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We’re not going to have a jobless recovery. We’re going to have a jobless future

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Re: We’re not going to have a jobless recovery. We’re going to have a jobless future

#101

Post by achompas »

Don’t fill potholes. That won’t fix the economy.

Uh, yes. Yes it will. The workers that fill those potholes will earn wages, which they can then use to pay for goods. By purchasing those goods, they pay other workers' wages, and the virtuous cycle continues.

Listen HN, I love your knowledge of technology and entrepreneurship. But the economics posts on here are deplorable. We've seen disruptive technologies many times before: the cotton gin, the television, steam power, the car. In every one of those instances, our work force has adapted and moved into new jobs.

The Internet is not some all-consuming monster; it cannot universally substitute for real goods; it will not replace jobs that need to happen in person.

Re: We’re not going to have a jobless recovery. We’re going to have a jobless future

#102

Post by btilly »

msluyter wrote: post #57
pg wrote: post #24

"Our new economy is shrinking because technology leads to efficiency over growth." Anyone who wants to make the claim that technology is net killing jobs has to be prepared to answer the question: why now? Technology has been killing (but not net killing) jobs for centuries. It's possible that technology could start to net kill jobs. But why now, when it hasn't in the past?

One answer, and I don't know if this is the right answer, is that unlike in previous revolutions, a new class of jobs has not been created to (fully) replace the jobs that are being displaced. In the industrial revolution, farmers could move to the city and get a job in the factory. In the (first) information revolution, factory workers could become telephone operators. But as Tyler Cowen notes in "The Great Stagnati…

In the industrial revolution, farmers could move to the city and get a job in the factory.

Not true. The Industrial Revolution was preceded (in England) by an Agricultural Revolution that displaced peasants in large numbers to cities where they didn't have nearly enough work. (Many emigrated to the New World.)

Thus the later economic boom was preceded by economic hard times.

Re: We’re not going to have a jobless recovery. We’re going to have a jobless future

#103

Post by josh33 »

gvb wrote: post #80
pg wrote: post #24

"Our new economy is shrinking because technology leads to efficiency over growth." Anyone who wants to make the claim that technology is net killing jobs has to be prepared to answer the question: why now? Technology has been killing (but not net killing) jobs for centuries. It's possible that technology could start to net kill jobs. But why now, when it hasn't in the past?

"Our new economy is shrinking because technology leads to efficiency over growth." I disagree with this premise. IMHO, it is much simpler: we as individuals lived beyond our means for 20+ years by borrowing money against our houses and against our personal word (e.g. credit cards). We as governments lived beyond our means in terms of direct spending as well future spending promises (e.g. promising retirement/pension/…

This is absolutely right. Average personal savings rates in India and China: 30% and 50% (and that's of their gross income). Average personal savings in the USofA: -2%. We've lived so far beyond our means that it had to catch up to us.

The real scare for me is the potential for another, larger bubble: the "Credit Bubble". A bubble exists when asset price inflation rises beyond what incomes can sustain. A bubble represents people abandoning reason and prudence for hope and greed. (http://www.chrismartenson.com/crashcourse/chapter-15-bubbles)

The Credit Bubble will pop when the sum total of all of our society's debt prices (read: interest) exceeds our ability to pay. Experts think this could happen anywhere between 2015 and 2020. When that pops, the housing bubble will look minuscule.

The prudent should prepare now. Buy food storage. Become self reliant. And get out of debt!

Re: We’re not going to have a jobless recovery. We’re going to have a jobless future

#104

Post by achompas »

sachinag wrote: post #81
achompas wrote: post #64

Earlier quoted context omitted.

IAAE, so I'll address this: jobs are not being "displaced" or permanently "eliminated" right now. There's a simple, plausible explanation for all of this: 1. Businesses are hesitant to invest in capital. 2. The housing market is terrible right now--especially housing starts. 3. Jobs related to #2 and #3 generally go to lower-skilled workers. They're the ones who are struggling right now (with something like 16% unemp…

It would improve faster if your bosses would engage in QE3 and started to inflate the economy. [Edit: that's an attack on the Board of Governors, certainly not you.]

Well, they're not my bosses anymore. I'm moving into software and applied stats now. :)

I'm torn about QE3. There's little evidence that businesses are waiting on it specifically to make capital expenditure decisions; it seems, from reading the Beige Book and other anecdotes that companies might be waiting for the other shoe to drop. QE3 would just adjust the shoe on the foot a bit.

Re: We’re not going to have a jobless recovery. We’re going to have a jobless future

#105

Post by hristov »

I disagree. Technology does not kill jobs in manufacturing or services. It does in farming.

But in manufacturing, and services more technology merely means that people get more stuff. People buy more clothes more gadgets, more of everything. Or if they buy the same amount of gadgets their gadgets are more complex, etc. Thus, when technology results in higher production it is usually matched with higher consumption.

There are two things that are killing jobs in the US right now: the export of jobs offshore, and poverty. The US economy is actually creating shitloads of jobs, the problem is that we are creating them in China. China is still doing monetary tightening to slow down its growth.

http://www.bbc.co.uk/news/business-14117778

The other thing is poverty. Since the new deal the US has usually had some kind of mechanism to ensure that the middle and lower middle class is relatively protected and relatively well off. This included unions, minimum wage legislation, and various government programs. Nowadays most of these things are being eroded. This means that people cannot buy more stuff, which means that there are fewer jobs, which means people buy even fewer stuff, which results in even fewer jobs, etc.

To determine whether technology is killing jobs, you can ask yourself the following hypothetical question: Does everybody in the world have every manufactured good or service they could possibly want? If the answer is true, then technology has killed all hope of future economic growth. But the answer is sooo far away from being true, that the question itself sounds ridiculous.

So no it is not technology. It is something else in the way our society is ordered and run that is doing it.

Re: We’re not going to have a jobless recovery. We’re going to have a jobless future

#106

Post by ellyagg »

Eliezer wrote: post #71
pg wrote: post #24

"Our new economy is shrinking because technology leads to efficiency over growth." Anyone who wants to make the claim that technology is net killing jobs has to be prepared to answer the question: why now? Technology has been killing (but not net killing) jobs for centuries. It's possible that technology could start to net kill jobs. But why now, when it hasn't in the past?

PG, what probability would you assign to the propositions "This time things are different" (empirically: the jobs won't come back 5 years from now) vs. "This time things are not different" (empirically: the jobs will come back 5 years from now)? Warning, if your probabilities are extreme enough, someone might want to bet you on it. Presuming things are different, I see five obvious answers to the original question (a…

I, too, thought that the job losses were permanent. Until there was an article posted here the other week with quotes in news outlets from several different eras since the industrial revolution claiming the same thing. Plenty of reasonable sounding explanations are offered elsewhere in this thread for why this time is different, but then lots of reasonable sounding explanations were offered in the past.

I'd say it's 95% that job losses aren't permanent, although I'm not sure 5 years is enough time to settle it. I'm perfectly willing to believe we could be in a recession/depression for the next 10-20 years. That has precedent in our and other economies. However, I'm not prepared to believe that--simply because I can't imagine what people will do--people won't end up doing something. Everyone likes to be productive, and humanity has a really efficient means of organizing labor to trade around everyone's productivity.

I am all for 95% or 100% unemployment, though, if such a fantastical reality can come to pass!

Re: We’re not going to have a jobless recovery. We’re going to have a jobless future

#107

Post by minikomi »

ivankirigin wrote: post #51
pg wrote: post #24

"Our new economy is shrinking because technology leads to efficiency over growth." Anyone who wants to make the claim that technology is net killing jobs has to be prepared to answer the question: why now? Technology has been killing (but not net killing) jobs for centuries. It's possible that technology could start to net kill jobs. But why now, when it hasn't in the past?

My answer would be that there is a time delay inherent to being human between wanting to do something and being skilled enough to do it. If humans were required to learn, say, programming in a week, they would completely fail. Learning an industrial job in more than a decade to transition away from farming is much easier. It could be that the skills needed to be employable are too difficult for people to learn in the…

I came here to post the same.. Which entry level tasks does the most recent wave of new technology require which may be performed by, say, a 45 year old factory worker of 25 years? How do you go about "spreading the load"?

Re: We’re not going to have a jobless recovery. We’re going to have a jobless future

#108

Post by locopati »

CamperBob wrote: post #58
dreamdu5t wrote: post #29

Earlier quoted context omitted.

While I agree with you, history also shows that unemployment and wealth disparity often do rise high enough to cause massive civil unrest. Yes, high unemployment isn't permanent or a long-term trend. That isn't really relevant though when you're talking about the prospect of blood in the streets prior to returning to decent levels. The US seems completely arrogant in the sense that they don't seem to think this can h…

I can't think of a single case where wealth disparity alone has been sufficient to cause civil unrest, massive or otherwise.

Does this count?

http://en.wikipedia.org/wiki/Causes_of_the_French_Revolution

Re: We’re not going to have a jobless recovery. We’re going to have a jobless future

#109

Post by reinhardt »

dreamdu5t wrote: post #68
jerf wrote: post #48

Earlier quoted context omitted.

"Public works DO create jobs, it's an empirical fact." No it's not. Sometimes it does, sometimes it doesn't. It's never that simple. Along with the obvious broken window fallacy problems, you have to look at how you are paying for that public work. Taxing a net two median-pay jobs out of existence to create a single public works median-pay job is destroying a job, not creating one.

The definition of "public works" is building things using State money. There is no way to build roads without hiring people. This is an empirical fact. Unless you know of some way to maintain or build streets without hiring people? Again, it is an empirical fact that public works create jobs. At least public works that require hiring people. It's not hard to understand. Work needing to be done creates jobs, whether t…

You clearly missed the GP's point and the reference to the broken window fallacy: http://lmgtfy.com/?q=broken+window

Re: We’re not going to have a jobless recovery. We’re going to have a jobless future

#110

Post by frankus »

georgieporgie wrote: post #30

"Don’t fill potholes. That won’t fix the economy." I'm not certain of the author's intent, but the one and only way that government can actually create jobs is to improve infrastructure. A better transportation network built today will have payoffs 20 years down the line. Unfortunately, it's hard to build a political career on such long-term goals. One of my favorite Planet Money episodes deals with this: http://www.…

Not only that, but with strongly negative real interest rates, it can borrow money to pay people to fill potholes today for less than it would cost to wait.

In fact, it's better than that:

- That calculation doesn't include the savings in reduced wear and lack of deferred maintenance. - Construction labor is now much cheaper than it would be at full employment. - Growing consumption now would more than pay for itself in taxes from an averted "lost decade."

Unfortunately the folks in Washington are still worried about 3% inflation and how interest rates are going to spike any day now. So we end up with spending cuts that will almost certainly worsen the deficit over a do-nothing approach.

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