
9.2% Unemployment? Blame Microsoft. - grellas
http://blogs.forbes.com/quickerbettertech/2011/07/18/9-2-unemployment-blame-microsoft/
======
PaulHoule
Technological unemployment is part of the picture, but there isn't a 'magic
bullet' to avoid it.

We need Scientists?

Ask the 1800 surplus Physics PhD's that get produced every year. It's clear
that the academic system uses young and smart people, but not that it produces
desirable or permanent employment for them. A wise person wouldn't get
involved, unless they've got one (or preferably two) parent(s) that are
already in the field who can pull some strings for them.

As for programmers, I wake up every morning with the mission of putting myself
out of work.

~~~
jfoutz
Scientists are just like Machine learning pixie dust. It's fun to say, but
you'd be hard pressed to find a small business that needs an astrophysicist. I
don't mean to pick on astrophysicists by the way, pick any random phd, a small
business probably doesn't need that.

~~~
huherto
May be one small business doesn't need a PhD. But the PhD can solve problems
that many small businesses have.

~~~
jfoutz
Right, because PhD is like pixie dust you can sprinkle on a problem.

Sorry, the point i'm trying to make is it's easy to be intellectually
dishonest about the complexity of problems people are facing (sorta like the
ML article earlier). If your small business needs new research to survive,
you've lost. Very few small businesses are limited by complicated third order
effects. they're limited because the owner doesn't feel like doing inventory
(or writing more tests, or calling more potential customers) over the weekend.

Sure, you can find counter examples here and there, like special hedge funds
or old hippies with geology shops, but most small businesses know 5 things
they could fix to make it better.

If they're really that super-efficient and organized, they're either a large
business that turned into a small business because the field is dying or
they're not a small business.

------
jarrett
The question of whether automation causes unemployment to rise in the long run
is addressed in detail here:

[http://en.wikipedia.org/wiki/Relationship_of_automation_to_u...](http://en.wikipedia.org/wiki/Relationship_of_automation_to_unemployment)

TL;DNR for the Wikipedia article:

People have worried about machines putting humans out of work for centuries.
But the unemployment rate has not risen steadily over the same period even as
technology has constantly grown. The long term trend (measured since the
beginning of the industrial revolution) has been that new jobs are created as
old ones are destroyed.

But, nobody knows if this trend will continue indefinitely. There may be some
threshold at which technology is so advanced, companies no longer come up with
profitable ways to use humans.

To take an extreme example, imagine if we had robots that were smarter,
stronger, and in every way more capable than humans. One can imagine a lot of
different outcomes in that case. Widespread, permanent unemployment is one of
the less favorable possible outcomes.

This doesn't mean the Terminator has to be invented before that technological
threshold is reached. Some say we've already reached it, but it's way too
early to say with certainty.

In short, technology has improved most lives without harming overall
employment throughout the last few centuries, but that doesn't mean the same
logic will always hold. The Wikipedia article is a really good read with a lot
more detail.

~~~
kalid
I'm probably missing something, but I don't see how driving the marginal cost
of human necessities (food, shelter, clothing, health care, education) to zero
is anything but a good thing.

Is the world worse off because we have innumerable, self-replicating automated
"robots" (plants) which, for free, convert carbon dioxide back into oxygen?
Should we prefer a universe where humans must do this themselves? Now what if
rice harvested itself and walked to your door every morning? Would that be a
bad thing?

My thinking: if we have robot farmers, delivery drivers, tailors, doctors,
etc. we've reached the Star Trek universe where the replicator eliminated all
scarcity (maybe not with a molecule-by-molecule copies, but a robot which can
build anything we need cheaply).

My hidden premise is that people do "work" (labor they don't enjoy) to ensure
their survival. There are other issues like status, prestige, satisfaction,
etc. but I'm talking about the basic fear of unemployment ("unemployment is
bad because you could starve and die").

If the survival cost is 0, then there should be no fear of unemployment. You'd
have 100% leisure time for art, study, etc.

~~~
sanderjd
I think what you are missing is the in between phase where scarcity still
exists, but the best way to produce scarce outputs does not involve humans,
besides those who own or run the scarce-output-production entities. This seems
to me to either produce societies with wild inequities between a very few
producers and a very many do-nothings, or the types of socialist utopias that
we appear to be really horrible at as humans. The everyone-has-a-magical-
everything-maker phase, I agree, that sounds pretty solid.

~~~
kalid
Good point -- thinking out loud, it seems to me that automation would just
drop the price of goods.

Imagine Moore's law applied to food and transportation -- wouldn't grocery
stores and fedex have to lower their prices to match competitors? Suddenly
food becomes cheaper and cheaper, until you can buy a lifetime supply of rice
for $5 (unfathomable today, but you can buy a "lifetime supply" of textual
data storage for probably the same price).

I mean, there could be collusion and cartels to restrict supply (diamonds),
but something as important as food production wouldn't be kept restricted long
(food could become a utility).

------
billybob
"I know you want to be hired full time by me. And I want to be doing my part.
But please understand: I’m running a business. I want to make profits. And
these tools are letting me make more profits by employing people only when I
need them rather than carrying them on my payroll."

This is why every time I hear a politician talk about "creating jobs," I
grimace. A business will hire someone if and only if they think that person's
output will make more money than it will cost to employ them. Period.

Government cannot create jobs. It can make the cost of doing business less
expensive by lowering taxes, or it can make the profits of a business higher
by providing incentives. But for your average small business, those kinds of
changes add up to much less than one person's salary, so it makes very little
difference.

Government can create a good climate for businesses to exist, with laws,
infrastructure and education. But those are long-term investments. Short-term,
anything the government does to affect the economy is a shell game. You can't
sign a law and magically make workers productive.

~~~
ZachPruckowski
>Government cannot create jobs. It can make the cost of doing business less
expensive by lowering taxes, or it can make the profits of a business higher
by providing incentives. But for your average small business, those kinds of
changes add up to much less than one person's salary, so it makes very little
difference.

It can also use monetary and fiscal policy to stimulate demand, increasing the
amount of work that needs to be done and resulting in more hiring.

~~~
timwiseman
_It can also use monetary and fiscal policy to stimulate demand, increasing
the amount of work that needs to be done and resulting in more hiring._

A government can certainly use monetary and fiscal policies to stimulate
demand and create more work, but that does not necessarily result in more
hiring.

For one thing, when there is a surplus of goods (and there frequently is late
in a recession and shortly thereafter) the initial demand will be met by that
surplus rather than any additional production. Even when that surplus is
exhausted, additional demand may be met through through automation. Also, if
an industry as a whole thinks that this demand will be short lived, it may
choose to either raise prices or simply permit some of that demand to go unmet
rather than make large capital expenditures to increase production.

Also, normally when a country is trying to "create jobs", its goal is to
create jobs for its own citizens. In an increasingly global economy,
stimulating demand may increase imports without increasing jobs in the target
economy.

So, while increasing demand _may_ help create jobs, it also may have limited
impact and that impact may take a substantial amount of time to be felt.

~~~
yummyfajitas
_Even when that surplus is exhausted, additional demand may be met through
through automation._

This is exactly what happened in our current recession.

<http://research.stlouisfed.org/fred2/series/GDP>

<http://research.stlouisfed.org/fred2/series/PAYEMS>

<http://research.stlouisfed.org/fred2/series/DGORDER>

<http://research.stlouisfed.org/fred2/series/IPDCONGD>

<http://research.stlouisfed.org/fred2/series/DMANEMP>

------
pak
grellas, you're the man when it comes to assiduous comments on legal topics,
but why this article? It's just a bunch of hard-nosed Valley boardroom hot air
that namedrops from the NASDAQ-100 and tells middle america to suck it up. The
only salient point was that the government has no easy way of producing more
jobs, but there's no solution offered and it's buried in a sea of other BS.
"Hey poor and struggling unemployed Americans, you need to find new skills?"
Seriously, Forbes needed to run a whole article dedicated to this?

A much better take would be an examination of why our education system churns
out so many college grads with few marketable skills. Or something that
balances it with their viewpoint:
[http://opinionator.blogs.nytimes.com/2011/07/16/growing-
up-t...](http://opinionator.blogs.nytimes.com/2011/07/16/growing-up-then-
going-home/) This submission is just a pile of inflammatory linkbait that
offers nothing new to the people that would agree with it, and enrages those
who disagree by using such caustic language.

~~~
sixtofour
> "Hey poor and struggling unemployed Americans, you need to find new skills?"
> Seriously, Forbes needed to run a whole article dedicated to this?

That is _exactly_ the message that the unemployed and the rest of the country
need to hear and take to heart. No business should expected to take on people
unskilled for a job. Some businesses will do so, to grow talent, and some of
those will show an ROI, but no business should be _expected_ to do so.

Given that, people _do_ need to suck it up and learn new skills. The article
made a good argument for that, and did it in the context of the new reality.

Some people won't be able to develop new needed skills, for various reasons.
For some people technology and society will just move faster than they can
keep up with. Others have some other impediment. As this trend continues, we
need to get better as a society at dealing with those people.

~~~
sanderjd
The idea that business shouldn't be expected to train its workforce is
intriguing to me. This seems to be an underlying assumption in our society,
but I don't recall ever having heard an argument for it one way or the other.
Isn't a business that refuses to provide any of the necessary education for
its employees profiting from a well-educated society without pitching in
anything for the bill? If all governments worldwide were to refuse to invest
in education in any way, the rational business decision would be to take this
on themselves, or risk having no workforce with which to remain competitive.
From this point of view, our enormous societal investment in education looks a
lot like a subsidy.

~~~
chc
Businesses pay taxes and spark huge amounts of taxable activity in the course
of operating — that's how they pitch in (even discounting the non-tax benefits
that businesses provide to society). If society is not providing education
with those tax dollars, that would be society's choice.

I can see some reasons why businesses might want to provide education (and
many do in certain circumstances), but in general, I don't see why it should
be more their responsibility than society's.

~~~
patrickk
_"... in general, I don't see why it should be more their responsibility than
society's."_

If a business wants to be successful they _should_ invest in employee training
IMO. I'm one of these recent college grads with "no marketable skills".

The company I'm with needs iOS developers. They _could_ conceivably try to
find qualified people, but that would be time-consuming, expensive and far
from guaranteed that they'd find anyone (as there is little iOS developers
where I live). Instead, by allowing me to teach myself to build apps, they
have someone who will hopefully be making them money in a few weeks/months at
a fraction of the price of an experienced developer (if they could find one).
This point ties back into the article's observation that people are graduating
with unneeded/bullshit degrees.

------
knieveltech
"New developments in flooring, painting and construction are resulting in
longer use of our homes."

I know that this is at best tangential to the OP's point but this poked me in
the eye. Can the OP really be this naive about modern construction materials
and practices?

150 years ago it wasn't uncommon to build a house out of hardwood planking,
with a stone foundation. Post in beam construction using 2ft square timbers
was also fairly common. This kind of construction is built to last and it
does.

By comparison the largest driving factor in material selection on your average
home construction project is cost. That's why you get vinyl siding, soft pine
2x4's, and the cheapest interior hardware money can buy. So in this instance
innovation is a euphemism for selecting poor materials. Great.

How many people really think their stick built McMansion is going to be
standing in 150 years? I mean, really?

~~~
zwieback
Materials are much better now than in the 60s or 70s but not as good as in the
more distant past. My house was built in the 40s and looks better than 10 or
15 year old houses in the area. On the other hand, insulation was crap or non-
existent then and furnaces were less efficient.

~~~
damienkatz
Survivorship bias. Poorly built houses from long ago are no longer here,
reminding us how poorly they were constructed, only the best examples survive.
In 150 years, only the best houses built today will still be standing, and
people then will be compare these houses with flimsy mass produced homes and
say the same things.

~~~
zwieback
Some bias, yes, but there are other things at work. When my house was built
large beams, wide siding boards and clear wood for hardwood floors was readily
available. As the supply of those materials shrank cheaper woods and the first
engineered wood products showed up but they weren't particularly good.
Builders were switching to aluminum windows, formica, carpeting and drywall
but hadn't necessarily figured out how to build well with those materials.

Now we have higher quality engineered materials made from cheaper wood but
they cost a lot more so people don't use them for mass construction.

------
pat2man
This could have been said about the industrial revolution, invention of
agriculture, etc. Each time in our history when a new technology has made our
lives more efficient some people have lost their jobs. In their place more
jobs have been created that would never have been thought of before.

Improvements in efficiency always lead to more wealth not less. As new tech
companies start making money on their improvements on society new jobs will be
created all over the world. Yes checkout clerks will no longer exist just as
many manufacturing jobs have disappeared. In their place we will see more
software developers, consultants, entertainers and artists.

~~~
AlisdairO
I'm not so sure. I think we will continue to create highly skilled jobs, but I
just don't see where unskilled labour gets a look-in in the new economy - In
the past, it was reasonably easy to see where new jobs _might_ come from,
whereas I just don't see anything much coming up. We're even replacing more
and more service jobs, which were what took over as farming and industry
employment declined.

I agree, there will probably be more wealth - I just think the distribution of
that wealth may well be societally damaging.

~~~
chc
If they have no skills, they never had very good prospects. Even "simple"
farmhands need to have some skill at tending to the farm. It's not like you
could just stand by a conveyor belt with a dumb look on your face and call
yourself a factory worker for very long.

~~~
gaius
No-one who's ever farmed would say farming is unskilled. Just as I'm sure,
programming would look just like typing to a farmer.

~~~
chc
That was my point, and why I wrote "simple" in quotation marks. Even jobs that
are viewed as "unskilled" generally involve some kind of skill — farmhands,
factory workers, customer service representatives, etc. Any job that truly
requires no skill essentially has no job security anyway, as the worker
literally brings nothing to the table. The actual complaint here is that the
demand for various skills waxes and wanes.

~~~
AlisdairO
Jobs like working in mcdonalds obviously require a certain skillset, but that
skillset can be taught in a very limited timeframe, as opposed to skilled jobs
where that educations takes a much longer amount of time. I'm saying that the
availability of such jobs seems to be on the wane.

I appreciate that such jobs are undesirable, but they're much in demands by
those unable to take up a skilled trade, or those whose skillset has been
rendered obsolete. They might not be great jobs, but they beat the alternative
of nothing.

------
yason
Jobs are just one way to distribute wealth. Technology has made many jobs
unnecessary: it doesn't mean distributing wealth has become unnecessary.

We will eventually have to come up with other, possibly less fair, ways to do
the distribution; the reason for that won't likely be because it might be
considered ethical by some but because it'll cause much more trouble to not
redistribute that wealth.

~~~
perfunctory
> Jobs are just one way to distribute wealth. Technology has made many jobs
> unnecessary: it doesn't mean distributing wealth has become unnecessary.

Good point.

------
chriserin
This is an argument that the unemployment problem is structural rather than
cyclical. Paul Krugman points out constantly that if the unemployment problem
was structural, we'd see wages rising in areas where there is demand, but
wages aren't rising for anybody that makes less than 400,000, though for those
above they've increased 23% since 2008.

The structural unemployment argument is a trope to insist that the government
can't do anything to encourage employment, because stupid people just can't do
today's jobs. Its politics disguised as economics.

~~~
sixtofour
If there are many job openings, but little actual hiring, then there is no
real demand. If there were real demand, businesses would actually be filling
those supposedly open jobs and figuring out how to make use of who they hired.
Cherry picking with open job ads does not in itself show demand.

If wages are rising for people who make more than 400K, it's because demand
for people who fill those jobs is real. That may be because businesses have
decided that maxing out on employees who almost literally _make_ money is
better business than maxing out on the people who are effectively tools for
the 400K+ crowd.

~~~
lotharbot
> If there are many job openings, but little actual hiring, then there is no
> real demand.

Or there is demand but inadequate supply. I've heard several people on HN talk
about their companies having openings, getting 10 times the resumes that they
did in 2007, but seeing significantly fewer _qualified_ applicants overall.

------
lukesandberg
Good article, though i disagree with his conclusion that natural unemployment
is going to fundamentally change. He is arguing that the economy is in a state
of change and the losers in this creative destruction are those in low skilled
jobs. so that explains the currently high unemployment, but to argue that we
are at a new natural level doesn't seem justified. As the population (albeit
slowly) retrains to participate in the higher skilled labor market employment
will rise.

This is somewhat similar to the classic dismal science
(<http://en.wikipedia.org/wiki/The_dismal_science>) argument. Even though
there is high unemployment now arguing that the economy cannot find a use for
these people seems very short sighted.

~~~
cachemoney
The economy could certainly find use for them, but perhaps not at a price
above minimum wage.

------
j_baker
From what I've heard, the consensus among economists is that the high
unemployment rate isn't about lack of money or lack of will to hire. It's
about lack of consumer spending. Right now, Americans are actually starting to
pay down their debts and save money. This is a good thing in the long term,
but makes companies hesitant to hire in the short term.

I have difficulty believing that hiring is slow due to technology. The fact of
the matter is that you don't climb out of the worst financial crisis since the
Great Depression overnight. We just need to have patience. Some economists
have estimated that it will take 10 years before our economy is fully back on
track.

~~~
Jach
You might enjoy reading: [http://spectrum.ieee.org/robotics/robotics-
software/economic...](http://spectrum.ieee.org/robotics/robotics-
software/economics-of-the-singularity/0)

------
muhfuhkuh
IMO, the problem is much more than just automation and advancement in
technology. It's actually far graver, and maybe inexorable at least in the
short term.

Hate the man or his policies (or both), but you can't deny President Obama's
observation that training education is the _real_ problem in the so-called
"jobless recovery". America as it currently stands has a total, almost
prideful disregard for education (public and higher) and technical training.
NPR and WSJ report that there are two million open jobs in the US. That's
right, up to 2,000,000 jobs are currently open in places like manufacturing in
the US. The problem? No one knows how to do the things that fill those
positions. Extra tragedy: There aren't enough schools that train in these
"manufacturing 2.0" jobs and there aren't enough people that care to learn
those skills.

So, the more these jobs languish unfilled, the more productivity slows, the
less likely the economy flourishes, and the more the currently unemployed will
stay that way unless they remediate or accept jobs beneath their
experience/education/skill level.

My personal pet theory, however, is that we don't have a jobs problem, we have
a Business-with-a-capital-b problem. Entrepreneurship is still seen by many in
two extreme ways that I feel actually turn people off to it.

First, people see entrepreneurship as some mystical, romantic idea reserved
only for the rich, connected, and intellectually elite. You can't be
successful in business without being (or knowing) rich, come from the Ivy
League, or just dumb luck. None of those are in large supply, thus the
trappings of success go to those who either know better (like we on HN?) or
actually fall into the aforementioned groups.

If not the former, then starting a business is an action plan of last resort
("well, I've been unemployed for awhile now, may as well start that new
business I wanted to do while I was wasting away in my cubicle for 10 years
polishing slide decks and pushing papers." It's seen almost derisively ("Oh,
you're starting a _business_. Couldn't find a real job, eh?").

Pie-in-the-sky solution? $10 Billion every year for 10 years on prime-rate or
lower, long-term, guaranteed SBA loans. Create a federal credit union for this
purpose, run by participating states, backed by the NCUA, to manage small-biz
eligibility determinations, disbursements and repayment. Eligible business
borrowers must have a business plan with 5-year revenue projections as well as
application that are analyzed and "scored" using a points system like they do
in Canadian immigration applications.

Then, open medicare enrollment to small businesses (below 99 or fewer
employees) and self-employed persons and their partners/dependents. Base price
on current per-capita cost on a sliding-scale to ensure no deficits or
taxpayer burden.

Then, tax credits for every domestic job created.

Full disclosure: I'm a liberal.

~~~
MoreTuple
Every person that I know that has considered starting their own business has
decided against it for one reason only, health insurance. They have always
been the obtainer in chief of health insurance for the family and it is too
risky to go without. I strongly suspect that a public health option would blow
the job market wide open between folks who want to retire but can't because
health insurance is idiotically expensive and those of us who would love to
start a business but cannot put a whole family at physical risk for a
potential monetary reward.

I start a business means my present job opens up, as well as any additional
hires my business would need. Jobs problem gone.

~~~
sixtofour
"I strongly suspect that a public health option would blow the job market wide
open ..."

Excellent argument for real reform to health insurance access.

~~~
FrojoS
Well, I learned the same logic in school. I found it compelling, too. And I
guess I still do. Our teacher said: 'Because we have this safety net here in
Germany, we can take more risks.'

Yet, I see more risk taking in the US than in Germany. I suppose, its rather
that Europeans are less risk taking, so they also support a better safety net.
I know its not my business, but I can't help being scared about the idea, that
the most dynamic country in the western world might slow down because of
copying Europe.

~~~
beagle3
Israel has a German-like safety net (health, food, unemplouyment, training and
otherwise), and more risk taking than the US - at least where technology is
concerned (only silicon valley tops israel in startups per capita - even
California does not). So neither explanation is good.

------
bitwize
I hate those self-checkout things, but for a different reason than the lady in
the article.

The bottom line is we haven't gotten the tech _right_ yet. The machines
measure several different variables in order to keep shoppers honest: the
speed of the scanning and bagging steps, the weight of the bagged item
(compared against a database of acceptable weights), etc. The problem is that
false positives are all too common, and it's impossible to back out of a
false-positive scenario without help from an attendant. I find the results
deeply unsettling, like a science fiction nightmare scenario come true in
miniature, and these machines have become like miniature versions of GLaDOS
from _Portal_ : hostile, paranoid, seeking to catch you out and make you feel
bad with their irrefutably friendly female computer voices.

It's telling that when I committed the unforgivable offense of putting
something in with a different measured weight than the database said the
scanned item should have, the attendant came over and said "Sorry about that.
She gets a little sassy sometimes."

That's my sign that the future we've dreamed of and feared is here. We're
putting computers in charge of formerly human-mediated decisions, but people
tend to forget they're not humans so they frequently get it wrong _and_ you
can't argue with them like a human.

I would love to see business processes streamlined by machine. But keep humans
on the job until the machines stop sucking, please.

------
sixtofour
In a reply elsewhere here, I said "people do need to suck it up and learn new
skills."

How many people know how to learn new skills, or are able to recognize quickly
that they need to do so?

Is that a missing element in our education? You spend 12 years drinking what
they're selling, and then suddenly you're expected to know how to re-tool
yourself.

Shouldn't education be structured in part to teach and reinforce self re-
tooling, and even grade on that ability?

~~~
samlevine
> Is that a missing element in our education?

The missing element may be learning itself. If you don't come out of college
with an ability to learn new things on your own or with the help of others you
may have missed the point.

I've spent a significant amount of my adult life teaching people how to use
Microsoft Office products (i.e. I've done tech support in some fashion or
another for a while now). Some of them have been seasoned office workers,
others have been older folks and still others bright young people that know
how to pilot a browser but are confused by a 2 paragraph e-mail (with
pictures) on how to connect to the corporate network via VPN.

Almost no one I've ever supported wants to know how to do something
differently. Everyone is mad that things are changing and the thing that
they've done for several months, years or decades, no longer works for some
inscrutable reason. The time they've spent learning is real and the changes
they see seem arbitrary at best and frequently counterproductive.

I've supported people that were fine with e-mail, but thought that wikis
weren't a good use of people's time. Others can figure out how to google
things and look through forums, but most have difficulty sorting noise from
useful information. I've supported people with PHDs that are incapable of
reading any error messages because they have been trained not to read them by
crappy software.

We have so many, many tools available to us today and we're not using them in
many businesses, even when they've already been purchased. And even more
businesses are still using paper and duplicating effort into multiple
spreadsheets (and using Excel as a CRM, etc).

~~~
sixtofour
"The missing element may be learning itself. If you don't come out of college
with an ability to learn new things on your own or with the help of others you
may have missed the point."

Fair point, but I was focused more on K12, particularly if the idea that more
people should go to votech and less to college catches on.

------
rapind
I have to take issue with one of the statements; "Things are lasting longer
and working better."

This is absolutely untrue in my personal experience. Maybe he's making the
comparison using different dates than I am, but I've definitely experienced
shoddier product quality and customer support within the last few year than I
ever have before.

------
loup-vaillant
I feel obliged to quote Robert F. Kennedy here (a few weeks before he was
shot):

 _"[…] Our gross national product […] counts air pollution and cigarette
advertising, and ambulances to clear our highways of carnage. It counts
special locks for our doors and the jails for those who break them. It counts
the destruction of our redwoods and the loss of our natural wonder in chaotic
sprawl. It counts napalm and the cost of a nuclear warhead, and armored cars
for police who fight riots in our streets. It counts Whitman's rifle and
Speck's knife, and the television programs which glorify violence in order to
sell toys to our children.

"Yet the gross national product does not allow for the health of our children,
the quality of their education, or the joy of their play. It does not include
the beauty of our poetry or the strength of our marriages; the intelligence of
our public debate or the integrity of our public officials. It measures
neither our wit nor our courage; neither our wisdom nor our learning; neither
our compassion nor our devotion to our country; it measures everything, in
short, except that which makes life worthwhile. […]"_

In short, the GNP doesn't measure what we would really like to optimize, but
we optimize it anyway, because it is easier to measure. Just like we would
search for our keys under the lamppost, instead of near the car where we lost
them.

Unemployment rate is similar. We don't _want_ everybody to work full time.
Most jobs are boring and tiring anyway. No, the goal should to _reduce_
mandatory work. Blame Microsoft? Actually we should _thank_ them. The problem
is everyone needs a job, or else they grow broke and eventually homeless.
Sure, we could try to give a job to everyone, but this is a suboptimal short-
term solution. A better way would be to _further reduce_ boring work
(technology can do that), and lower the need for jobs at the same time (I
don't know how to do it).

I think most HNers understand this: you're most free when you don't need to
waste your time "making" money. So let's maximize free time instead of
employment.

------
jvandenbroeck
One of those articles that just waste your time, catchy title but nothing
really interesting or new.

~~~
Locke1689
Nothing that gets posted is ever really new, but this article does point out
something very important: manufacturing output in the US is at an all-time
high in the US, while manufacturing employment is low. While I've been
predicting this for quite a while, the actual realization is quite interesting
and the societal consequences are enormous.

------
JeffL
Could we be trending towards a future where 99% of people are unemployed, but
the 1% that is employed are so productive that there is plenty for everyone? I
guess that's basically the same as saying that robots will do everything.

~~~
iqster
Sadly, that is not the way captialism works. The 1% of people will have
everything and the remaining 99% will starve. I'm paraphrasing one of my
favorite quotes: "Capitalism is the best system we have for creating wealth.
It is a lousy system for the distribution of wealth."

I suspect I will make some flack for this comment. I'm not arguing big govt.
Rather, I'm pointing out that in a world where a small number of individuals
CAN produce the majority of wealth, we need a better system for redistribution
to avoid a dystopian society.

~~~
knieveltech
"The 1% of people will have everything and the remaining 99% will starve"

It's been tried: <http://en.wikipedia.org/wiki/French_Revolution>

In the US, you try for a wealth distribution anything approaching what you're
discussing and what you'll actually end up with is 1% of the population under
a constant barrage of sustained small arms fire. Parents aren't going quietly
watch their children starve.

Incidentally, I agree wholeheartedly that we need a better redistribution
system.

~~~
sanderjd
It will be interesting (and terrifying! don't get me wrong, but also
interesting) to see what happens if we get to this point - there is no
Bastille for the masses to storm, throwing out the entirety of the democratic
government would accomplish very little in terms of wealth redistribution, and
the military now has the literal capability, though hopefully not the strength
of will or weakness of conscience, to kill every member of the starving horde.
Our distribution of wealth may not be as skewed as pre-revolutionary France,
but our concentration of might is far higher.

------
Hyena
This article seems pretty off-base. It's true that established businesses more
rarely need to hire people because technology has eliminated a lot of clerical
jobs, but the flip side is that there are lots of smaller companies now as
well which only exist because they don't need to hire three secretaries and a
file clerk.

More importantly, though, the major problem in unemployment is that only 35%
or so of the population have a college education. For them, unemployment is
closer to 3% right now. Most of that 9.2% is out of work because demand is
weak. People's skills didn't suddenly become obsolete at the stroke of
midnight sometime in 2008. They were all formerly employed doing the exact
moderately skilled work they'll be doing again when-and-if demand recovers the
trend.

They'll be doing it for precisely the same reason that an astrophysics Ph.D.
is not in itself all the useful: most jobs are nebulous, ill-defined and
require people to obtain new skills as they work. That is, the rest of the
economy runs like the picture of the Valley HN likes to paint but with
different skill and problem sets (and pay scales). That means an economy with
lots of specialized workers, sure, but it also means lots of "office hackers"
who just find ways to get things done as they come up.

They'll be employed again, to do ill-defined jobs once demand recovers enough
to start needing people who can just make things happen.

------
ColinDabritz
Isn't this a variation on the 'broken window' fallacy? It's true that at the
moment it means less people employed, and that's certainly a problem.

In the long term, though, this means less work that has to be done, which
means more available labor for doing interesting new things.

It's similar to how the food (farming etc) industry used to employ 50% of the
population, and now employs closer to 2%. The answer isn't to try to find ways
to re-employ 48% of the population in the food industry.

Perhaps it's time to start investing that surplus in the future.

------
ojbyrne
So looking at this article -
[http://www.usatoday.com/news/nation/census/2011-01-06-us-
pop...](http://www.usatoday.com/news/nation/census/2011-01-06-us-
population_N.htm) \- my quick calculation shows that the US population is
growing at about 1.3% annually. Which means there's somewhat more than 7
million new Americans since 2008 (back of the envelope produces a number of 8
million).

Which, combined with the fact that GDP has barely recovered since 2008, kind
of invalidates the article - i.e its reasonable to assume that the number of
jobs has not actually decreased, but has stayed static, and that that is most
likely due to the depression.

~~~
thyrsus
This chart shows that there are now 5% fewer jobs than there were at the peak
of employment 34 months ago - the lines are scaled relative to prior peak
jobs, _not_ relative to population.

[http://cr4re.com/charts/charts.html#category=Employment&...](http://cr4re.com/charts/charts.html#category=Employment&chart=EmployRecessAlignedJune2011.jpg)

------
gasull
Unemployment happens because:

1\. Producing in China is cheaper, so companies move production and jobs
there.

2\. China sells to the US while the US sells nothing to China but dollars.

3\. This is possible because the US can print as many dollars as it pleases.

4\. And that is possible because we left the gold standard in 1971 and
unemployment has been growing since then, along with our trade and fiscal
deficit.

If we had gold standard:

1\. The US wouldn't print as many dollars as it pleases. and we wouldn't carry
a trade deficit.

2\. China wouldn't be able to sell so much to the US without buying something
back.

3\. Production and jobs would move back to the US because without trade
imbalance it wouldn't be possible to export so much from China.

~~~
william42
If we had gold standard: 1\. There would be deflation. 2\. Deflation would
mean that rich investors would hoard dollars instead of spending them, meaning
that very little investment would be done. 3\. China wouldn't be able to
produce as much, meaning that they wouldn't be able to build many factories,
etc. 4\. China would be a subsistence farming economy. America would be the
source of computer manufacturing, but only the rich could buy them.

------
nagnatron
I have a policy of not reading the article when it has such a BS linkbait
title.

------
stretchwithme
If technology is the cause of unemployment, obviously the solution is get rid
of all technology.

In fact, all unemployed people need to do is go to where there is no
technology. I'm sure they will find plenty of work to do.

The fact is that technology creates wealth. Cheap goods and services delivered
by technology raise quality of life even for the poorest way beyond even the
top dog in a technology-free society.

The availability of technology make it possible for work to produce a lot. And
the availability of capital makes it possible for workers to earn high
salaries. Workers can borrow money and buy the same technology and compete
with their former employers. So you have to pay them much more than you would
if there were no technology.

Technology gives everybody more options. Today, anybody can find enough money
lying around to match the average standard living people enjoyed 200 years
ago. All you need to do is collect bottles.

Unemployment is a problem in the labor market. In markets, prices go up and
down so supply and demand equalize. There are many things in the labor market
preventing this. The costs of hiring and later firing an employee are too
high.

The labor market for low wage workers won't function properly until these
costs are addressed. But many people think the solution is to make employers
pay even more. Too many people don't realize how markets work.

------
kds
_"No humans. Are you starting to see the picture? I know you want to be hired
full time by me. And I want to be doing my part. But please understand: I’m
running a business. I want to make profits. And these tools are letting me
make more profits by employing people only when I need them rather than
carrying them on my payroll."_

The Systemic Risk (grossly oversimplified):
\-------------------------------------------------------

A. -> all businesses in _all sectors_ strive to maximize profits while...

B. -> ...employing less and less people _nationwide_ with shrinking incomes
(part-time jobs, smaller paychecks, etc).

A. + B. => Economical collapse in a longer term: you can't have profits (esp.
growing profits) out of population being slowly reduced to poverty by
increasing pressing trend of partial or full unemployment.

P.S.

No way I buy this article and its arguments from a guy who runs 10-person
consulting firm and just writes occasionally. Most consultants (in any
disguise) I've met were charlatans - the proverbial borrow-your-watch-to-tell-
you-the-time - who were after a fat check for dubious services from a far
bigger company with _real_ production, capital, management, and workforce.

Sorry, but Joseph Stiglitz is far more knowledgeable on the matter.

And, by the way, just saying "we use _this_ , we use _that_ " and listing some
on-line applications and platforms is not convincing in itself.

P.P.S.

 _"I know you want to be hired full time by me.."_

Well, this is already delusional.

------
americandesi333
The article does a great job highlighting the stark reality of today's labor
market.

I was at the unemployment agency in silicon valley doing some research, and
they informed me that even though unemployment rate is around 9-10%, there is
this whole category of 'under-employed' and they make up 20% of workforce
population in silicon valley. Therefore, there are around 30% workforce that
are looking for jobs...

One part of it is training, but most urgent is the need to recognize value of
'informal' learning; thats learning outside the university structure. The ever
increasing costs of degrees has made it difficult for common Americans to
pursue or even justify college education. As a result, these people are not
developing skill sets through traditional means. These are the ones that need
help.

Once we start recognizing continuous learning (certifications, workshops,
books, events) as a medium to build a skills portfolio and get jobs, this
skills 'gap' will start diminishing.

We in the tech world can create tools to help answer these challenges. Help
people create their informal learning, let them track progress and share that
progress with the rest of the world. Thats what the unemployed need and the
employers will value.

------
sskates
I feel the downvotes coming, but this article is unbelievably tone deaf.

Who's the audience for the article? People who are unemployed and put out of
work because of technology that's displaced them? What's their reaction to
this supposed to be? "Oh I guess the author uses some valid reasoning to
demonstrate why I'm unemployed because I lack skills." Yeah right.

------
MatthewPhillips
We're seeing the beginnings of a transition back towards an economy of self-
employment. We don't need people to operate the hamster wheels any more. Over
the next 100 years more and more people will go into business for themselves,
having all of the tools necessary to do services for others cheaply.

------
arghplus
I hate when people use graphs like the one in that post "U.S. Manufacturing:
Output vs. Jobs January 1972 to August 2010" and lead reader to the conclusion
that the significant drop in jobs will not adversely affect the output. If you
try, you can also see that output, despite the recent jump pictured, has on
average started to stagnate and likely is on its way down. Now, I'm not a
full-on naysayer. Like the author, I also believe that good things will come,
but our economy is not out of danger and the answer is not just retraining of
the unemployed to become developers, which is one of the dumnest things that
I've heard lately. Our world is basically mostly f'd right now. The economy is
f'd. Jobs are f'd. Politics and even war and the military are f'd. But- things
will eventually get better.

------
bugsy
This is the second coordinated propaganda article this week claiming that the
economic collapse is to be blamed on software engineers and inventors.

Don't be fooled. The lack of decent paying manufacturing jobs in the US is
because of the lack of tariffs regarding imports from countries with despotic
labor conditions and no enforced environmental laws. Microsoft does not make
the stuff that WalMart sells which is imported from China.

But that is nothing compared to the money the government has thrown at
speculators calling themselves bankers who have committed the fraud of the
millenium, and then bailed out for their losses to the tune of twelve trillion
dollars. This is another massive hit to the economy. Resources squandered on
non-productive sociopaths and parasites.

------
Symmetry
Comparing the unemployment rate (still bad) to the recovering GDP is sort of
comparing apples to oranges, since total employment has to keep increasing in
order to keep up with a growing population. Its easy to imagine a situation
where our employment levels have tracked our GDP perfectly, and our high
unemployment is due to a recovery that took too long rather than a shift in
the economy. However, the actual data is consistent with his thesis, as shown
by this graph he should have used:
[http://data.bls.gov/pdq/SurveyOutputServlet?request_action=w...](http://data.bls.gov/pdq/SurveyOutputServlet?request_action=wh&graph_name=CE_cesbref1)

------
xal
Everyone who thinks this is thought provoking needs to read
<http://www.thelightsinthetunnel.com/> ( free ) to really understand the
magnitude of this problem.

~~~
mtgentry
I second this, great book.

Here's the author's blog: <http://econfuture.wordpress.com/>

------
pmr_
Isn't the main point here that we can sustain growth without actually
'working'? Is that due our definition of 'work' being flawed in that is not
actually tied to the real value of an economy or because we are approaching
post scarcity?

If the first was true millions would slave away every day without producing
anything of value at all and what we see now is just a society telling
everybody that you simply 'ought to have a job'.

In the second case we should worry about how to make such a society actually
work (distribute its wealth better).

------
BadassFractal
It's good to be a software engineer.

------
goldmab
Seriously? Everyone here agrees that unemployment is so high because of
_technology?_ Nobody remembers that the financial system nearly collapsed
three years ago?

------
guelo
The current unemployment is caused by a lack of demand. It is ridiculous to
think that a new unsolvable structural issue with the workforce showed up all
of a sudden in the last 3 years. Businesses have money, there is plenty of
capital, taxes are low, interest rates are low, etc. This is not a supply side
issue and it is not a "structural" unemployment issue. If there was demand
there would be full employment again.

~~~
wladimir
Well maybe the 2008 recession pushed companies to automate the jobs to cut
cost, and made that people that were barely holding on to their jobs now are
jobless. The underlying structural issue didn't show up all of a sudden - it
was there all along - but the recession was the final straw, so to say. Social
inertia and all... they simply got a push to do what they were already going
to do.

------
michaelperalta
Is this the new natural unemployment rate? No. Is the unemployment rate ever
going to return back to 5-6%, highly unlikely. Yes, similar things were said
after every revolution like the industrial revolution or the invention of
agriculture but what you have to realize is that once we got over those job
issues they didn't simply vanish. With more and more efficiency from these
revolutions comes more and more difficulties for the common worker who has no
particular skill set. The real issue that this latest recession displayed is
that people who are running these small businesses and even large corporations
alike have learned what running "lean" really means. They have now realized
their most bare essentials to make it through these hard economic times and
now that the bar has been set it will be incredibly difficult to lift it to
the previous level.

I had a discussion with a Fixed Income Desk Manager when I visited
MorganStanley a few months back about this very issue and we both agreed that
companies will never return to the previous level of employment. The job
market is fundamentally changing and this idea that everyone has that jobs are
around the corner I feel is naive. Could their possibly be an uptick in highly
skilled areas of the market? I think so but besides those areas I think
unskilled laborers are in for a difficult time. There will always be room in
the economy for people that can do hands on jobs because somethings cannot be
left up to technology alone i.e. construction or landscaping but beside these
things we are moving towards a more skilled society and I think the only way
the economy improves is if older unskilled workers eventually leave the job
market and make way for younger more technologically savvy employees.

~~~
xiaoma
> _I think the only way the economy improves is if older unskilled workers
> eventually leave the job market and make way for younger more
> technologically savvy employees._

I'm not sure I follow you here. In general, older employees are more skilled,
even in technological areas. It's true that younger people skew towards tech,
but you'll find few 20 year-old googlers with the skills of an average 40
year-old googler.

As someone with experience hiring people, I'd say that the main advantage in
hiring younger people are lower salary expectations, possibly more idealism,
and a small chance at them developing into a talent and while still staying
loyal to the company.

~~~
michaelperalta
Yeah older employees do tend to be more skilled thats why I specifically said
older employees who were not skilled leave the workforce, obviously people who
don't exist under this umbrella are highly skilled computer programmers that
work at Google, of course in their situation it is better to be older.

------
guildchatter
I skimmed the article and it says in at least two places:

"And it’s not just Microsoft who you can blame."

"It’s not all Microsoft’s fault."

------
denysonique
Technology and startups which make people redundant is very good, as this way
new resources can be easier produced and jobless people are forced for example
to start their own businesses/startups and solve other problems, making the
world an easier place to live in. Evolution

------
forgotAgain
Could be I'm having a bad day but I found the tone of the article to be
extremely condescending.

------
redthrowaway
>And we can communicate with our outsourced help, wherever they are, more
quicker and easier than before.

This, and quite a few grammatical whoopsies like it, has reminded me of one
thing: blogs.forbes is _not_ forbes. It doesn't have any editorial oversight
(or at least not much), so you can't ascribe to any story you see on it the
kind of gravitas or respect you would give a story in forbes. It's an opinion
page, very much like huffpo. While I largely agree with the article, it's
important to realize that its placement on blog.forbes is no more credible
than on x.blogspot. It may be reliable, or it may not be, but it should in no
way be thought of as having undergone the kind of editorial oversight that its
domain suggests.

------
vegai
Most of the things he listed as "good technologies" are actually horrible. Has
anyone been to a webex training that was even remotely useful? Salesforce?
Process management software?

------
danfried
Sounds like the dawn of a post-scarcity society to me:
<http://en.wikipedia.org/wiki/Post_scarcity>

~~~
Apocryphon
The article sounds like the opposite, really.

------
perfunctory
If the premise of the article was true, then high unemployment would be a
problem in all developed countries. This is apparently not the case.

------
misterbee
Forbes is not hacker news.

------
thisuser
Capital Vol. 1 has a pretty good explanation for this phenomenon

------
joshwa
Am I the only one who read that as "Blame Minecraft" ?

------
ldar15
Imagine a future society where food and shelter are essentially free. A single
person can farm hectares of land and produce food for thousands. Food is
distributed automatically. Shelter is built once and lasts for hundreds of
years. Humans spend very little doing things they dont want to.

I have thought a lot about this. My first question was, how do we get there
from here? With 9 billion people. With the poorest and least educated pumping
out babies as per genetic programming. Then I had the realisation: We are
already there. The problem is for those 8.9999 billion on the outside of it.

I've been looking at the poor immigrants living a few miles east, and their
eight kids, and thinking that they are the problem. In fact, my two kids are
just as much a part of the problem. If all of us making less than $5,000,000
p.a. would stop reproducing, we'd have our utopia in a generation.

------
ldar15
FTA: "GDP is as high as it was in 2008".

Without government debt spending, GDP has been flat for 15 years.

[http://www.johnmauldin.com/images/uploads/charts/050911-01.j...](http://www.johnmauldin.com/images/uploads/charts/050911-01.jpg)

Its like saying that your annual income rose from $100,000 to $150,000 because
you count the $50,000 you spend using credit cards. This is absurd. Your
income is still $100,000, (oh but now you spend $12,000 a year in interest
too).

There's more to write about the changes in society, but this GDP fallacy must
be corrected.

------
jpr
> We know this is true in our own lives. Things are lasting longer and working
> better.

Is this guy living in some parallel universe where planned obsolescence of
overly complicated and fragile products isn't the norm?

------
eurohacker
one would think that unemployed people would be motivated to study engineering
to get a job,

but that does not seem to be the case ..

------
barista
Upvote for anything that blames Microsoft! ;)

------
slimshady
incorrect and stupid article especially the title

------
natmaster
This is why I'm so against the luddite regulations of liberals - they stagnate
innovation. Obsession over jobs is a terrible mentality - restructuring is
extremely healthy and necessary part of economic growth, and trying to stop it
is only going to hurt things.

People should be learning skills that are actually useful instead of doing
robotic tasks all their lives. Robots will soon be replacing robotic people.

~~~
jameskilton
Your statement is disjointed and impossible to follow. Both parties are
obsessing over jobs, and both parties have different ways to "fix" this
problem.

If you want to discuss regulations, lets discuss how the lack of regulation
led to the housing bubble and the near collapse of our entire economy.

If you want to talk about "robotic" jobs, please discuss how this is supposed
to change? Do you want the government to persuade people to take more skillful
jobs (and if so, doesn't that go completely against the conservative ideals?)?
Do you want people to _want_ to be in more skillful positions? How do you deal
with the manufacturing workforce that had stable jobs for 30 - 50 years and
now have nothing?

What is it you are actually trying to say here?

~~~
natmaster
No straw men please.

I don't care about political parties, why is this suddenly a political
discussion about what the government should do? I said the government should
stop stifling innovation, not stifle it in a different manner.

If people don't want a job that's their problem, not mine. I don't see why I
should be worrying about people not interested in their own prosperity.

And wow, way to make blanket statements that are backed by the same hokus
pokus logic that lead to the housing bubble. Maybe instead of listening to the
loonies that said our economy was doing great, you should listen to the people
that actually were trying to stop the housing bubbled before it happened:
<http://www.youtube.com/watch?v=2I0QN-FYkpw>

~~~
clebio
>I don't care about political parties, why is this suddenly a political
discussion...

Probably because your first half-sentence of your original comment was itself
a political discussion: "This is why I'm so against the luddite regulations of
liberals..."

