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Which jobs were made obsolete? If unemployment were technologically driven, you would expect IT to have less unemployment relative to other industries. But th
by ctkrohn 16y ago
Which jobs were made obsolete? If unemployment were technologically driven, you would expect IT to have less unemployment relative to other industries. But that's not the case. Paul Krugman had a pretty good post on the topic:
http://krugman.blogs.nytimes.com/2011/02/13/whos-unemployed/ http://krugman.blogs.nytimes.com/2011/02/13/whos-unemployed/
- yummyfajitas 16y agoWhich jobs were made obsolete? The data is insufficiently granular to determine that. But as you can see, production has more or less completely recovered: http://research.stlouisfed.org/fred2/series/GDP http://research.stlouisfed.org/fred2/series/GDP http://research.stlouisfed.org/fred2/series/INDPRO http://research.stlouisfed.org/fred2/series/INDPRO Employment has not recovered comparably: http://research.stlouisfed.org/fred2/series/PAYEMS http://research.stlouisfed.org/fred2/series/PAYEMS This means we are producing more now than ever before, and doing it with fewer people. This tells us that many of the people who were laid off are obsolete. Now, as for Krugman's chart, it's somewhat tangential. Krugman as arguing (misleadingly, BTW) against the recalculation hypothesis, which proposes that we have a recession because the economy misallocated people into the wrong sectors. His chart is misleading since it focuses on an irrelevant ratio of two other irrelevant ratios. To determine if the recession is sectorial, one must look at employment [1]. If we do this, we find that construction employment is down 27% (from Jan 2008 to Jan 2011). Information services employment (I think this includes IT) is down 11%. Finance is down 8%, as is Retail. Durable goods manufacturing is down 22%. http://research.stlouisfed.org/fred2/series/USFIRE http://research.stlouisfed.org/fred2/series/USFIRE http://research.stlouisfed.org/fred2/series/USCONS http://research.stlouisfed.org/fred2/series/USCONS http://research.stlouisfed.org/fred2/series/USINFO http://research.stlouisfed.org/fred2/series/USINFO http://research.stlouisfed.org/fred2/data/USTRADE.txt http://research.stlouisfed.org/fred2/data/USTRADE.txt http://research.stlouisfed.org/fred2/series/DMANEMP http://research.stlouisfed.org/fred2/series/DMANEMP This clearly shows some sectors hit much harder than others, contrary to Krugman's claims. But Krugman's claims are tangential to the main point anyway. [1] Unemployment is a skewed indicator because it excludes people not seeking work and people who find work in other sectors. I.e., a construction worker who finds a new job in retail lowers both the unemployment rate in construction (smaller numerator) and the unemployment rate in retail (bigger denominator). As the employment numbers show, this is a rather large set of people.
- ctkrohn 16y agoAh, good point on why we should look at employment vs. unemployment. Makes sense. I was tempted to argue that the decline in construction doesn't support the "obsolete jobs" hypothesis, because the jobs were created by an overheated housing market and shouldn't have been there in the first place. But regardless of whether the jobs were justified in the first place, they're not coming back. A technological shift isn't the only thing that can make a job obsolete; a one-time speculative bubble can do the same thing.
- yummyfajitas 16y agoNo, you are quite right. The decline in construction jobs doesn't support the "jobs obsolete due to technology" hypothesis. It supports the recalculation hypothesis, but that's a separate issue. It's the increase in production combined with the lack of increase in employment that is evidence in favor of technology making jobs obsolete.