have been exploited, then robotics will have taken over and most everyone will be unemployed. Once fully automated, are the owners of the robots going to be even richer than today, and the rest of the world population left to live in misery, or will there be a revolution (peaceful or violent) which forces redistribution?
- kenferry 11y ago
  > By the time these countries have been exploited, then robotics will have taken over and most everyone will be unemployed. Do you think the world is running out of problems to be solved? I don't particularly, so automation doesn't concern me per se. I am concerned that we need to address mobility and people's chances to learn new things, so that people are able to work on whatever problems need working on.
  - hwstar 11y ago
    No. The world isn't running out of problems to solve, but if we are not careful, we may not be allowed to take on the challenge and solve them. Either the rich will do this by force using their agents (e.g police, military, mercenaries, security robots) , or the intelligent robots will do it.
- cpursley 11y ago
  > By the time these countries have been exploited. While I agree with many of your points, and certainly there are many people who get exploited. But overall, if employers and employees are agreeing to mutual employment terms without coercion, then by definition it is not exploitation. Additionally, things robotics and 3D printing are different than events like the industrial revolution which a large amount of capital was required. The owners of robotics and computing will be much more distributed and require less capital. Brining people into the middle class with the modern infrastructure and stability that comes with is a really great thing. Robotics will only augment the quality of life for these people, freeing up massive amounts of human potential.
alexhu11 11y ago
The elephant in the room I don't hear people discussing is the impending spectre of deflation. If the labor supply diminishes what happens to aggregate demand? Judging from the example of Japan, demands implodes as fewer people buy goods and services because they aren't working! This deflates the currency and pushes the economy in recession. Most of the developed world is sloughing off huge portions of its working populations. For example, Italy is set to halve its workforce in the next decade. There are huge economic, social, and political ramifications.
- InclinedPlane 11y ago
  All the more hilarious in the context of the "immigrants are stealing our jobs" narrative that has always been popular.
  - function_seven 11y ago
    Well, yeah. If jobs are cut in half, and the immigrants steal the other half, then were are you? (I'm not seriously making this statement, but "they" are)
- hwstar 11y ago
  You are correct. It is going to suck living in a developed country unless you have enough money to be financially independent. Deflation is a very likely outcome as the standard of living in the first world countries will decrease, and we will be meeting the third world countries in the middle.
konschubert 11y ago
I see two ways how wages can grow: More wealth is generated (per time) or income is redistributed to the working population. I don't see how any of these follow from the observations noted in the article.
- joeblow99 11y ago
  "redistributed" is another word for "stolen by"
- betaby 11y ago
  You don't own that non-robotic/robotic factory - only sub-percent of the population does, neither you can tax them properly - tax 'optimization'. Thus redistribution is not happening today and there is not going to happen. Most of today's redistribution is from earners income tax, not from business. And less workers means less people from whom to redistribute.
joeblow99 11y ago
In a world where all the hard mental jobs are automated by AI, sales reps will still be employed. It may be that AI will soon write movies and build secure web applications and design cars better than humans. But those sales guys will still be valuable. Damn them.
csense 11y ago
> The global population grew at a rate of almost 2% a year throughout the 1950s, the 1960s, the 1970s and the 1980s. That slowed to a rate of between 1% and 1.5% a year in the 1990s and 2000s and that rate of change is now forecast to fall relatively quickly...The working-age share rose strongly for the 40 years to 2012...An ONS report of 2014 found that UK real wages in the 1970s and 1980s grew by an average of 2.9% a year. That fell to 1.5% in the 1990s, and 1.2% between 2000 and 2010... According to the article's own data, rising real wages have occurred during a time of increasing population and an increasing share of the population being working-age, and slowed as population growth slowed. But the article goes on to argue > A smaller workforce though should raise demand for workers but doesn't this contradict the very evidence cited in the article?

49 points by SimplyUseless 11y ago

Does this mean that there are less people competing for jobs every year and we should negotiate accordingly? What are the implications on job hopping? In theory my market value should go up every year even if all other factors remain constant.

kenferry 11y ago
I suppose it would if there was perfect liquidity in the entire job market as a whole, and if the effect size was large. In practice, I'd expect aspects local to your area and industry to dominate any kind of macro trend like this.
Futurebot 11y ago
If one is in a non-routine job that requires creativity, the human touch, synthesizing (currently) difficult concepts together, etc. then the job market is going to be great for a while. Software developers (particularly, as several recent papers indicate) with great communication skills and high emotional intelligence, "designers" (used very broadly - could be anything from art design to system design), marketers, artists of various kinds (though this will be subject to the superstar effect), politicians, certain kinds of teachers (I'm including everything from the creators of tutorials to Sal Khan-types) and various types of business owners/managers will be in good shape for a while. Anyone in these categories willing to become non-stop learn-for-lifers (http://www.nytimes.com/2012/09/22/business/to-stay-relevant-in-a-career-workers-train-nonstop.html http://www.nytimes.com/2012/09/22/business/to-stay-relevant-...) will likely be OK. So yes, your negotiating position may actually improve a great deal. If one is in an a "routine" job (as defined by Autor), one should be thinking very carefully about the next few decades. Upskilling, becoming autodidacts, and most importantly agitating for political change will be things that this group needs to engage in (the former two to stay relevant; the latter to keep eating.)
zanny 11y ago
There are less people competing for less jobs because people have less money to stimulate demand. You won't build a widget factory if nobody can afford widgets. The negative effects of deflation outpace the potential negotiating power of having lower workforce participation.

mjevans 11y ago

How about the impact of automation on jobs. Will this finally mean that we have robots perform more of the drudgery work? Maybe a return to artisans lovingly crafting luxury goods?

hugh4 11y ago
You can already get lovingly handcrafted luxury goods if you want them. They're expensive, and they're not going to get cheaper. If I need a new wallet I can buy a cheap one which was mass-produced in a factory for ten bucks, or I can buy a nice one which was also mass-produced in a factory for two hundred bucks, but if I want one that was lovingly hand-crafted by an artisan over a period of a week and a half I've gotta pay a week and a half's skilled wages, and there aren't that many people with the money and the desire to surround themselves with pointless proof-of-work.
zanny 11y ago
> Maybe a return to artisans lovingly crafting luxury goods? Return? At no point in human history have more people been wealthier than today, even as a percent of the population. Today, the artisans are already the rich who need not fend for their survival. Never has there been a time where the major of people need not sweat their brow to eat the next day, at least according to the economics of their time. The rich have always enjoyed the luxury to pursue whatever interested them, including culture. And like I said, despite the doom and gloom, we have more rich people today than ever. Its just we also have way more poor working class who are getting worse with no correction in sight or reason.

hwstar 11y ago

I have to disagree about the demographics. The job market will not improve. It will continue to deteriorate. China may have a growing middle class, but there are over 1 billion people in India and 1.1 billion people in Africa which have yet to be brought into the middle class, and companies will take advantage of this army of reserve labour. By the time these countries have been exploited, then robotics will have taken over and most everyone will be unemployed. Once fully automated, are the owners of the robots going to be even richer than today, and the rest of the world population left to live in misery, or will there be a revolution (peaceful or violent) which forces redistribution?

kenferry 11y ago
> By the time these countries have been exploited, then robotics will have taken over and most everyone will be unemployed. Do you think the world is running out of problems to be solved? I don't particularly, so automation doesn't concern me per se. I am concerned that we need to address mobility and people's chances to learn new things, so that people are able to work on whatever problems need working on.
- hwstar 11y ago
  No. The world isn't running out of problems to solve, but if we are not careful, we may not be allowed to take on the challenge and solve them. Either the rich will do this by force using their agents (e.g police, military, mercenaries, security robots) , or the intelligent robots will do it.
cpursley 11y ago
> By the time these countries have been exploited. While I agree with many of your points, and certainly there are many people who get exploited. But overall, if employers and employees are agreeing to mutual employment terms without coercion, then by definition it is not exploitation. Additionally, things robotics and 3D printing are different than events like the industrial revolution which a large amount of capital was required. The owners of robotics and computing will be much more distributed and require less capital. Brining people into the middle class with the modern infrastructure and stability that comes with is a really great thing. Robotics will only augment the quality of life for these people, freeing up massive amounts of human potential.

alexhu11 11y ago

The elephant in the room I don't hear people discussing is the impending spectre of deflation. If the labor supply diminishes what happens to aggregate demand? Judging from the example of Japan, demands implodes as fewer people buy goods and services because they aren't working! This deflates the currency and pushes the economy in recession. Most of the developed world is sloughing off huge portions of its working populations. For example, Italy is set to halve its workforce in the next decade. There are huge economic, social, and political ramifications.

InclinedPlane 11y ago
All the more hilarious in the context of the "immigrants are stealing our jobs" narrative that has always been popular.
- function_seven 11y ago
  Well, yeah. If jobs are cut in half, and the immigrants steal the other half, then were are you? (I'm not seriously making this statement, but "they" are)
hwstar 11y ago
You are correct. It is going to suck living in a developed country unless you have enough money to be financially independent. Deflation is a very likely outcome as the standard of living in the first world countries will decrease, and we will be meeting the third world countries in the middle.

konschubert 11y ago

I see two ways how wages can grow: More wealth is generated (per time) or income is redistributed to the working population. I don't see how any of these follow from the observations noted in the article.

joeblow99 11y ago
"redistributed" is another word for "stolen by"
betaby 11y ago
You don't own that non-robotic/robotic factory - only sub-percent of the population does, neither you can tax them properly - tax 'optimization'. Thus redistribution is not happening today and there is not going to happen. Most of today's redistribution is from earners income tax, not from business. And less workers means less people from whom to redistribute.

joeblow99 11y ago

In a world where all the hard mental jobs are automated by AI, sales reps will still be employed. It may be that AI will soon write movies and build secure web applications and design cars better than humans. But those sales guys will still be valuable. Damn them.

csense 11y ago

> The global population grew at a rate of almost 2% a year throughout the 1950s, the 1960s, the 1970s and the 1980s. That slowed to a rate of between 1% and 1.5% a year in the 1990s and 2000s and that rate of change is now forecast to fall relatively quickly...The working-age share rose strongly for the 40 years to 2012...An ONS report of 2014 found that UK real wages in the 1970s and 1980s grew by an average of 2.9% a year. That fell to 1.5% in the 1990s, and 1.2% between 2000 and 2010... According to the article's own data, rising real wages have occurred during a time of increasing population and an increasing share of the population being working-age, and slowed as population growth slowed. But the article goes on to argue > A smaller workforce though should raise demand for workers but doesn't this contradict the very evidence cited in the article?