
Why Are There Still So Many Jobs? The History and Future of Workplace Automation [pdf] - huherto
http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.29.3.3
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Animats
Many "bullshit jobs" in finance exist only because of legal quirks, and could
be eliminated by minor regulatory changes. Finance has about 5% of US jobs.
Manufacturing has 7%. We need to get finance down and manufacturing up.

It would be straightforward to downsize the insurance industry. Insurance is
complicated because insurance companies want it complicated so they don't have
to compete on price. Much to the annoyance of the insurance industry, Medicare
supplement policies are limited to 10 standard options, A through N. (There
used to be more). So comparing companies means looking at a table of prices vs
standard forms. If that was extended to other types of policies, the insurance
industry's marketing operations would be much smaller.

Finance could be downsized by imposing a Tobin tax on financial transactions.
One takes effect on January 1, 2016 in the European Union. It's 0.1% on most
transactions, and 0.01% on derivatives transactions. That's enough to kill the
high frequency trading industry and downsize derivatives trading by 90%, based
on Sweden's experience.

The excess labor can be reassigned to more productive jobs in the lower
levels.

~~~
toomuchtodo
> The excess labor can be reassigned to more productive jobs in the lower
> levels.

I know this is going to sound crazy, but can't we just provide housing, cheap
renewable-based power, electrified self-driving mobility (those tiny Google
self-driving cars), and inexpensive healthy food to those who can't work
because jobs don't exist for them anymore? We already do some of this for the
elderly with social security; I simply argue for going the "full monty".

I understand this future is still awhile away. When trucks switch over to
autopilot, I think that'll be the big experiment. You'll have millions of
people and nowhere for them to go in the economy. I also understand this might
create a huge "moral hazard" with not enough people wanting to work; how would
that be any different than us currently pushing people out in favor of
automation with increasing the minimum wage? (Disclaimer: I am in favor of
increasing the minimum wage, as it is woefully behind compared to inflation
and CPI)

Find jobs, automate, split productivity/wealth/income between automators and
society (currently "consumer excess"), repeat.

~~~
Animats
The US used to have a more generous welfare and housing program. In the 1950s
and 1960s, the US built huge housing projects in big cities. The result was a
huge population, mostly black, with nothing to do. Riots, concentrated crime,
and several generations of welfare kids resulted.

Background: [1]

[1] [https://nextcity.org/daily/entry/better-public-housing-
lesso...](https://nextcity.org/daily/entry/better-public-housing-lessons-
failure-success-us-world)

~~~
deciplex
Yes, free housing and food stamps is not the answer. Basic income is.

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wcummings
Interesting read, I _love_ to see contrarian views on automation. I'm really
tired of seeing poorly thought out rants from techno-prophets predicting
unbounded exponential growth when economic growth is stagnating globally.

~~~
TeMPOraL
There isn't going to be an unbounded exponential growth, and every techno-
prophet knows it (as opposed to armchair economists) - if we keep basing our
economy on endless growth, everything will go to hell when we hit the natural
limits.

~~~
netcan
What are the natural limits? Do you mean natural resources?

~~~
hebdo
Yes, for example. Any resource you can think of.

Be creative: unbounded exponential growth would mean, for instance, that at
some point in the future the global yearly energy consumption would be higher
than what E=mc^2 suggests for m=mass of the earth.

~~~
nickff
You're implicitly assuming that all human energy consumption takes place on
planet Earth.

~~~
qu4z-2
Or at least in the universe, which seems like a fair assumption for now.

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endymi0n
Why?

That's why.

[http://strikemag.org/bullshit-jobs/](http://strikemag.org/bullshit-jobs/)

~~~
jdmichal
And yet GDP per person has trended upwards in a pretty global fashion. [0, 1]
So either those providing "real" value are so productive that they support all
that dead weight and yet still continue to grow, or those "bullshit" jobs are
actually providing real value and increases in productivity.

[0]
[http://www.bls.gov/ilc/intl_gdp_capita_gdp_hour.htm#chart03](http://www.bls.gov/ilc/intl_gdp_capita_gdp_hour.htm#chart03)

[1]
[http://www.bls.gov/ilc/intl_gdp_capita_gdp_hour.htm#table01](http://www.bls.gov/ilc/intl_gdp_capita_gdp_hour.htm#table01)

~~~
danharaj
GDP measures GDP, not 'real value' or 'productivity'. Also, just because the
mean is increasing does not mean the median is, too.

~~~
jdmichal
GDP is a (attempted) measurement of economic value-add. I cannot think of a
better definition of productivity in the context of this conversation. The
value-add per person has been increasing despite the claimed existence of
"bullshit" jobs, with that being roughly defined (by me) as a zero-value-add
position. My proposal is simply that if they _are_ zero-value-add, then the
value-add demonstrated by the rest of the population must be enough to
completely cover those losses and then some. I'll let the audience decide if
they consider that viable.

Feel free to provide a better measurement if you have one.

~~~
danharaj
We'd like GDP to track what we would consider value, but it need not. It's not
hard to find people who will complain that some contribution to GDP is
unhelpful, detrimental. It wouldn't be hard to find sour words speaking out
against financialization, for example. Economic rents in general can
contribute to GDP but intuitively are not 'real value' because otherwise we
wouldn't call it rent. Governments can create a lot of worthless work that
contributes GDP, but unsustainably. It would be debasing to the word 'value'
or 'productivity' to ignore that.

We'd like at least for 'real value' or 'productivity' as intuitively
understood to contribute to GDP. That is, from an increase in value one may
infer an increase in GDP (usually). I can accept that. I take issue with an
inference in the other direction. If I knew how much 'real value' contributed
to GDP and how much was in excess of that contribution, I would be an
incredibly accomplished economist.

~~~
jdmichal
I can buy both yours and TeMPOraL's [0] argument, which I _think_ are roughly
saying the same thing. Thanks for the well-reasoned response.

[0]
[https://news.ycombinator.com/item?id=10000123](https://news.ycombinator.com/item?id=10000123)

------
Animats
The American Economic Association site:

    
    
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In black and red lettering on a dark purple background.

A summary is available here. It's the usual economist hand-waving.[1]

[1]
[http://conversableeconomist.blogspot.com/2015/08/since-1986-...](http://conversableeconomist.blogspot.com/2015/08/since-1986-my-
actual-paid-job-as.html)

------
skadamat
Really good in depth dive into the problem, love it

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netcan
Automation and labour is a question we have a history of being repetitively
wrong about. So, its worth treading lightly.

First of all, we use the word “automation” which already implies replicating
people. We could just as easily use “tools.” There is a lot of grey area
between automation and tools and economically the two are fungible anyway. If
we think of new tools being invented, we think of people’s productive
capacities being enhanced rather than replaced. Is a combine harvester a tool
or automation?

 _“There is no fundamental economic law that guarantees every adult will be
able to earn a living solely on the basis of sound mind and good character.”_

I think this is a good thing to be pondering. Our modern economy, our
political philosophies and I think most of our ideas of how society works kind
of assume that every adult with decent character _is_ be able to earn a
living. This is why living wage debates get people so fired up. The rug gets
pulled out from under all our political ideas if this doesn’t hold more or
less true.

Overall, I think this paper goes down the right track. Historically, demand
for stuff has been remarkably elastic. We can consume a lot of stuff.
Automation is essentially tools for producing more. We have good historical
examples of the workforce becoming more sophisticated to take advantage of
these tools and continue being useful.

I do think it could be dangerous relying on the historical analogy, because as
the quote above suggests the is no rule in economics that makes this
necessary.

I do see a couple of avenues to worry about.

(1) One is the vaguely Marxist one: labour & capital. Automation is capital.
It accumulates in ways that concentrate wealth. If the 99% thing we are seeing
now is indicative of a long term trend dictated by technological progress…
Marxist conflict dynamics may well play out in some way. Growing wealth gaps
create social-political instability that’s hard to avoid.

(2) The pace of change. Technological progression’s effect on everyday life is
moving very fast. The digital divide thing is real, way more than it was ten
years ago. I recently spoke to a woman (about 40) who has never really had a
computer that couldn’t get up to speed in hospitality work because she
couldn’t leaner the software and its quirks fast enough. Workforce skills
keeping up with technological progress is part of the process. But
historically, this has been something schools could lead because the pace of
change was generational. These days the rate of change is revolutionizing
occupations much quicker. That could leave a lot of people behind.

I think demand elasticity will hold We can keep consuming more. I think the
problem is in the workforce’s ability to keep up. There are plenty of
potential jobs today, if the skills were available. I think if we got a 100%
increase in the number of skilled programmers of the caliber that Google and
FB are fighting over, the economy would absorb them pretty easily. Same for a
lot of professions. The problem is that the skill sets required keep getting
more sophisticated. That means inflexible labour markets.

