Permanent job loss

Virginia Postrel has a piece in the NYT Magazine A Prettier Jobs Picture? in which she suggests that the death of work is much exaggerated. The Bureau of Labor Statistics numbers are flawed, she says, because the hide all the new jobs (explosive growth in finishing granite countertops and giving manicures) within “boring” categories of factory work that are disappearing–either moving overseas or being eliminated via new efficiencies.

She’s right, of course. Those who manage to make the leap over to the rising ship of independence are doing fine, but the larger trend remains. In other words, it’s not a question of whether new jobs (or, rather, new categories of jobs) are being created. The issue is whether we can expect all of those who are displaced from factories to find satisfying employment, or whether instead these efficiencies in the global economy will lead to an even more radical division between the rich and poor in the US.

I was talking to one of the graduate students about this in reference to professionals, who until recently believed their position as creative elites to be unassailable. They thought it would be safe to ship off the boring, repetitive coding tasks to be done in Bangalore overnight, while retaining the creative process in the US. As Richard Florida points out, this sort of outsourcing was the nose of the camel. Call centers lead to accounting offices lead to other support systems and, inevitably where there is a concentration of skill, local entrepreneurs who can increasingly compete in a global market.

At the same time, it now takes much less to make much more. It’s not like this should be a shock to us. This is one of the hallmarks of the “information revolution” that Bell identified three decades ago. Agriculture used to employ most Americans. Now it employs two percent of the population (“pdf”:http://www.bls.gov/cps/cpsaat1.pdf), and much of the world criticizes the US and other Western countries for maintaining this level through subsidies and the like.

On one hand, despite the decline in agricultural jobs, followed by the loss of manufacturing jobs, unemployment in the US right now, in historical and global perspective, isn’t that bad. That is, the half of Americans working on the farm eventually found other work of some sort. The same can be said of those with manufacturing jobs. What jobs do they get? This becomes a bit more difficult: perhaps they become “knowledge workers” and perhaps they go to the service industry, depending on their skill set.

Is there an upper bound to the number of people who can work in service? Can’t we expect efficiencies there as well? Not all services are equal. I would suggest that those areas in which technical efficiencies can be more rapidly realized cleaning and maintenance of buildings and grounds, for example, are the first in which jobs will disappear. The biggest leaps in this area are in health care and in security. The direction is clearly, at least in the US, to move to the provision of services, and knowledge workers (lawyers, architects, professors) will increasingly be called to support these service industries and make them more efficient.

But what is “after services.” I am reluctant to say that the answer is “nothing,” but I don’t think the hollowing out process is infinite. We live in a period — and location — of material abundance. Despite the vast “improvements” we have made in manufacturing desires (witness the $200 sweat suit), I argue that there has to be an upper limit on these things. At some point, someone is going to realize that the emperor is wearing a cheap-ass velour sweat suit and the bubble will pop. Unlike the dot-com bubble, though, this will be the bubble — the one that keeps the US on the top of the charts for personal income. Capitalism eats itself.

There is no easy solution to this, I don’t think. Those who are part of the seeming withering “voluntary simplicity” movement will be as affected as everyone else, since they often live simply on the margins of a hyperproductive society. I think there are some blueprints for moving forward in the open source movement, but one of the reasons open source works is because of the patronage of the machine (hard & soft) owners. One path, and a path that seems very difficult to ignore, is that we will increasingly be required to bow down to our -robot-, er… robots’ masters.

The other side of this, of course, is that while advanced economies come down off this ride, the developing economies will in turn be taking over. Those that gain the political will to take advantage of free trade will additionally be able to free ride to a certain extent, adopting the efficiencies discovered in the advanced economies.

What to do when it becomes cheaper to use machines than grossly underpaid (and often imported) humans to do your alienating labor? Well, you could prop up the system, mandating (as they do in Oregon) that all gas stations are full serve. Eliminate grocery stores by fiat, for example, forcing the continued health of the restaurant industry. Oh, wait, that will cut into a huge labor market: kitchen updating. Or maybe not: who really uses those fancy kitchens anyway?

Alternatively, we could institute a 30-hour work week (aka the Kellog Work Week). But an inadequate minimum wage at 40 (more often 60 or 70) hours a week would be even worse under such conditions, so you would need to double the minimum wage. Wait, you say, if you do that no one will hire menial laborers, and this will encourage even more productivity from existing workers. Odd that this would be a complaint, but there is definitely the possibility that this would accelerate joblessness. So you increase employment taxes enough to provide for every citizen of the US a comfortable existence. Yes, you can sit on your butt 24/7 and have those who are working pay for you to do so. Wouldn’t everyone quit working, then? I wouldn’t, would you?

Of course, for that to happen, those who are employed, and especially those who make a lot of money, would have to allow for a change in the way our taxes work, and in the way we think about poverty and work, and success. I think that they would much sooner buy a set of $400 cashmere sweats and support the more industrious of the working class who are polishing their new granite counter tops.

Or, we could think (again) about local “communities of excess” where you — at least locally — eliminate poverty, crime, and disease, and toil…

(Updated: Now with spellchecking!)