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Am I the only one who thinks that we reached a point of nearly maximum efficiency? Think about it, that would explain everything. The article clearly states th

Am I the only one who thinks that we reached a point of nearly maximum efficiency? Think about it, that would explain everything. The article clearly states that employers aren't interested in college graduates that finished two years ago if they didn't gather experience in the meantime. They'll happily hire the new kids straight out of college. If they can afford to pass over to thousands of graduates then it means they're just not needed. Even the latest crop of graduates is having a hard time finding a job. As I see it, there's no shortage of graduates (STEM of otherwise), conversely, there's an oversupply of graduates. A while ago I read an article that claimed that lost jobs aren't coming back and this only means, again, that many jobs and (thus workers) are not needed anymore. We can do more (or the same) with less. College graduates are taking jobs once reserved to high school graduates and dropouts, thus pushing these last groups into the ranks of unemployment. What if the global economic recession was just what was needed to cut useless jobs and turn companies into nimble and extremely efficient machines?

rayiner 13y ago
It's not really efficiency, it's a lack of growth. Efficiency (producing more with each worker) doesn't itself reduce the demand for workers, because the economy usually just produces more in the aggregate to compensate. What's reducing the demand for workers is that it's just not attractive to expand within the U.S. If you've got some capital, you're going to get a much bigger return on that money in a less developed place like China or Brazil than you will here. There is just less competition and consumer expectations are lower.
- cliveowen 13y ago
  I would be with you if goods production somehow halted and we weren't able to get our hand on those very goods: less workers->less production->scarcity->unsatisfied demand->soaring prices that simply isn't happening. It seems to me that organizations that previously employed tens thousands of workers are now doing just fine with way less than that.
  - rayiner 13y ago
    I'm not saying that there aren't efficiency improvements happening. The economy is clearly producing as much as it did before with fewer workers. But efficiency improvements reduce production costs, which, in a competitive market, tends to be reflected as reduced prices. But when prices go down, quantity demanded goes up, so efficiency improvements tend to result in more overall production. I.e. the fact that companies need fewer workers per unit produced does not mean that they need fewer workers overall. We're not seeing that in the existing economy. Growth is non-existent, so companies are using efficiency improvements to cut workforces instead of using efficiency improvements to expand production while maintaining or growing the size of their workforces.
    - nostrademons 13y ago
      Part of this is because of wealth distribution, and part of it is because of a lack of imagination. When businesses use productivity enhancements to cut labor requirements without increasing price or output, then all the money saved by this accumulates to the business. That results in large cash surpluses, which we're seeing right now (Apple has $40B in cash and short-term investments). In order to capture and redistribute that cash, the rest of the population needs to produce products that appeal to the firms who have the cash - but there's relatively little of value that an individual or small business owner can supply to a giant company like Apple. In theory, cash is non-productive and so companies should have an incentive to re-invest this money into new products to make more cash. However, that requires that they see market opportunities that have a chance of succeeding. Since consumers have so little cash, that's a tough chore right now; the bar for a new consumer product that people will actually spend money on is quite high. And so companies never make the investments that generate employment that give people cash to spend on the products the companies are investing in. Catch-22. I think that the current seed-funding boom is a symptom of this. Cash piles up in the financial markets, some of it ends up with venture capitalists, they spray it across many little proof-of-concept ventures to figure out what the next big thing is. And ultimately this is a very good thing, because it's typically fear of irrelevancy that makes big companies spend money on investments anyway. It takes a long time to work its way out, though, because you can't just wave a magic wand and have a hit product.
- kaybe 13y ago
  How much more do you want to produce?
  - eru 13y ago
    Most people don't have everything they want, yet. So the answer is: more.
    - obstacle1 13y ago
      People have an infinite capacity for wanting, so towards infinite growth we go, I guess? Seems sustainable.
      - eru 13y ago
        Not all wants are wants of material goods.
  - cliveowen 13y ago
    I don't think there's more room for growth. Demand is met, there's no shortage, that's my whole point.
chantech 13y ago
We've reached a point where the limit of economic growth is no longer knowledge workers - it's entrepreneurs. After WW2, knowledge workers were the bottle neck, college degrees guaranteed jobs, and institutions, grants and MBA schools sprung up everywhere. The key for new grads is understanding the supply and demand curve. Your career prospects are better if 1. your skills are in short supply or 2. if they're in great demand or both. When there's a glut of talent and it's cheap, form companies.

rayiner 13y ago

It's not really efficiency, it's a lack of growth. Efficiency (producing more with each worker) doesn't itself reduce the demand for workers, because the economy usually just produces more in the aggregate to compensate. What's reducing the demand for workers is that it's just not attractive to expand within the U.S. If you've got some capital, you're going to get a much bigger return on that money in a less developed place like China or Brazil than you will here. There is just less competition and consumer expectations are lower.

cliveowen 13y ago
I would be with you if goods production somehow halted and we weren't able to get our hand on those very goods: less workers->less production->scarcity->unsatisfied demand->soaring prices that simply isn't happening. It seems to me that organizations that previously employed tens thousands of workers are now doing just fine with way less than that.
- rayiner 13y ago
  I'm not saying that there aren't efficiency improvements happening. The economy is clearly producing as much as it did before with fewer workers. But efficiency improvements reduce production costs, which, in a competitive market, tends to be reflected as reduced prices. But when prices go down, quantity demanded goes up, so efficiency improvements tend to result in more overall production. I.e. the fact that companies need fewer workers per unit produced does not mean that they need fewer workers overall. We're not seeing that in the existing economy. Growth is non-existent, so companies are using efficiency improvements to cut workforces instead of using efficiency improvements to expand production while maintaining or growing the size of their workforces.
  - nostrademons 13y ago
    Part of this is because of wealth distribution, and part of it is because of a lack of imagination. When businesses use productivity enhancements to cut labor requirements without increasing price or output, then all the money saved by this accumulates to the business. That results in large cash surpluses, which we're seeing right now (Apple has $40B in cash and short-term investments). In order to capture and redistribute that cash, the rest of the population needs to produce products that appeal to the firms who have the cash - but there's relatively little of value that an individual or small business owner can supply to a giant company like Apple. In theory, cash is non-productive and so companies should have an incentive to re-invest this money into new products to make more cash. However, that requires that they see market opportunities that have a chance of succeeding. Since consumers have so little cash, that's a tough chore right now; the bar for a new consumer product that people will actually spend money on is quite high. And so companies never make the investments that generate employment that give people cash to spend on the products the companies are investing in. Catch-22. I think that the current seed-funding boom is a symptom of this. Cash piles up in the financial markets, some of it ends up with venture capitalists, they spray it across many little proof-of-concept ventures to figure out what the next big thing is. And ultimately this is a very good thing, because it's typically fear of irrelevancy that makes big companies spend money on investments anyway. It takes a long time to work its way out, though, because you can't just wave a magic wand and have a hit product.
kaybe 13y ago
How much more do you want to produce?
- eru 13y ago
  Most people don't have everything they want, yet. So the answer is: more.
  - obstacle1 13y ago
    People have an infinite capacity for wanting, so towards infinite growth we go, I guess? Seems sustainable.
    - eru 13y ago
      Not all wants are wants of material goods.
- cliveowen 13y ago
  I don't think there's more room for growth. Demand is met, there's no shortage, that's my whole point.

chantech 13y ago

We've reached a point where the limit of economic growth is no longer knowledge workers - it's entrepreneurs. After WW2, knowledge workers were the bottle neck, college degrees guaranteed jobs, and institutions, grants and MBA schools sprung up everywhere. The key for new grads is understanding the supply and demand curve. Your career prospects are better if 1. your skills are in short supply or 2. if they're in great demand or both. When there's a glut of talent and it's cheap, form companies.