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It's funny that automation is under attack. Any conventional measure says that productivity growth declines and the number of jobs grows. First, the rise of un

It's funny that automation is under attack. Any conventional measure says that productivity growth declines and the number of jobs grows. First, the rise of unemployment is not supported by facts. The widely cited unemployment rate went down to 4.6%.[1] That's the pre-crisis level of the overheated 2008 economy. This reduction is costly, but manageable. Jobs disappear, but new ones get created. Nonfarm payrolls (aka "created jobs") are well above zero.[2] So what's the unemployment the media keep talking about? The unemployment voter. 4.6% is greater than the winner's margin in any of the recent presidential elections. It's a valuable asset to candidates and, thus, a hot media topic. The average voter actually gets better thanks to productivity gains, not employment (which we can't reduce below 4% anyway). Productivity accounted for 2 percentage points of per-hour output growth.[3] It still contributes at least 0.5 pp. This decline is the real problem: losing those 2% means being poorer by 21.9% by the end of the decade. But productivity doesn't vote, so this loss is going to happen. [1] https://fred.stlouisfed.org/graph/?g=4CaW https://fred.stlouisfed.org/graph/?g=4CaW [2] https://fred.stlouisfed.org/graph/?category_id=0&graph_id=12880 https://fred.stlouisfed.org/graph/?category_id=0&graph_id=12... [3] Gordon, “Perspectives on The Rise and Fall of American Growth.” p. 73.

Analemma_ 10y ago
Unemployment, in the sense of "who is looking for a job but can't find one" is low, but the labor force participation rate is at 62.7%, close to a 30-year low [0][1]. It seems to have bottomed-out in the last couple years and is currently holding steady, but the current level is not encouraging. Note that a low participation rate, as in, "people have just given up looking for a job and resigned themselves to permanent unemployment because there are no economic prospects in their vicinity" does tally quite well with the stories the media keeps talking. Note also that median wages are not yet climbing after their recession decline, despite the falling unemployment (classically, 5% is about the level at which you expect wages to start rising), suggesting that a lot of the new jobs being created are kind of shitty. [0] https://data.bls.gov/timeseries/LNS11300000 https://data.bls.gov/timeseries/LNS11300000 [1] http://www.businessinsider.com/labor-force-participation-rate-september-2014-2014-10 http://www.businessinsider.com/labor-force-participation-rat...
- dragonwriter 10y ago
  > labor force participation rate is at 62.7%, close to a 30-year low. It seems to have bottomed-out in the last couple years and is currently holding steady The LFPP is the share over the 16-and-over (with no upper age limit) population that is in working or seeking work. The effect you describe is kind of what you'd expect if a big demographic bulge had been passing into retirement age, and but then largely completed that move.
  - Clubber 10y ago
    This is true, but I assume you are referring to the Baby Boomers. That generation wasn't so much a bulge as it was a boom, meaning the boomers also had at least as many children as they were (average 2 kids per couple). When the next generation goes to retirement, it will be just as large. I guess what I'm saying is if you believe the participation rate will increase because a large group of people are retired and the next generation is smaller, it isn't. https://en.wikipedia.org/wiki/Demography_of_the_United_States https://en.wikipedia.org/wiki/Demography_of_the_United_State...
    - dragonwriter 10y ago
      Actually, no, Gen X was a bust compared to the Boomer generation, followed by another boom with the Millennials, which is why there is a transition directly from Boomers to Millennials as the numerically dominant generation. Fertility dropped starting in the late 50s and more sharply after 1964.
      - Clubber 10y ago
        Yes, you are correct, even accounting for immigration. GenX is of course larger than the Greatest Generation and the Lost Generation that preceded the boomers. We will get a little labor participation relief, but not much. GenX is still significantly larger than the generations proceeding the boomers.
- ArkyBeagle 10y ago
Spooky23 10y ago
Remember that unemployment rates are terms of art that mean specific things. The rate you're citing is the U3 rate, which focuses on active job seekers. What has changed is that other rates, such as U6, have remained higher than typically seen -- the current rate is around 9.6%. Much larger numbers of people are exiting the labor force altogether. That's a symptom of deeper problems in the economy, and promises to get worse before it gets better. In a worst case scenario, were heading towards a new type of feudalism.
- ArkyBeagle 10y ago
  If it is foremost an artifact of population dynamics, then my money is on that. We're aging. 1945 was 71 years ago; the knee of that curve is 3-5 years out.
  - Spooky23 10y ago
    Raw numbers definitely account for that, but labor participation rates take aging out into account. As much as we eyeroll about government efficiency, the Federal government does this sort of thing really well.
    - ArkyBeagle 10y ago
      I stand corrected. Thanks!
hiddndetls84 10y ago
Those are U3 numbers, which IMO is too narrowly defined. It's basically counting people actively applying for a traditional job. See for the various definitions we use for unemployment https://fredblog.stlouisfed.org/2015/05/the-many-flavors-of-unemployment/ https://fredblog.stlouisfed.org/2015/05/the-many-flavors-of-...
st3v3r 10y ago
Jobs disappear, and new ones get created. This is true. However, the new ones are not in the same places as the old ones, they are not the same level of pay, they're not the same level of training, and, most importantly, they're not in the same number as the old ones. Productivity growth is great, if you're in a position to take advantage of it. If you're unemployed, and are unable to get a new job, all the productivity gains in the world won't help you when you can't make your mortgage.
ArkyBeagle 10y ago
Okay, so one activity that is undergoing significant automation is flying jetliners. ADS-B is mandated like in a year or two. This is for safety reasons. That happens to be one case where quality prevents really unfortunate outcomes ( an air crash ) but there's no way to take the side of pilots in this argument. That is why you automate. You automate to improve repeatability of production. If the humans are breaking things - including themselves or other humans - then it is immoral to oppose it, regardless of how it affects our accounting and economic assumptions. This also leaves craftspeople to make numismatically interesting objects, which is a Big Thing - look at Etsy. I like the way it is blurbed in Tyler Cowen's latest book "The Complacent Class": https://www.amazon.com/Complacent-Class-Self-Defeating-Quest-American/dp/1250108691 https://www.amazon.com/Complacent-Class-Self-Defeating-Quest... "The problem, according to legendary blogger, economist and best selling author Tyler Cowen, is that Americans today have broken from this tradition―we’re working harder than ever to avoid change. We're moving residences less, marrying people more like ourselves and choosing our music and our mates based on algorithms that wall us off from anything that might be too new or too different. Match.com matches us in love. Spotify and Pandora match us in music. Facebook matches us to just about everything else."
- JoeAltmaier 10y ago
  As opposed to? The way people used to marry? From their own church and neighborhood? I think this is a case of over-glorifying 'the good old days'
  - ArkyBeagle 10y ago
    Of my own family, about 3 out of... 20(?) couples met locally. That was a big source of diversity. Match.com is a big source of indiversity. If you both line up on an ideological scale, live next to people who have that ideology, pretty soon you forget how to think. Now you have to deal with these people at work. That's one example from a list of examples. People live in bubbles to the point to where I see people in real anguish over who gets elected. And WRT marriage- oh hell yes. I have access to a behavioral ecologist, and she can tell you how pernicious all this is. The easy story is haemophilia in the royal lines in European history. This will be hard on our genetic ( and mental ) diversity. She calls it "electing the President based on a multiple-choice test" for one thing. But it's really more about people living in cognitive bubbles, which makes their thinking hidebound, it makes risks seem larger than they are and it stifles the culture. Throw in a rising Mandarinism - that which is not required is forbidden, and that which is not forbidden is required - and we'll see.

Analemma_ 10y ago

Unemployment, in the sense of "who is looking for a job but can't find one" is low, but the labor force participation rate is at 62.7%, close to a 30-year low [0][1]. It seems to have bottomed-out in the last couple years and is currently holding steady, but the current level is not encouraging. Note that a low participation rate, as in, "people have just given up looking for a job and resigned themselves to permanent unemployment because there are no economic prospects in their vicinity" does tally quite well with the stories the media keeps talking. Note also that median wages are not yet climbing after their recession decline, despite the falling unemployment (classically, 5% is about the level at which you expect wages to start rising), suggesting that a lot of the new jobs being created are kind of shitty. [0] https://data.bls.gov/timeseries/LNS11300000 https://data.bls.gov/timeseries/LNS11300000 [1] http://www.businessinsider.com/labor-force-participation-rate-september-2014-2014-10 http://www.businessinsider.com/labor-force-participation-rat...

dragonwriter 10y ago
> labor force participation rate is at 62.7%, close to a 30-year low. It seems to have bottomed-out in the last couple years and is currently holding steady The LFPP is the share over the 16-and-over (with no upper age limit) population that is in working or seeking work. The effect you describe is kind of what you'd expect if a big demographic bulge had been passing into retirement age, and but then largely completed that move.
- Clubber 10y ago
  This is true, but I assume you are referring to the Baby Boomers. That generation wasn't so much a bulge as it was a boom, meaning the boomers also had at least as many children as they were (average 2 kids per couple). When the next generation goes to retirement, it will be just as large. I guess what I'm saying is if you believe the participation rate will increase because a large group of people are retired and the next generation is smaller, it isn't. https://en.wikipedia.org/wiki/Demography_of_the_United_States https://en.wikipedia.org/wiki/Demography_of_the_United_State...
  - dragonwriter 10y ago
    Actually, no, Gen X was a bust compared to the Boomer generation, followed by another boom with the Millennials, which is why there is a transition directly from Boomers to Millennials as the numerically dominant generation. Fertility dropped starting in the late 50s and more sharply after 1964.
    - Clubber 10y ago
      Yes, you are correct, even accounting for immigration. GenX is of course larger than the Greatest Generation and the Lost Generation that preceded the boomers. We will get a little labor participation relief, but not much. GenX is still significantly larger than the generations proceeding the boomers.
ArkyBeagle 10y ago

Spooky23 10y ago

Remember that unemployment rates are terms of art that mean specific things. The rate you're citing is the U3 rate, which focuses on active job seekers. What has changed is that other rates, such as U6, have remained higher than typically seen -- the current rate is around 9.6%. Much larger numbers of people are exiting the labor force altogether. That's a symptom of deeper problems in the economy, and promises to get worse before it gets better. In a worst case scenario, were heading towards a new type of feudalism.

ArkyBeagle 10y ago
If it is foremost an artifact of population dynamics, then my money is on that. We're aging. 1945 was 71 years ago; the knee of that curve is 3-5 years out.
- Spooky23 10y ago
  Raw numbers definitely account for that, but labor participation rates take aging out into account. As much as we eyeroll about government efficiency, the Federal government does this sort of thing really well.
  - ArkyBeagle 10y ago
    I stand corrected. Thanks!

hiddndetls84 10y ago

Those are U3 numbers, which IMO is too narrowly defined. It's basically counting people actively applying for a traditional job. See for the various definitions we use for unemployment https://fredblog.stlouisfed.org/2015/05/the-many-flavors-of-unemployment/ https://fredblog.stlouisfed.org/2015/05/the-many-flavors-of-...

st3v3r 10y ago

Jobs disappear, and new ones get created. This is true. However, the new ones are not in the same places as the old ones, they are not the same level of pay, they're not the same level of training, and, most importantly, they're not in the same number as the old ones. Productivity growth is great, if you're in a position to take advantage of it. If you're unemployed, and are unable to get a new job, all the productivity gains in the world won't help you when you can't make your mortgage.

ArkyBeagle 10y ago

Okay, so one activity that is undergoing significant automation is flying jetliners. ADS-B is mandated like in a year or two. This is for safety reasons. That happens to be one case where quality prevents really unfortunate outcomes ( an air crash ) but there's no way to take the side of pilots in this argument. That is why you automate. You automate to improve repeatability of production. If the humans are breaking things - including themselves or other humans - then it is immoral to oppose it, regardless of how it affects our accounting and economic assumptions. This also leaves craftspeople to make numismatically interesting objects, which is a Big Thing - look at Etsy. I like the way it is blurbed in Tyler Cowen's latest book "The Complacent Class": https://www.amazon.com/Complacent-Class-Self-Defeating-Quest-American/dp/1250108691 https://www.amazon.com/Complacent-Class-Self-Defeating-Quest... "The problem, according to legendary blogger, economist and best selling author Tyler Cowen, is that Americans today have broken from this tradition―we’re working harder than ever to avoid change. We're moving residences less, marrying people more like ourselves and choosing our music and our mates based on algorithms that wall us off from anything that might be too new or too different. Match.com matches us in love. Spotify and Pandora match us in music. Facebook matches us to just about everything else."

JoeAltmaier 10y ago
As opposed to? The way people used to marry? From their own church and neighborhood? I think this is a case of over-glorifying 'the good old days'
- ArkyBeagle 10y ago
  Of my own family, about 3 out of... 20(?) couples met locally. That was a big source of diversity. Match.com is a big source of indiversity. If you both line up on an ideological scale, live next to people who have that ideology, pretty soon you forget how to think. Now you have to deal with these people at work. That's one example from a list of examples. People live in bubbles to the point to where I see people in real anguish over who gets elected. And WRT marriage- oh hell yes. I have access to a behavioral ecologist, and she can tell you how pernicious all this is. The easy story is haemophilia in the royal lines in European history. This will be hard on our genetic ( and mental ) diversity. She calls it "electing the President based on a multiple-choice test" for one thing. But it's really more about people living in cognitive bubbles, which makes their thinking hidebound, it makes risks seem larger than they are and it stifles the culture. Throw in a rising Mandarinism - that which is not required is forbidden, and that which is not forbidden is required - and we'll see.