7 ms·

Recession, tech kill middle-class jobs

43 points by dgunn 14y ago

dgunn 14y ago
This makes me wonder what a world without jobs will look like. Will a good quality life, food, shelter, money, etc just be human rights?
- joshAg 14y ago
  It'd probably looks quite a bit like pure communism.
  - zanny 14y ago
    Which means we are going to destroy ourselves before admitting we don't need people without drive or motivation in creative pursuits working menial tasks. I imagine when we get there, we are going to have an absurd concentration of wealth as the automated means of production are in the hands of very few ultra-wealthy, and everyone else is destitute because their factories and robots make everything for effectively free. That sounds like bloody revolution.
    - busyant 14y ago
      Krugman says precisely what you have said: "Ah, you ask, but what about the people? Very good question. Smart machines may make higher GDP possible, but also reduce the demand for people — including smart people. So we could be looking at a society that grows ever richer, but in which all the gains in wealth accrue to whoever owns the robots." http://krugman.blogs.nytimes.com/2012/12/26/is-growth-over/ http://krugman.blogs.nytimes.com/2012/12/26/is-growth-over/
    - olefoo 14y ago
      Not necessarily, you could end up with a sort of Walmart Feudalism, where basic material goods and essential services are low-priced enough that you can afford them on the little that is accorded to you from the generosity of the aristocracy.
    - eli_gottlieb 14y ago
      The problem is that opening a furniture factory or expanding a grocery chain were far more commonsense propositions than starting a social-media company, pitching a new videogame idea on Kickstarter, on even just opening a trendy bubble-tea cafe. As the business serves a need further up Maslow's Hierarchy of Needs, it becomes riskier, both due to possible disruptions further down the pyramid (larger, higher-priority line-items of the household budget) and also due to increased variability of consumer preferences. Or, on the other hand, the creative economy could turn into a huge engine of bespoke design and manufacturing, so that real people start to own mostly customized items. I can definitely see Etsy, crowdfunding, and merchandising sites heading this way. I guess "we are all My Little Pony dolls now".
      - zanny 14y ago
        My mother is currently unemployed after Wells Fargo went on a shutdown spree of old Wachovia locations, and spends her time knitting and sewing. I told her she should seriously consider making custom pony plushes full time because they sell at such an absurd scarcity markup. I've heard of them selling for over a thousand dollars for $10 worth of materials and 4 hours of time.
        eli_gottlieb 14y ago
        Similar things happened with Pokemon dolls in the '90s, but I think it's a bit more "intense" this time because the buyer demographic includes a lot more teens and 20-somethings with actual disposable income. But rather than toy fads, I was more referring to how each character or doll has accessories paired to them and only them. So rather than buying 2 dolls and 5 generic dresses and swapping pieces between the dolls, they're now selling 6 dolls with 6 dresses, plus more stupid little accessories and such. My hypothesis was that as manufacturing of consumer goods gets cheaper and processes get better, real people are going to stop consuming mass-manufactured goods entirely and start to become more like the dolls. Instead of my buying clothes at a department store (for instance), and thus wearing much the same stuff as my friends, family and coworkers, it will start to become economical for me to go to a neo-clothier and purchase items specifically measured, designed, cut, manufactured and adjusted for me. Quality and uniqueness start to become emphasized in consumer goods over mass-production quantities. Basically, "The Diamond Age". As people say, "the future is here, it's just unevenly distributed."
- mjolk 14y ago
  Don't confuse a reduced number of jobs that can be replaced by machines or algorithms with total capacity or demand for human labor.
  - dgunn 14y ago
    I'm not sure anyone would confuse those things. I just think eventually, employable people will be greater than the number of jobs to perform. In a world where you've always received money, food, etc as a result of your contributions, how do you get these things without a means of contributing?
    - groby_b 14y ago
      Well, we've been there before - more people than needed to do all the work available. As a result, we instituted the idea of servants. So get used to a future where you either have a personal entourage, or will be busy doing errands for people who actually have money. And chances are much higher for the latter.
- LDale 14y ago
  A guy named Peter Frase considered this question in Jacobin magazine a while back (link below). His answer pivots around resources availability and social construction. Based on these constructs he developed "Four Futures" as follows: -Egalitarianism and abundance: communism -Hierarchy and abundance: rentism -Egalitarianism and scarcity: socialism -Hierarchy and scarcity: exterminism Frase definitely swings from one side of the fence, so it may not be your kind of thing - but it's one take on the idea. http://jacobinmag.com/2011/12/four-futures/ http://jacobinmag.com/2011/12/four-futures/
akiselev 14y ago
"For more than three decades, technology has reduced the number of jobs in manufacturing. Robots and other machines controlled by computer programs work faster and make fewer mistakes than humans" Worst of all, we haven't even seen the robotics revolution yet. In the past, automated assembly lines, manufacturing plants, etc. were the realm of extremely large companies with volumes in the hundreds of millions and billions of dollars. Now, with embedded development becoming more and more accessible and interfaces becoming an important part of software, that automation will become cheaper and cheaper. Pretty soon we'll be able to use off the shelf hardware with Python and OpenCV to program complicated assembly lines and manufacturing pipelines (which we can to some extent already).
colmvp 14y ago
Tech kills but also creates. It's up to the people to decide whether they want to adapt to that environment or lament the old.
- ScottWhigham 14y ago
  Upvoted b/c it's ridiculous that someone downvoted you.
- confluence 14y ago
  That only works so long as machines have sub human intelligence. If you get comparable intelligence - well then you're fucked if you do and fucked if you don't.
- Afforess 14y ago
  From the article: >Overall, though, technology is eliminating far more jobs than it is creating. I agree, Technology has and is a great innovator and has created a lot of jobs. But when you begin reducing the number of low-effort jobs, what do you do with the people that used to be employed? It's a fact of averages that 50% of people are below the 100 IQ line - it seems that the new world economy has no place for them.
  - AnthonyMouse 14y ago
    >It's a fact of averages that 50% of people are below the 100 IQ line - it seems that the new world economy has no place for them. There is always work if you're willing to accept the pay. What we need to do is make sure that the benefits of automation go to reducing real consumer prices rather than corporate profits, so that the meager pay commanded by menial jobs is still enough to make a living. The problem is corporations don't want to accept what that means: We would have to heavily subsidize alternative energy to sustainably reduce energy costs, which would "harm" the oil industry. We would have to subsidize (more) the construction of housing, which would "harm" the housing market, also known as making housing more affordable. So they lobby against it. What has to happen is that profitable industries that make their profits from poor consumers have to be less profitable, so that the poor can keep more of their money. That's pretty much what it comes down to.
confluence 14y ago
You know what I find funny? Those who argue against income redistribution - aka socialism - are probably going to be some of the first people to become permanently unemployed. If you understand what's about to happen - you'll quickly realise that everyone will be out of a job and unless we keep people consuming - things start to get scary - like revolution scary. We're all socialists now.
- jbooth 14y ago
  Yeah, I don't have a solution to the situation, but when you look at the topline profits (going up), and employment (going down) at almost every corporation.. the rhetoric about "job creators" is a bit much.
up_and_up 14y ago
So is it Man over machine or machine over Man? Seem like the real issue lies in the trend toward optimization in every part of the economy, from the small business owner to large corporations etc. Case in point, I worked for a startup in 2008 that had a FT sysadmin and actual rack servers/real hardware etc. Same guys started a new company in 2012, minus a sysadmin and hardware. The ease/price of EC2 just makes too much sense. I saw that happening. One has to be careful to watch the trends and not be on the wrong side of history (like a sysadmin who is not open to cloud and devops at this point). But how are most non-tech savvy employees going to keep up with the times? Most likely they will be outmoded and seen as expendable. My question is how far will that go?
- up_and_up 14y ago
  Not sure why this was downvoted. Care to give feedback?
danso 14y ago
I think tech's overall optimization/automation effect is good/great for humans, but only if society adapts. In Star Trek's utopia, it's said that the limitless bounty created by tech has basically removed the need for currency and competing economies...but will that happen in reality? If it becomes technologically possible to cheaply produce robots that replaces nearly everyones' jobs...will society be able to say, "Awesome, let's all relax now!"? I can't imagine that we'll ever accept that, even if natural resources become nearly limitless.
- angdis 14y ago
  The ugly reality is that the effect of automation seems to be further stratifying the haves from the have-nots. By definition, automation makes things cheaper and more profitable by taking away jobs. If there aren't OTHER JOBS also created, we have a situation where the owners are systematically getting richer and the workers are systematically getting poorer.
  - joonix 14y ago
    Isn't that the end result of capitalism? To optimize returns on capital. It says nothing about labor or workers.
    - eli_gottlieb 14y ago
      Well yes, but there were previously variously reasons to either sincerely believe, or argue-against for ideological reasons, the notion that capitalism must impoverish everyone who isn't a capitalist. As it is, I think the Coming Model is going to have to be some extended form of Danish-style "Flexicurity": a market economy with the means of production under mixed control (nationalization of common assets but no seizing private wealth), near-complete market flexibility, but a system of social insurances and social dividends that share out some portion of the total wealth and prevent actual poverty and destitution for everyone. Then we'll see what people will actually create under such a model. It could well end up like the late '40s and the '50s-'60s: with a crisis resolved, demand is liberated, what had been financial wealth is converted into a real standard-of-living rise, and whole loads of new products and professions open up that can only exist because the working class is now secure and prosperous enough to support them.
polskibus 14y ago
Technology has always been killing jobs, however in the history of man there have always been room for long-term job growth. Otherwise we would not be where we are now. The article is fairly shallow in blaming only one thing for the recession and joblessness. Suddenly the massive debt is no longer a problem, the fact that there are lean manufacturing methods that can compete with mass production is overlooked, etc. The situation really is more complex than one or several journalists can hope to investigate by crunching several time series.
- akiselev 14y ago
  Classically, the new technology created a new class of work to operate/use it or decreased the cost of something so much that it was affordable for the middle class and required a lot more workers to handle the new demand. Now the middle class which benefited from new, cheaper, better products is shrinking with substantial (but by no means comprehensive) evidence that job growth as we've known it in the last hundred years isn't coming back. Even in software development, there may only be limited growth due to its open and exponential nature. As more developers work on software, the more tools will be developed to make their work more productive and efficient. It's a self reinforcing feedback loop that might have an equilibrium that won't be sufficient to account for all of the jobs lost as a result of software. American manufacturing, for example, is still one of the biggest sub-economies in the world and is insanely productive compared to Chinese manufacturers per person, but it doesn't create anywhere near as many jobs as we have lost overseas. At the same time, manufacturers in industries like medical, aero, and defense are complaining that they can't get the skilled workers they need to grow and as a result are forced to invest way more into automation. It's very likely that I just can't look at this period of human development without heavy bias but it seems to me that the ridiculously easy flow of information allowed by the internet has destabilized the equilibrium we've had with creative destruction and job growth.
  - eli_gottlieb 14y ago
    Classically, the new technology created a new class of work to operate/use it or decreased the cost of something so much that it was affordable for the middle class and required a lot more workers to handle the new demand. So let's ask, then: what does the middle class lack today that an increase in production efficiency could make widely available?
notmarxist 14y ago
The idea that labor is something which can be traded for income is a myth.
RyanZAG 14y ago
This has been a trend over all of human history. Going to keep it brief and technically incorrect to paint a picture... Initially, everyone was required to either hunt or gather food (probably). After a bit, humanity settled down into farming, and fewer people were required to keep everybody fed. This allowed for more time for childbirth. Better understanding of agriculture led to the creation of larger towns with specialized jobs such as blacksmiths and stables which led to farm animals helping to improve yields even further. To create the tools, some people had to go into mining jobs. The pattern here is that advancement allows fewer people in each economic area to provide the same benefits, freeing up labor for new economic areas. So clearly, the modern move to automate jobs isn't necessarily anything new. People are now free to move into creating accounting software instead of manually filling out journals. The problem occurs when the people freed up from advances do not have any new work to move into. The result may simply be de-urbanization - people moving back into the countryside to grow their own food. Most people can afford to buy a small plot of land in the middle of nowhere (small piece of land in the middle of Africa is practically free). Or the result may be socialism. Or the result may be new economic sectors being revealed by innovation. Fortune telling won't get us very far.
- georgemcbay 14y ago
  As the original article alludes to the big difference now is that the rate of advance is increasing. When whole industries are being upended within a few years and this turnover is getting faster all the time, it is difficult to point to "retraining" (the historical fix for this) as a solution. Most people just aren't that intellectually flexible. Those that are will prosper, the vast majority will, I think, be screwed. I'd love to see some sign that the US Government is starting to take this issue seriously and planning for it. While we're still years away from this becoming a critical social problem, I do believe that the brunt of the impact from this trend is inevitable and not too far off (certainly within my lifetime and I'm pretty old now). I'm personally very much in favor of a hybrid socialist system where everyone gets a guaranteed minimum income but people who are able and willing to can still work to earn more. I think this helps in a number of ways, the first being avoiding societal collapse and possible revolution due to the massive amount of unemployed there will be relative to the current population and secondarily, it gives even driven people a buffer to live on while chasing their dreams. I think the end result would actually be more positive for humanity than the current system, though for obvious reasons it will not be supported by the capital gatekeepers who currently wield the money (and thus the power). I find the idea that any degree of socialism will result in no progress is pretty insulting towards humanity. There will always be people who are driven (whether it be by ego or curiosity or whatever) to do great things.
dkasper 14y ago
"I have never seen a period where computers demonstrated as many skills and abilities as they have over the past seven years." - Andrew McAfee principal research scientist at the Center for Digital Business of MIT. Seriously?
- danilocampos 14y ago
  What's wrong with that? The last seven years contain the rise of modern mobile. Lots of new stuff has come out of that.
expralitemonk 14y ago
In 1890, 43% of the US population were farmers. Because of technology (fossil fuels, internal combustion engines), most of those jobs are gone for good. We're going through a massive change and some people's livelihoods will go away permanently. They're not entitled to make a living at an obsolete job, but I think we owe it to them to provide a comprehensive safety net so they can survive and retrain.
greghinch 14y ago
This seems like an inevitable outcome of everything that "we" (the startup and tech communities) are doing. Nearly every startup business I've seen on HN is about an optimization of an existing industry. Almost invariably, optimization means cutting people out of the loop, as people are quite slow at a lot of the tasks computers are suited for. The problem is of course the growing disparity between pay. As the existing middle is eliminated, the majority of people are trending towards the lower segment of pay (the 29/2/~70 ratio mentioned). Ideally we'd find a way to elevate a large portion of those in the lower 70% area to higher paying jobs. I think the reality is, many of those people probably will never be suited for jobs in the $100k+ range. The only solution I can see being viable is further socialization (in the US) of things like medical care, transportation, etc. in order to ensure that just because you don't have a high salary, doesn't mean you can't have a high quality of life. Either that or accept that the US is devolving into a 3rd world country. Bring on the "socialist" flames.
- kyllo 14y ago
  All repetitive labor will eventually be automated. It is only a matter of time. The problem with capitalism and tech is that the efficiency gains realized through automation nearly all go to the owners of the firms. The human laborers replaced by programs and robots are just S.O.L. Capitalism only works for a society as long as capital owners need human labor to carry out production. "The only solution I can see being viable is further socialization (in the US) of things like medical care, transportation, etc. in order to ensure that just because you don't have a high salary, doesn't mean you can't have a high quality of life. Either that or accept that the US is devolving into a 3rd world country." Yes. Either we implement basic income and universal healthcare, and improve access to public services, or we will end up with a tiny, but very wealthy "owner" class, and a very large, unemployed, impoverished majority. Better to do it soon, while it's still a choice, rather than later, when it isn't. History has shown that the masses will only put up with so much inequality before they openly revolt. An opposing force to this, though, is that increased automation will continue to reduce costs and barriers to entry, allowing people with almost no resources to start some form of income-generating online "lifestyle business." A lot of people are doing this now, but not nearly enough people are capable of it, for it to be a sustainable career option for almost the entire American middle class. Yet.
dimitar 14y ago
Its mainly recession, in good times productivity growth means more, not less jobs.
Permit 14y ago
They cited Andrew McAfee in the article, but I believe he's come to a different conclusion than the authors of this article did. He gave an excellent talk called "Are droids taking out jobs?" http://www.ted.com/talks/andrew_mcafee_are_droids_taking_our_jobs.html http://www.ted.com/talks/andrew_mcafee_are_droids_taking_our...
DirtyCalvinist 14y ago
This phenomenon is called pauperization. Many countries in Europe experienced it acutely during the early 19th century. People were allowed to starve back then until production shifted to take advantage of the surplus labor. And though people in developed countries are unlikely to starve this time around, the real challenge for us is figuring out how to allow the change to continue (because we will all be better off for it) without destroying people's dignity and/or creating an economically futile and dependent underclass.
rthomas6 14y ago
Speaking from an economics viewpoint, new technology kills jobs temporarily. Eliminating/automating jobs is obviously a good thing over the long term: how often do we lament the cotton gin because of how much cotton harvesting labor it eliminated? Over the short term, it caused job loss for many cotton harvesters, and a concentration of wealth for cotton gin owners. But over the long term, it caused the cotton industry to boom, and created a higher standard of living for everyone. It just took time for the market to reach a new, higher equilibrium. The same thing is happening today with technology, albeit at a much faster pace. So the real issue is not permanent job loss, but rather how do we take care of people as industry reinvents itself? The pace of this reinvention is accelerating, and has been accelerating for hundreds of years. In the near future, 20 years could result in a completely new job skills need. In fact, compare 1993 to 2013. Entire industries have sprung up while others died since then. Yet we do not lament the advent of the omnipresent internet because of the lost jobs in the newspaper, movie, music, and publishing industries. At least, not most of us. The same thing is simply happening today. Jobs will continue to exist. Just not right away. The real problem is only the short term: figuring out what to do when people get optimized out of some obsolete industry. There are many answers, we just have to think about it. Socialism is an answer proposed by many people. I think I agree with them to some degree. Some kind of economic floor below which no person can descend. I don't know how this could be created, but I would argue that the "economic floor" has been steadily rising for hundreds of years. In the US, even poverty currently results in a significantly higher standard of living compared to the median income life in 1850.
shakeel_mohamed 14y ago
Alright guys, let's save the economy! This was the perfect amount of motivation for me.
russell 14y ago
The western democracies are in a position to be in a post scarcity world if we choose to be. There is no reason that everyone cannot have the basics of food, shelter, health, and security. We also do not need perpetual 20% unemployment. One important dividend could be increased leisure time. We went from 60 hour workweeks to 40 hours, so why not 30 hour workweeks or 6 weeks of vacation per year. We are mot yet at the point where we can automate tasks that require mobility and some level of skill, such as a UPS delivery person. I think we are also at the point where we as individuals dont need a barrage of new physical things every year. We can still make significant progress with new virtual products and more efficient and durable physical goods.
johngalt 14y ago
Technology creates middle-class jobs and wealth by enabling the less skilled to perform tasks they were previously unsuited for. Where did all those factory jobs come from in the first place? The entire idea of assembly line manufacturing was to replace skilled artisans with unskilled repetition. Technology today is no different. The only issue most 'developed countries' have is that it's lifting millions out of poverty worldwide rather than paying union members $70/hr to tighten bolts.

43 points by dgunn 14y ago

dgunn 14y ago

This makes me wonder what a world without jobs will look like. Will a good quality life, food, shelter, money, etc just be human rights?

joshAg 14y ago
It'd probably looks quite a bit like pure communism.
- zanny 14y ago
  Which means we are going to destroy ourselves before admitting we don't need people without drive or motivation in creative pursuits working menial tasks. I imagine when we get there, we are going to have an absurd concentration of wealth as the automated means of production are in the hands of very few ultra-wealthy, and everyone else is destitute because their factories and robots make everything for effectively free. That sounds like bloody revolution.
  - busyant 14y ago
    Krugman says precisely what you have said: "Ah, you ask, but what about the people? Very good question. Smart machines may make higher GDP possible, but also reduce the demand for people — including smart people. So we could be looking at a society that grows ever richer, but in which all the gains in wealth accrue to whoever owns the robots." http://krugman.blogs.nytimes.com/2012/12/26/is-growth-over/ http://krugman.blogs.nytimes.com/2012/12/26/is-growth-over/
  - olefoo 14y ago
    Not necessarily, you could end up with a sort of Walmart Feudalism, where basic material goods and essential services are low-priced enough that you can afford them on the little that is accorded to you from the generosity of the aristocracy.
  - eli_gottlieb 14y ago
    The problem is that opening a furniture factory or expanding a grocery chain were far more commonsense propositions than starting a social-media company, pitching a new videogame idea on Kickstarter, on even just opening a trendy bubble-tea cafe. As the business serves a need further up Maslow's Hierarchy of Needs, it becomes riskier, both due to possible disruptions further down the pyramid (larger, higher-priority line-items of the household budget) and also due to increased variability of consumer preferences. Or, on the other hand, the creative economy could turn into a huge engine of bespoke design and manufacturing, so that real people start to own mostly customized items. I can definitely see Etsy, crowdfunding, and merchandising sites heading this way. I guess "we are all My Little Pony dolls now".
    - zanny 14y ago
      My mother is currently unemployed after Wells Fargo went on a shutdown spree of old Wachovia locations, and spends her time knitting and sewing. I told her she should seriously consider making custom pony plushes full time because they sell at such an absurd scarcity markup. I've heard of them selling for over a thousand dollars for $10 worth of materials and 4 hours of time.
      - eli_gottlieb 14y ago
        Similar things happened with Pokemon dolls in the '90s, but I think it's a bit more "intense" this time because the buyer demographic includes a lot more teens and 20-somethings with actual disposable income. But rather than toy fads, I was more referring to how each character or doll has accessories paired to them and only them. So rather than buying 2 dolls and 5 generic dresses and swapping pieces between the dolls, they're now selling 6 dolls with 6 dresses, plus more stupid little accessories and such. My hypothesis was that as manufacturing of consumer goods gets cheaper and processes get better, real people are going to stop consuming mass-manufactured goods entirely and start to become more like the dolls. Instead of my buying clothes at a department store (for instance), and thus wearing much the same stuff as my friends, family and coworkers, it will start to become economical for me to go to a neo-clothier and purchase items specifically measured, designed, cut, manufactured and adjusted for me. Quality and uniqueness start to become emphasized in consumer goods over mass-production quantities. Basically, "The Diamond Age". As people say, "the future is here, it's just unevenly distributed."
mjolk 14y ago
Don't confuse a reduced number of jobs that can be replaced by machines or algorithms with total capacity or demand for human labor.
- dgunn 14y ago
  I'm not sure anyone would confuse those things. I just think eventually, employable people will be greater than the number of jobs to perform. In a world where you've always received money, food, etc as a result of your contributions, how do you get these things without a means of contributing?
  - groby_b 14y ago
    Well, we've been there before - more people than needed to do all the work available. As a result, we instituted the idea of servants. So get used to a future where you either have a personal entourage, or will be busy doing errands for people who actually have money. And chances are much higher for the latter.
LDale 14y ago
A guy named Peter Frase considered this question in Jacobin magazine a while back (link below). His answer pivots around resources availability and social construction. Based on these constructs he developed "Four Futures" as follows: -Egalitarianism and abundance: communism -Hierarchy and abundance: rentism -Egalitarianism and scarcity: socialism -Hierarchy and scarcity: exterminism Frase definitely swings from one side of the fence, so it may not be your kind of thing - but it's one take on the idea. http://jacobinmag.com/2011/12/four-futures/ http://jacobinmag.com/2011/12/four-futures/

akiselev 14y ago

"For more than three decades, technology has reduced the number of jobs in manufacturing. Robots and other machines controlled by computer programs work faster and make fewer mistakes than humans" Worst of all, we haven't even seen the robotics revolution yet. In the past, automated assembly lines, manufacturing plants, etc. were the realm of extremely large companies with volumes in the hundreds of millions and billions of dollars. Now, with embedded development becoming more and more accessible and interfaces becoming an important part of software, that automation will become cheaper and cheaper. Pretty soon we'll be able to use off the shelf hardware with Python and OpenCV to program complicated assembly lines and manufacturing pipelines (which we can to some extent already).

colmvp 14y ago

Tech kills but also creates. It's up to the people to decide whether they want to adapt to that environment or lament the old.

ScottWhigham 14y ago
Upvoted b/c it's ridiculous that someone downvoted you.
confluence 14y ago
That only works so long as machines have sub human intelligence. If you get comparable intelligence - well then you're fucked if you do and fucked if you don't.
Afforess 14y ago
From the article: >Overall, though, technology is eliminating far more jobs than it is creating. I agree, Technology has and is a great innovator and has created a lot of jobs. But when you begin reducing the number of low-effort jobs, what do you do with the people that used to be employed? It's a fact of averages that 50% of people are below the 100 IQ line - it seems that the new world economy has no place for them.
- AnthonyMouse 14y ago
  >It's a fact of averages that 50% of people are below the 100 IQ line - it seems that the new world economy has no place for them. There is always work if you're willing to accept the pay. What we need to do is make sure that the benefits of automation go to reducing real consumer prices rather than corporate profits, so that the meager pay commanded by menial jobs is still enough to make a living. The problem is corporations don't want to accept what that means: We would have to heavily subsidize alternative energy to sustainably reduce energy costs, which would "harm" the oil industry. We would have to subsidize (more) the construction of housing, which would "harm" the housing market, also known as making housing more affordable. So they lobby against it. What has to happen is that profitable industries that make their profits from poor consumers have to be less profitable, so that the poor can keep more of their money. That's pretty much what it comes down to.

confluence 14y ago

You know what I find funny? Those who argue against income redistribution - aka socialism - are probably going to be some of the first people to become permanently unemployed. If you understand what's about to happen - you'll quickly realise that everyone will be out of a job and unless we keep people consuming - things start to get scary - like revolution scary. We're all socialists now.

jbooth 14y ago
Yeah, I don't have a solution to the situation, but when you look at the topline profits (going up), and employment (going down) at almost every corporation.. the rhetoric about "job creators" is a bit much.

up_and_up 14y ago

So is it Man over machine or machine over Man? Seem like the real issue lies in the trend toward optimization in every part of the economy, from the small business owner to large corporations etc. Case in point, I worked for a startup in 2008 that had a FT sysadmin and actual rack servers/real hardware etc. Same guys started a new company in 2012, minus a sysadmin and hardware. The ease/price of EC2 just makes too much sense. I saw that happening. One has to be careful to watch the trends and not be on the wrong side of history (like a sysadmin who is not open to cloud and devops at this point). But how are most non-tech savvy employees going to keep up with the times? Most likely they will be outmoded and seen as expendable. My question is how far will that go?

up_and_up 14y ago
Not sure why this was downvoted. Care to give feedback?

danso 14y ago

I think tech's overall optimization/automation effect is good/great for humans, but only if society adapts. In Star Trek's utopia, it's said that the limitless bounty created by tech has basically removed the need for currency and competing economies...but will that happen in reality? If it becomes technologically possible to cheaply produce robots that replaces nearly everyones' jobs...will society be able to say, "Awesome, let's all relax now!"? I can't imagine that we'll ever accept that, even if natural resources become nearly limitless.

angdis 14y ago
The ugly reality is that the effect of automation seems to be further stratifying the haves from the have-nots. By definition, automation makes things cheaper and more profitable by taking away jobs. If there aren't OTHER JOBS also created, we have a situation where the owners are systematically getting richer and the workers are systematically getting poorer.
- joonix 14y ago
  Isn't that the end result of capitalism? To optimize returns on capital. It says nothing about labor or workers.
  - eli_gottlieb 14y ago
    Well yes, but there were previously variously reasons to either sincerely believe, or argue-against for ideological reasons, the notion that capitalism must impoverish everyone who isn't a capitalist. As it is, I think the Coming Model is going to have to be some extended form of Danish-style "Flexicurity": a market economy with the means of production under mixed control (nationalization of common assets but no seizing private wealth), near-complete market flexibility, but a system of social insurances and social dividends that share out some portion of the total wealth and prevent actual poverty and destitution for everyone. Then we'll see what people will actually create under such a model. It could well end up like the late '40s and the '50s-'60s: with a crisis resolved, demand is liberated, what had been financial wealth is converted into a real standard-of-living rise, and whole loads of new products and professions open up that can only exist because the working class is now secure and prosperous enough to support them.

polskibus 14y ago

Technology has always been killing jobs, however in the history of man there have always been room for long-term job growth. Otherwise we would not be where we are now. The article is fairly shallow in blaming only one thing for the recession and joblessness. Suddenly the massive debt is no longer a problem, the fact that there are lean manufacturing methods that can compete with mass production is overlooked, etc. The situation really is more complex than one or several journalists can hope to investigate by crunching several time series.

akiselev 14y ago
Classically, the new technology created a new class of work to operate/use it or decreased the cost of something so much that it was affordable for the middle class and required a lot more workers to handle the new demand. Now the middle class which benefited from new, cheaper, better products is shrinking with substantial (but by no means comprehensive) evidence that job growth as we've known it in the last hundred years isn't coming back. Even in software development, there may only be limited growth due to its open and exponential nature. As more developers work on software, the more tools will be developed to make their work more productive and efficient. It's a self reinforcing feedback loop that might have an equilibrium that won't be sufficient to account for all of the jobs lost as a result of software. American manufacturing, for example, is still one of the biggest sub-economies in the world and is insanely productive compared to Chinese manufacturers per person, but it doesn't create anywhere near as many jobs as we have lost overseas. At the same time, manufacturers in industries like medical, aero, and defense are complaining that they can't get the skilled workers they need to grow and as a result are forced to invest way more into automation. It's very likely that I just can't look at this period of human development without heavy bias but it seems to me that the ridiculously easy flow of information allowed by the internet has destabilized the equilibrium we've had with creative destruction and job growth.
- eli_gottlieb 14y ago
  Classically, the new technology created a new class of work to operate/use it or decreased the cost of something so much that it was affordable for the middle class and required a lot more workers to handle the new demand. So let's ask, then: what does the middle class lack today that an increase in production efficiency could make widely available?

notmarxist 14y ago

The idea that labor is something which can be traded for income is a myth.

RyanZAG 14y ago

This has been a trend over all of human history. Going to keep it brief and technically incorrect to paint a picture... Initially, everyone was required to either hunt or gather food (probably). After a bit, humanity settled down into farming, and fewer people were required to keep everybody fed. This allowed for more time for childbirth. Better understanding of agriculture led to the creation of larger towns with specialized jobs such as blacksmiths and stables which led to farm animals helping to improve yields even further. To create the tools, some people had to go into mining jobs. The pattern here is that advancement allows fewer people in each economic area to provide the same benefits, freeing up labor for new economic areas. So clearly, the modern move to automate jobs isn't necessarily anything new. People are now free to move into creating accounting software instead of manually filling out journals. The problem occurs when the people freed up from advances do not have any new work to move into. The result may simply be de-urbanization - people moving back into the countryside to grow their own food. Most people can afford to buy a small plot of land in the middle of nowhere (small piece of land in the middle of Africa is practically free). Or the result may be socialism. Or the result may be new economic sectors being revealed by innovation. Fortune telling won't get us very far.

georgemcbay 14y ago
As the original article alludes to the big difference now is that the rate of advance is increasing. When whole industries are being upended within a few years and this turnover is getting faster all the time, it is difficult to point to "retraining" (the historical fix for this) as a solution. Most people just aren't that intellectually flexible. Those that are will prosper, the vast majority will, I think, be screwed. I'd love to see some sign that the US Government is starting to take this issue seriously and planning for it. While we're still years away from this becoming a critical social problem, I do believe that the brunt of the impact from this trend is inevitable and not too far off (certainly within my lifetime and I'm pretty old now). I'm personally very much in favor of a hybrid socialist system where everyone gets a guaranteed minimum income but people who are able and willing to can still work to earn more. I think this helps in a number of ways, the first being avoiding societal collapse and possible revolution due to the massive amount of unemployed there will be relative to the current population and secondarily, it gives even driven people a buffer to live on while chasing their dreams. I think the end result would actually be more positive for humanity than the current system, though for obvious reasons it will not be supported by the capital gatekeepers who currently wield the money (and thus the power). I find the idea that any degree of socialism will result in no progress is pretty insulting towards humanity. There will always be people who are driven (whether it be by ego or curiosity or whatever) to do great things.

dkasper 14y ago

"I have never seen a period where computers demonstrated as many skills and abilities as they have over the past seven years." - Andrew McAfee principal research scientist at the Center for Digital Business of MIT. Seriously?

danilocampos 14y ago
What's wrong with that? The last seven years contain the rise of modern mobile. Lots of new stuff has come out of that.

expralitemonk 14y ago

In 1890, 43% of the US population were farmers. Because of technology (fossil fuels, internal combustion engines), most of those jobs are gone for good. We're going through a massive change and some people's livelihoods will go away permanently. They're not entitled to make a living at an obsolete job, but I think we owe it to them to provide a comprehensive safety net so they can survive and retrain.

greghinch 14y ago

This seems like an inevitable outcome of everything that "we" (the startup and tech communities) are doing. Nearly every startup business I've seen on HN is about an optimization of an existing industry. Almost invariably, optimization means cutting people out of the loop, as people are quite slow at a lot of the tasks computers are suited for. The problem is of course the growing disparity between pay. As the existing middle is eliminated, the majority of people are trending towards the lower segment of pay (the 29/2/~70 ratio mentioned). Ideally we'd find a way to elevate a large portion of those in the lower 70% area to higher paying jobs. I think the reality is, many of those people probably will never be suited for jobs in the $100k+ range. The only solution I can see being viable is further socialization (in the US) of things like medical care, transportation, etc. in order to ensure that just because you don't have a high salary, doesn't mean you can't have a high quality of life. Either that or accept that the US is devolving into a 3rd world country. Bring on the "socialist" flames.

kyllo 14y ago
All repetitive labor will eventually be automated. It is only a matter of time. The problem with capitalism and tech is that the efficiency gains realized through automation nearly all go to the owners of the firms. The human laborers replaced by programs and robots are just S.O.L. Capitalism only works for a society as long as capital owners need human labor to carry out production. "The only solution I can see being viable is further socialization (in the US) of things like medical care, transportation, etc. in order to ensure that just because you don't have a high salary, doesn't mean you can't have a high quality of life. Either that or accept that the US is devolving into a 3rd world country." Yes. Either we implement basic income and universal healthcare, and improve access to public services, or we will end up with a tiny, but very wealthy "owner" class, and a very large, unemployed, impoverished majority. Better to do it soon, while it's still a choice, rather than later, when it isn't. History has shown that the masses will only put up with so much inequality before they openly revolt. An opposing force to this, though, is that increased automation will continue to reduce costs and barriers to entry, allowing people with almost no resources to start some form of income-generating online "lifestyle business." A lot of people are doing this now, but not nearly enough people are capable of it, for it to be a sustainable career option for almost the entire American middle class. Yet.

dimitar 14y ago

Its mainly recession, in good times productivity growth means more, not less jobs.

Permit 14y ago

They cited Andrew McAfee in the article, but I believe he's come to a different conclusion than the authors of this article did. He gave an excellent talk called "Are droids taking out jobs?" http://www.ted.com/talks/andrew_mcafee_are_droids_taking_our_jobs.html http://www.ted.com/talks/andrew_mcafee_are_droids_taking_our...

DirtyCalvinist 14y ago

This phenomenon is called pauperization. Many countries in Europe experienced it acutely during the early 19th century. People were allowed to starve back then until production shifted to take advantage of the surplus labor. And though people in developed countries are unlikely to starve this time around, the real challenge for us is figuring out how to allow the change to continue (because we will all be better off for it) without destroying people's dignity and/or creating an economically futile and dependent underclass.

rthomas6 14y ago

Speaking from an economics viewpoint, new technology kills jobs temporarily. Eliminating/automating jobs is obviously a good thing over the long term: how often do we lament the cotton gin because of how much cotton harvesting labor it eliminated? Over the short term, it caused job loss for many cotton harvesters, and a concentration of wealth for cotton gin owners. But over the long term, it caused the cotton industry to boom, and created a higher standard of living for everyone. It just took time for the market to reach a new, higher equilibrium. The same thing is happening today with technology, albeit at a much faster pace. So the real issue is not permanent job loss, but rather how do we take care of people as industry reinvents itself? The pace of this reinvention is accelerating, and has been accelerating for hundreds of years. In the near future, 20 years could result in a completely new job skills need. In fact, compare 1993 to 2013. Entire industries have sprung up while others died since then. Yet we do not lament the advent of the omnipresent internet because of the lost jobs in the newspaper, movie, music, and publishing industries. At least, not most of us. The same thing is simply happening today. Jobs will continue to exist. Just not right away. The real problem is only the short term: figuring out what to do when people get optimized out of some obsolete industry. There are many answers, we just have to think about it. Socialism is an answer proposed by many people. I think I agree with them to some degree. Some kind of economic floor below which no person can descend. I don't know how this could be created, but I would argue that the "economic floor" has been steadily rising for hundreds of years. In the US, even poverty currently results in a significantly higher standard of living compared to the median income life in 1850.

shakeel_mohamed 14y ago

Alright guys, let's save the economy! This was the perfect amount of motivation for me.

russell 14y ago

The western democracies are in a position to be in a post scarcity world if we choose to be. There is no reason that everyone cannot have the basics of food, shelter, health, and security. We also do not need perpetual 20% unemployment. One important dividend could be increased leisure time. We went from 60 hour workweeks to 40 hours, so why not 30 hour workweeks or 6 weeks of vacation per year. We are mot yet at the point where we can automate tasks that require mobility and some level of skill, such as a UPS delivery person. I think we are also at the point where we as individuals dont need a barrage of new physical things every year. We can still make significant progress with new virtual products and more efficient and durable physical goods.

johngalt 14y ago

Technology creates middle-class jobs and wealth by enabling the less skilled to perform tasks they were previously unsuited for. Where did all those factory jobs come from in the first place? The entire idea of assembly line manufacturing was to replace skilled artisans with unskilled repetition. Technology today is no different. The only issue most 'developed countries' have is that it's lifting millions out of poverty worldwide rather than paying union members $70/hr to tighten bolts.