5 ms·

I don't think the existence of jobs you could quickly retrain to is an eternal law of nature :-(

oli5679 10y ago
Definitely not, but it needs to be explicitly discussed. The previous claim seemed to have the implicit assumption that any retraining/reallocation is de-facto impossible. Automation isn't unambiguously bad news for society at large, although you would expect it to be negative for the people being automated. The extent to which this can be mitigated by retraining/wealth transfers is an interesting question that depends as much on the country's culture and political climate as the properties of the technological advancement.
yummyfajitas 10y ago
No, but at the moment there are many such jobs. Maid, cook, child care, a significant amount of construction labor, etc. I blogged about this a while back. Until robots do all the jobs that are actually done in India (e.g. robot cooks, robot maids, robot cigarette walas), there still exist jobs people can do. Americans just refuse to do them, since it's easier to not work. https://www.chrisstucchio.com/blog/2016/robots_didnt_take_our_jobs.html https://www.chrisstucchio.com/blog/2016/robots_didnt_take_ou... That may happen one day, but at the moment we have a scarcity of labor rather than a surplus.
- cousin_it 10y ago
  Interesting. It seems like a big culprit is high cost of living, which makes many jobs no longer worthwhile. Any ideas why it's so much higher in the US than in India? Is it due to landlords?
  - leereeves 10y ago
    Americans expect and demand a lifestyle most Indians only dream of. For example, electric power consumption per capita is 765 kWh in India, 12,988 kWh in the USA. [1] 1: http://data.worldbank.org/indicator/EG.USE.ELEC.KH.PC http://data.worldbank.org/indicator/EG.USE.ELEC.KH.PC
    - eli_gottlieb 10y ago
      Admittedly, the vast majority of India is nowhere near as cold as the vast majority of America. Americans have to spend energy avoiding death by frost much of the year.
      - leereeves 10y ago
        If we were willing to accept India-like population density and energy use, we could all live in the parts of the US where that's not the case.
      - ozborn 10y ago
        Like many living in the southern USA my air conditioning expenses are much higher than my heating expenses, I'm sure many Indians wouldn't mind air conditioning either.
  - yummyfajitas 10y ago
    I discuss in the article a bit. India is more capitalistic than the US, at least in this regard. Their safety net is a job guarantee rather than the US's ragbag of free money programs (welfare, disability fraud [1], etc), so you don't get to enjoy a life of leisure under any circumstance. In the US, it's pretty easy to get free money and play video games all day. Second, their regulatory structure doesn't destroy as many low skill jobs as ours does (e.g. in the US, a cigarette wala like Eric Garner gets executed, and the cops shut down many food trucks). [1] NPR did an expose a while back on the massive levels of disability fraud in the US. Apparently it's now a shadow welfare system, significantly larger than actual welfare: http://apps.npr.org/unfit-for-work/ http://apps.npr.org/unfit-for-work/
- eli_gottlieb 10y ago
  >That may happen one day, but at the moment we have a scarcity of labor rather than a surplus. Then why have real wages dropped for much of the population, and why is the labor share of GDP at an all-time low?
  - yummyfajitas 10y ago
    First of all, this is a non-sequitur. Market prices can go up or down while scarcity still exists. Scarcity is simply a situation where a lot of people want a good or service, but not all of them can have it. Secondly, your claims about market prices are not even directionally correct. Real wages have dropped because compensation has shifted from wages to benefits. (This effect is larger at the bottom, since non-wage benefits are a fixed cost while wages are variable.) Real compensation per hour has only gone up. https://fred.stlouisfed.org/series/COMPRNFB https://fred.stlouisfed.org/series/COMPRNFB The labor share of GDP is down mainly because investment income (primarily from housing) has increased faster than labor income. https://www.brookings.edu/bpea-articles/deciphering-the-fall-and-rise-in-the-net-capital-share/ https://www.brookings.edu/bpea-articles/deciphering-the-fall... https://www.brookings.edu/wp-content/uploads/2016/07/2015a_rognlie.pdf https://www.brookings.edu/wp-content/uploads/2016/07/2015a_r... Also, significant chunks of the economy have moved into non-labor personal income as the government has shifted from infrastructure/public goods to wealth redistribution.
    - jbooth 10y ago
      If we're talking about economics, I'd say that a 'scarcity' which isn't pushing wages up isn't a scarcity worth thinking about. Money talks.
      - yummyfajitas 10y ago
        Compensation per hour is being pushed up. What's so special about taxable wages as opposed to non-taxable benefits? If taxable wages are preferable to non-taxable benefits, should we eliminate the various laws (e.g. Obamacare, 401k) that push employers to provide benefits rather than wages? Also, there are many market distortions that won't push wages up but will still create scarcity. For example, we could simply ban food vendors/cigarette walas/etc, or we could impose various occupational licensing rules that raise wages for some while lowering them for others. Why are those not worth thinking about?
- randallsquared 10y ago
  > there still exist jobs [like maid, cook, child care] people can do. Americans just refuse to do them In many cases Americans refuse to hire them, for cultural reasons that may be the flip side of Americans refusing to do them. Child care is one that there seems to be a lot of (at least, one hears about it a lot), but maid, cook, butler, and even general handyman are positions that many Americans won't consider hiring someone for, in any stable, ongoing way. I have no problem hiring an electrician to come in and rewire parts of my (1950s era) house, because the maximum I'm willing to pay is above the minimum I would need to pay to avoid feeling like I was cheating them. For full-time cook or maid or general laborer, the willing-max is below the fair-min.
  - yummyfajitas 10y ago
    This is an interesting hypothesis - a culturally imposed minimum wage. I'm a bit suspicious because I don't see much evidence of a floor. For example, people seem quite willing to hire Mexicans outside home depo for relatively low wages. The common solution to sticky nominal wages is economic stimulus; inflate away real wages to trick people into hiring at lower real wages. Do you think that would fix this issue?
- ohnomrbill 10y ago
  Anyone can cook. Will people pay me a living wage to cook? Will that wage cover lost income from being on government programs? Does cooking (given the relative difficulty of becoming wealthy doing so) provide an income ceiling higher than getting paid via welfare/Social Security? There is plenty of work to be done. It's just not paid work. How do you propose to coerce people to pay for this work?
  - yummyfajitas 10y ago
    I propose to replace welfare/disability fraud/etc with a guarantee job (FDR style) that pays in-kind benefits. I.e., if you claim you can't find a job, the government will give you a job fixing our crumbling infrastructure, providing child care for working women, or similar things. In return you get a room in a government dormitory, a healthy meal from the government cafeteria, a government track suit, etc. Now the "sit at home playing video games and get free money" choice has been removed. You'll still have a minimum standard of living, but you must contribute to the world rather than simply living a life of leisure. I.e. shared responsibility.
    - auggierose 10y ago
      I don't want my children to be taken care of by people forced by the government to work. I would want them to enjoy that work AND be skilled in it.
      - yummyfajitas 10y ago
        No one is forced to do anything. Anyone who doesn't want a government job is free to refuse and make their own way in the world - in fact, that's the preferred option. If you are actually saying you don't want your children taken care of by someone doing it for the money (or prefer a person selling the "artisinal child care" persona), that's fine. Many wealthy people in the west can afford to hold out for such things. Others are less picky and just need a responsible adult to keep their children from eating poop or dying of thirst, and teaching them a little Marathi is just a bonus. Should those people be deprived since the service doesn't meet your standards? Note that public schools mainly just meet the latter standard - should we get rid of them also?
- PeterisP 10y ago
  Those jobs are impossible without a very high inequality. In the first world, there is a much smaller gap between the average wage and the minimum allowed wage than in India, making impossible many jobs that are time intensive with low revenue. An engineer can have a cook and a driver if they make ten times as much as a cook or a driver; this arrangement doesn't really work if a typical engineer makes e.g. two or three times as much. Yes, there would be a larger total demand for labor if we allowed the price to drop below that. But we don't. As we cut off the market to allow only transactions above the "livable wage" price floor, then at that price level we have a surplus of labor supply and a lack of demand.
  - yummyfajitas 10y ago
    India has lower income inequality than the US. Your hypothesis seems falsified. https://en.wikipedia.org/wiki/List_of_countries_by_income_equality https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...
    - PeterisP 10y ago
      This measure of inequality is mostly influenced by the distance between the mean income and the largest earners (who constitute a huge portion of the total GDP), however, I still maintain that in India there is a much larger distance between the mean income and the lowest wages of simple laborers/maids/walas/etc than the first world. It seems that you are from India, can you give an anecdotal example of how large is difference between the income of "typical" experienced white collar specialist and the income of cheapest maids, cooks or cigarette walas, the bottom part of the labor pool? E.g. in the UK the median hourly wage is roughly twice as much as the minimum; the very very lowest possible paying job pays half that of a "normal" average job; and statistics show that the median salary of a software engineer, considered a lucrative career, is 6 times that of the minimum. Obviously the average person can't buy much of services (no matter how unskilled and lowpaid) of others, since buying 40 hours/week of anyone costs at least half of their total income; and a software engineer could have a full-time (again, 40hr/week not the whole week) cook/maid/driver/whatever only if he paid him at least 1/6th of his total income.
- dragonwriter 10y ago
  > Maid, cook, child care ... > Americans just refuse to do them Lots of Americans work as cooks, work cleaning homes, or work in child care. Wages in all three of those areas are quite low, there's not demand for a lot more that would provide livable wage in any of them.
crdoconnor 10y ago
I think if you're going to reject 200 years of historical trends you ought to have a pretty good justification for why this time it's different.
- unprepare 10y ago
  But extrapolating 1850s trends onto 2020 makes perfect sense, gotcha.

Definitely not, but it needs to be explicitly discussed. The previous claim seemed to have the implicit assumption that any retraining/reallocation is de-facto impossible. Automation isn't unambiguously bad news for society at large, although you would expect it to be negative for the people being automated. The extent to which this can be mitigated by retraining/wealth transfers is an interesting question that depends as much on the country's culture and political climate as the properties of the technological advancement.

yummyfajitas 10y ago

No, but at the moment there are many such jobs. Maid, cook, child care, a significant amount of construction labor, etc. I blogged about this a while back. Until robots do all the jobs that are actually done in India (e.g. robot cooks, robot maids, robot cigarette walas), there still exist jobs people can do. Americans just refuse to do them, since it's easier to not work. https://www.chrisstucchio.com/blog/2016/robots_didnt_take_our_jobs.html https://www.chrisstucchio.com/blog/2016/robots_didnt_take_ou... That may happen one day, but at the moment we have a scarcity of labor rather than a surplus.

cousin_it 10y ago
Interesting. It seems like a big culprit is high cost of living, which makes many jobs no longer worthwhile. Any ideas why it's so much higher in the US than in India? Is it due to landlords?
- leereeves 10y ago
  Americans expect and demand a lifestyle most Indians only dream of. For example, electric power consumption per capita is 765 kWh in India, 12,988 kWh in the USA. [1] 1: http://data.worldbank.org/indicator/EG.USE.ELEC.KH.PC http://data.worldbank.org/indicator/EG.USE.ELEC.KH.PC
  - eli_gottlieb 10y ago
    Admittedly, the vast majority of India is nowhere near as cold as the vast majority of America. Americans have to spend energy avoiding death by frost much of the year.
    - leereeves 10y ago
      If we were willing to accept India-like population density and energy use, we could all live in the parts of the US where that's not the case.
    - ozborn 10y ago
      Like many living in the southern USA my air conditioning expenses are much higher than my heating expenses, I'm sure many Indians wouldn't mind air conditioning either.
- yummyfajitas 10y ago
  I discuss in the article a bit. India is more capitalistic than the US, at least in this regard. Their safety net is a job guarantee rather than the US's ragbag of free money programs (welfare, disability fraud [1], etc), so you don't get to enjoy a life of leisure under any circumstance. In the US, it's pretty easy to get free money and play video games all day. Second, their regulatory structure doesn't destroy as many low skill jobs as ours does (e.g. in the US, a cigarette wala like Eric Garner gets executed, and the cops shut down many food trucks). [1] NPR did an expose a while back on the massive levels of disability fraud in the US. Apparently it's now a shadow welfare system, significantly larger than actual welfare: http://apps.npr.org/unfit-for-work/ http://apps.npr.org/unfit-for-work/
eli_gottlieb 10y ago
>That may happen one day, but at the moment we have a scarcity of labor rather than a surplus. Then why have real wages dropped for much of the population, and why is the labor share of GDP at an all-time low?
- yummyfajitas 10y ago
  First of all, this is a non-sequitur. Market prices can go up or down while scarcity still exists. Scarcity is simply a situation where a lot of people want a good or service, but not all of them can have it. Secondly, your claims about market prices are not even directionally correct. Real wages have dropped because compensation has shifted from wages to benefits. (This effect is larger at the bottom, since non-wage benefits are a fixed cost while wages are variable.) Real compensation per hour has only gone up. https://fred.stlouisfed.org/series/COMPRNFB https://fred.stlouisfed.org/series/COMPRNFB The labor share of GDP is down mainly because investment income (primarily from housing) has increased faster than labor income. https://www.brookings.edu/bpea-articles/deciphering-the-fall-and-rise-in-the-net-capital-share/ https://www.brookings.edu/bpea-articles/deciphering-the-fall... https://www.brookings.edu/wp-content/uploads/2016/07/2015a_rognlie.pdf https://www.brookings.edu/wp-content/uploads/2016/07/2015a_r... Also, significant chunks of the economy have moved into non-labor personal income as the government has shifted from infrastructure/public goods to wealth redistribution.
  - jbooth 10y ago
    If we're talking about economics, I'd say that a 'scarcity' which isn't pushing wages up isn't a scarcity worth thinking about. Money talks.
    - yummyfajitas 10y ago
      Compensation per hour is being pushed up. What's so special about taxable wages as opposed to non-taxable benefits? If taxable wages are preferable to non-taxable benefits, should we eliminate the various laws (e.g. Obamacare, 401k) that push employers to provide benefits rather than wages? Also, there are many market distortions that won't push wages up but will still create scarcity. For example, we could simply ban food vendors/cigarette walas/etc, or we could impose various occupational licensing rules that raise wages for some while lowering them for others. Why are those not worth thinking about?
randallsquared 10y ago
> there still exist jobs [like maid, cook, child care] people can do. Americans just refuse to do them In many cases Americans refuse to hire them, for cultural reasons that may be the flip side of Americans refusing to do them. Child care is one that there seems to be a lot of (at least, one hears about it a lot), but maid, cook, butler, and even general handyman are positions that many Americans won't consider hiring someone for, in any stable, ongoing way. I have no problem hiring an electrician to come in and rewire parts of my (1950s era) house, because the maximum I'm willing to pay is above the minimum I would need to pay to avoid feeling like I was cheating them. For full-time cook or maid or general laborer, the willing-max is below the fair-min.
- yummyfajitas 10y ago
  This is an interesting hypothesis - a culturally imposed minimum wage. I'm a bit suspicious because I don't see much evidence of a floor. For example, people seem quite willing to hire Mexicans outside home depo for relatively low wages. The common solution to sticky nominal wages is economic stimulus; inflate away real wages to trick people into hiring at lower real wages. Do you think that would fix this issue?
ohnomrbill 10y ago
Anyone can cook. Will people pay me a living wage to cook? Will that wage cover lost income from being on government programs? Does cooking (given the relative difficulty of becoming wealthy doing so) provide an income ceiling higher than getting paid via welfare/Social Security? There is plenty of work to be done. It's just not paid work. How do you propose to coerce people to pay for this work?
- yummyfajitas 10y ago
  I propose to replace welfare/disability fraud/etc with a guarantee job (FDR style) that pays in-kind benefits. I.e., if you claim you can't find a job, the government will give you a job fixing our crumbling infrastructure, providing child care for working women, or similar things. In return you get a room in a government dormitory, a healthy meal from the government cafeteria, a government track suit, etc. Now the "sit at home playing video games and get free money" choice has been removed. You'll still have a minimum standard of living, but you must contribute to the world rather than simply living a life of leisure. I.e. shared responsibility.
  - auggierose 10y ago
    I don't want my children to be taken care of by people forced by the government to work. I would want them to enjoy that work AND be skilled in it.
    - yummyfajitas 10y ago
      No one is forced to do anything. Anyone who doesn't want a government job is free to refuse and make their own way in the world - in fact, that's the preferred option. If you are actually saying you don't want your children taken care of by someone doing it for the money (or prefer a person selling the "artisinal child care" persona), that's fine. Many wealthy people in the west can afford to hold out for such things. Others are less picky and just need a responsible adult to keep their children from eating poop or dying of thirst, and teaching them a little Marathi is just a bonus. Should those people be deprived since the service doesn't meet your standards? Note that public schools mainly just meet the latter standard - should we get rid of them also?
PeterisP 10y ago
Those jobs are impossible without a very high inequality. In the first world, there is a much smaller gap between the average wage and the minimum allowed wage than in India, making impossible many jobs that are time intensive with low revenue. An engineer can have a cook and a driver if they make ten times as much as a cook or a driver; this arrangement doesn't really work if a typical engineer makes e.g. two or three times as much. Yes, there would be a larger total demand for labor if we allowed the price to drop below that. But we don't. As we cut off the market to allow only transactions above the "livable wage" price floor, then at that price level we have a surplus of labor supply and a lack of demand.
- yummyfajitas 10y ago
  India has lower income inequality than the US. Your hypothesis seems falsified. https://en.wikipedia.org/wiki/List_of_countries_by_income_equality https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...
  - PeterisP 10y ago
    This measure of inequality is mostly influenced by the distance between the mean income and the largest earners (who constitute a huge portion of the total GDP), however, I still maintain that in India there is a much larger distance between the mean income and the lowest wages of simple laborers/maids/walas/etc than the first world. It seems that you are from India, can you give an anecdotal example of how large is difference between the income of "typical" experienced white collar specialist and the income of cheapest maids, cooks or cigarette walas, the bottom part of the labor pool? E.g. in the UK the median hourly wage is roughly twice as much as the minimum; the very very lowest possible paying job pays half that of a "normal" average job; and statistics show that the median salary of a software engineer, considered a lucrative career, is 6 times that of the minimum. Obviously the average person can't buy much of services (no matter how unskilled and lowpaid) of others, since buying 40 hours/week of anyone costs at least half of their total income; and a software engineer could have a full-time (again, 40hr/week not the whole week) cook/maid/driver/whatever only if he paid him at least 1/6th of his total income.
dragonwriter 10y ago
> Maid, cook, child care ... > Americans just refuse to do them Lots of Americans work as cooks, work cleaning homes, or work in child care. Wages in all three of those areas are quite low, there's not demand for a lot more that would provide livable wage in any of them.

crdoconnor 10y ago

I think if you're going to reject 200 years of historical trends you ought to have a pretty good justification for why this time it's different.

unprepare 10y ago
But extrapolating 1850s trends onto 2020 makes perfect sense, gotcha.