
America’s Dazzling Tech Boom Has a Downside: Not Enough Jobs - collinmanderson
http://www.wsj.com/articles/americas-dazzling-tech-boom-has-a-downside-not-enough-jobs-1476282355
======
baron816
For all of human history, people have had to deal with a scarcity of
resources. Yet in the last few years, that has changed. Our problem is not
that we can't make enough stuff for everyone to be happy, it's that we're
still acting like that is the case.

The age of inflation is over because producers in nearly every industry (there
are a few notable exceptions) can absorb almost infinite demand for their
products. The sooner governments and central banks accept this, and the sooner
we move past the notion that a "job" is not an end but a means to an end, the
sooner we can end poverty, achieve high levels of growth, and overcome our
fear of globalization and technology.

~~~
jganetsk
Citations needed.

I don't see any fundamental change in scarcity of resources in the last few
years.

Additionally... to say that nearly every industry can absorb almost infinite
demand for their products is absurd. Near infinite claims need near infinite
evidence. Can we produce near infinite food? Can we produce near infinite
precious metals?

There are certainly some very interesting characteristics about our economy
right now, but this is not the right articulation. It's more that we are stuck
in a liquidity trap, and we can grow our economy without increasing demand on
the labor market.

~~~
toomuchtodo
You, as a human being, can only consume so much water. So much energy. So much
food. Its already within our means to feed everyone (green revolution),
shelter [1] everyone, and energy? Please! Enough sunlight hits the Earth in 5
minutes to power the world for a year (you will never see the price of power
go up again [2] [3], renewables are simply too cheap now, and will continue to
be deployed at a rate somewhere between linear and exponential, pushing out
generation sources that have a consumable fuel with marginal cost).

Surely we'll need to drive down the cost of healthcare and housing [4];
that'll be tough and expensive to solve. But everything else? Its all clean
energy, automated manufacturing, and bits across a wire.

We must choose to provide for everyone not because it is easy, but because it
is hard.

The economy does not need to grow further; growth is not the problem,
distribution is ("The future is already here — it's just not very evenly
distributed." \-- William Gibson).

[1]
[https://www.youtube.com/watch?v=4YcrO8ONcfY](https://www.youtube.com/watch?v=4YcrO8ONcfY)

[2]
[https://www.google.com/search?q=energy+deflation](https://www.google.com/search?q=energy+deflation)

[3]
[http://dqbasmyouzti2.cloudfront.net/content/images/articles/...](http://dqbasmyouzti2.cloudfront.net/content/images/articles/bernstein-
solar-coal-lng.png) (TL;DR Cost of energy from solar is dropping faster than
Battlestar Galactica through a planet's atmosphere [3a])

[3a] [https://youtu.be/JdkCpnGMyGw?t=6s](https://youtu.be/JdkCpnGMyGw?t=6s)

[4] [https://i.imgur.com/hJewEUY.jpg](https://i.imgur.com/hJewEUY.jpg)

~~~
intended
> The economy does not need to grow further

This is pretty much false, because on the one end we have people in poverty
who will hopefully move out of it, which will cause growth.

On the other end, most people on this forum are involved in finding new ways
to unlock "value" and thus create new wealth.

The economy is not a pure zero sum game.

~~~
crimsonalucard
>The economy is not a pure zero sum game.

Why do people keep saying this? This is a huge misconception. The economy IS
zero sum.

Energy and physical resources are limited. When one person uses a limited
resource, than another person will be unable to use that same resource. This
is a Zero Sum.

I've heard people say that seemingly "unlimited" products like an idea, a
painting or an abstract idea can be created out of thin air and because of
this the economy is not zero sum. Well guess what? Have you ever heard of an
economy that can exist while thriving only on abstract ideas and pieces of
art? No. All economies thrive on energy and physical resources while
abstraction only sits on top of these things as a luxury. AKA: A farmer can
feed himself with his own crops, but an artist cannot survive without trading
his painting with a farmer for food.

Another cop out people use is that although the sun is technically a limited
resource (it will burn out one day), it is seemingly unlimited because it
outputs more energy then humanity will ever need or comprehend. This argument
is flawed too. We are limited by the amount of energy we can extract from the
sun. There will always be a limit to the amount of energy we extract from the
sun due to fundamental limits in technology and physics.

It gets worse than this, because technically speaking you are correct.. the
economy is not zero sum, it's actually a negative sum. When you add up the
numbers there will always be a net loss for all economic actors. The second
law of thermodynamics dictates that even if an economic agent doesn't extract
or use a resource, the resource on it's own will eventually, slowly degrade
into an unusable state.

~~~
mhluongo
I have a saw, you have a log. If we bring our resources together, we can build
something more economically valuable than the sum of the parts, and we both
benefit. That's not a zero sum game.

~~~
crimsonalucard
It is zero sum. Did you even read past the first sentence of my post? The
situation is much more complex, and unfortunately I can't elegantly shoot you
down with one highly misguided sentence as you tried to do for my argument.

Let me spell it out for you in a way you can comprehend:

1\. There is a limited amount of logs that the earth can produce.

2\. There is also a limited amount of metal that the earth can produce.

3\. There is also a limited amount of energy that we can extract from the
earth or the sun.

4\. Therefore, there is a LIMITED amount saws I can build with metal and
energy.

5\. With logs and saws being limited, then that means there is also is also a
limited amount of "things" that can be built with the logs and saws.

What this all means:

The totality of "things" that can potentially be built with limited resources
is limited because resources are in itself limited.

This totality can be referred to as our economic pie (or cake). Once a slice
of pie is extracted and eaten another person cannot eat it. That is zero sum.

See cake example in the very short first paragraph:
[https://en.wikipedia.org/wiki/Zero-
sum_game](https://en.wikipedia.org/wiki/Zero-sum_game)

~~~
antisthenes
"It's not zero-sum" is a popular and lazy fallacy used by economically
illiterate people to argue against welfare policies.

It goes hand in hand with the just world fallacy, which, in conjunction is
used to justify the position of the currently capital-poor class.

E.G. Because the economy is not zero-sum, those people would have been able to
produce wealth for themselves with the same ease as the people who are
currently in possession of wealth/capital.

~~~
opo
>...used by economically illiterate people

Please don't insult people on this forum.

In terms of your statement: >..."It's not zero-sum" is a popular and lazy
fallacy

Simply look at the simplest case. Unless coercion is involved, if I make a
trade with someone, the only reason I do it is because I am better off because
of the trade or I wouldn't do it. The same goes for the other side of the
trade. So we decide to do a trade and both of us are better off than we were
before.

~~~
antisthenes
First of all, it's really not an insult and more of a statement.

Barging into a thread and yelling "economy is not zero sum" is the CS
equivalent of doing the same and yelling something like "X is not a good
programming language" with no explanation or context. Wouldn't you be
considered illiterate in that programming language by someone who uses it?

> So we decide to do a trade and both of us are better off than we were
> before.

In a vacuum, yes. However, consider that no actual new goods have been
produced. Does your example work in the case when one party is unable or
unwilling to see the benefit of the trade? Does it work when no new goods can
be produced by one of the parties, like in the example of land?

If you want a more detailed statement - in the _short run_ , everything in
economics is essentially zero-sum. As we progress towards a longer time frame,
it shifts to being non-zero sum, with the exception of intrinsically limited
resources.

> Simply look at the simplest case.

Yes, most users of this site look at Economics as some series of simplest case
scenarios. I'm standing by this statement until I see evidence to the
contrary.

------
jrockway
This is why I think I'm in favor of basic income. With robots doing all our
labor, "a job" is not how we can support basic needs like food and shelter.
(Money still changes hands with robots doing all the work, so we can tax that
and use it to fund basic income for everyone.)

This assumes that people want a job because they want the income, not because
they want to do something rewarding all day. Not sure how to solve that
problem.

~~~
jfoutz
The Milton Friedman model gave you a tax deduction twice as much as the BI
check. So, if you're getting $500 a month in BI, but you decide to work a
little, up to $1000 dollars in taxes is deductible. The idea is, you _always_
make more money by working.

So maybe you sell a painting for $500, 20% taxes would be $100. At the end of
the month, you wind up with $450 from BI and $500 from the painting (because
you can deduct all the taxes at a 2 for 1 rate).

So maybe you're a fancy doctor that makes $10000 a month. to keep things
simple taxes would still be 20%, $2000. You get to deduct $1000, from those
taxes, because you didn't take any BI benefits.

One of the things i think is great about it, it provides a soft launch for
anything you might want to do.

(I think you know this, but some people sort of miss the "it's better to work"
part of BI)

~~~
prostoalex
> provides a soft launch for anything you might want to do

Similar argument gets thrown a lot when advocating a minimum wage raise, for
instance, and on surface it seems clear - a person with $11 in his pocket has
more buying power than someone with $10.

The question is why hasn't that previous wage increase cause a long-term boom
in economic activity? The answer is that eventually it gets priced in. Whether
into the cost of housing, cost of food, cost of daycare, cost of healthcare,
newer car or a cable package that now has Showtime.

The retail industry is quick to anticipate any cash influx and appropriate not
only immediate cash, but future cashflows as well, which explains so many "tax
refund day" sales at mattress stores and car dealerships come April.

~~~
jfoutz
Because $1 * 77 million workers * 2000 hours is only $160 billion dollars? The
department of labor said "Research suggests that a minimum-wage increase could
have a small stimulative effect on the economy as low-wage workers spend their
additional earnings, raising demand and job growth, and providing some help on
the jobs front."

I don't think anybody claimed there would be a boom. BI on the other hand,
might. With minimum wage you're still spending all day working. it's tough to
be enthusiastic about much of anything beyond a book or a video game (or it
was for me).

I would guess A few people would do nothing. Most people would try a bunch of
different stuff and kind of suck at it. A few people would have moderate
success. And finally the occasional superstar. Pretty much the same expected
outcomes as venture capital, but way way more breakevens.

 _edit_

Oh, you're making the argument that because the cost of labor increases
everything gets more expensive. That's true, but it's in proportion to the
labor cost of the thing. Tomatoes are labor intensive, so they cost more.
Pasta is mostly automated, so it doesn't go up as much. Relative pricing
changes, making books and computers cheaper in terms of tomatoes.

~~~
gozur88
Tomatoes are actually a good case study for wage increases. The last time we
had a serious effort to curb illegal immigration we got the usual "crops
rotting in the fields" rhetoric from growers, but somehow they lost the
political argument. Wages went up due to the resultant labor scarcity.

So growers introduced Roma tomatoes, which are _not_ labor intensive because
they can be machine harvested.

[https://www.youtube.com/watch?v=R3EpFTyN26E](https://www.youtube.com/watch?v=R3EpFTyN26E)

~~~
prostoalex
The growers still managed to squeeze in a bunch of exemptions from the minimum
wage law

[https://www.dol.gov/whd/regs/compliance/whdfs12.htm](https://www.dol.gov/whd/regs/compliance/whdfs12.htm)

------
mc32
Saying tech doesn't create jobs is like saying Petroleum is only about fuel
for cars. It creates ancillary jobs [people making apps, people selling phones
and data plans] but also improves the aspects of many other jobs [like
addressing disasters with up to date information, or ability to monitor a
protest which could turn violent, or facilitating access to education for
people who would not have had the chance, otherwise] There are a lot of
benefits elsewhere...

That said, automation in many fields will finally claw away low skills jobs
from people. I don't think we, as a society will dodge that bullet this time.
We may come up with job substitutes, but we won't be able to do "value-add"
indefinitely. And, eventually, this will filter down quickly to poor countries
too [unless they close the borders to technological change, but I don't see
that happening, their oligarchs will make sure they also can bring that tech
in-house]

~~~
jomamaxx
It's very fair to say tech does not create as many jobs as other industries.

Also - tech removes a lot of jobs via automation.

I never, ever talk to a person at a bank unless I have to.

'Mortgage Loan Officer' is almost becoming a thing of the past, so automated
these days.

------
ocroso
I disagree with this entire article. Every company I've worked for in the tech
industry has had incredible difficulty finding talent/people to fill the roles
we had. Also, there are more software companies than Google and Facebook.
Also, I don't see salaries dropping anywhere for these jobs, I see them going
up. Sure, help desk is the new car mechanic, but that happens in every
industry. Now, you probably want to be a developer or DevOps guy to make what
help desk made in the 90's. The real issue seems to be exploding cost of
living making earning more feel like earning less. And I believe companies
that are willing to allow remote work are helping combat that by giving
workers the freedom to move somewhere cheaper.

~~~
abysmallyideal
It is a scam. They're not looking to fill in those positions. They just open
those positions up, under no obligation to hire, then report to their gov
censor that they have created x amount of jobs without the intent of filling
those positions.

When they have to fill in the positions, they complain about the lack of
"talent and skill" in filling the roles and then push for h1bs to fill with
cheaper Indian and Chinese workers.

Every once in a while they'll fill it with a techbro "hip to the game". The
entire thing is a complete hoax.

~~~
wu-ikkyu
>They just open those positions up, under no obligation to hire, then report
to their gov censor that they have created x amount of jobs without the intent
of filling those positions.

Are solicited but unfilled jobs counted in "job creation" statistics? I did
not know this.

------
jupiter90000
Does WSJ writer get to decide how many jobs should be 'enough' for an
industry? Weirdly written article, in my opinion... and the writer seems to
cherry pick anecdotes, 'see now there are robots doing things in Amazon
warehouses! Now we can't have enough slave labor sweatshop type jobs in the US
to go around!'

~~~
ocroso
I agree, I kind of feel like they aren't in tune with the actual reality of
the industry. In my experience, there are tens of thousands of jobs out there,
just not enough people with the qualifications to fill them.

------
anupmm
Avoid Paywall through GN:
[https://www.google.com/search?q=America%E2%80%99s+Dazzling+T...](https://www.google.com/search?q=America%E2%80%99s+Dazzling+Tech+Boom+Has+a+Downside%3A+Not+Enough+Jobs&ie=utf-8&oe=utf-8#q=America%E2%80%99s+Dazzling+Tech+Boom+Has+a+Downside:+Not+Enough+Jobs&tbm=nws)

~~~
balls187
There is a "web" link at the top of this page for that reason.

~~~
randcraw
Does nothing. Still paywalled.

------
abysmallyideal
The "American dazzle tech boom industry" is a scam and a hoax. It is a
government protected endeavor by government protected and connected
organizations.

------
CodeSheikh
I feel like the author stressed too much on the word "Tech" without
differentiating much between the very basic nature of SW-Tech and HW-Tech. In
hardware assembly lines you need more workersa and bodies, let them be in the
USA or China or Taiwan. But for SW once you have developed and refined your
algorithm, routine or process it does not need to have multiple people
handling, managing or maintaining it. It can be replaced but let's be honest
such replacement does not happen for quite some time at enterprises, in some
case it takes years. My point being, yes big SW companies like Facebook,
Google, Twitter etc did not create enough jobs because they produce and
maintain software, not actual physical products (Google until recently). Yet
they have sucked a large portion of money from the economy (Think of ecoonomy
as a shared pot with fixed $ coins in it). The problem is with the financial
and employment regulators for being short sighted and not predicting this
trend lets say 15-20 years ago. It is a bad unbalanced financial "equation"
when weight on one variable is too much and on the right one it is too low. A
company with $X amount of positive revenue must invest a certain portion back
into the economy. In this way we can maintain a economically balanced society.
Also, people need to start getting serious about continuing education. Skills
learned and obtained in the 80s or 90s is not necessarily going to be
employable in the year 2016.

------
lvs
It has another related downside: it's not a strong driver of economic
productivity, as the President recently pointed out [1].

[1] [http://www.economist.com/news/briefing/21708216-americas-
pre...](http://www.economist.com/news/briefing/21708216-americas-president-
writes-us-about-four-crucial-areas-unfinished-business-economic)

------
rajacombinator
Not enough jobs is not a consequence of tech, it's due to globalizing low
skill labor. Which is great.

------
collinmanderson
I know, I know. Paywall. Ohh well.

~~~
graton
Click the link near the top of this page which says "web". Basically does a
Google search and then you can get in if you click the first search result.

~~~
collinmanderson
I never saw that before. Thanks.

------
Alex3917
The amount of fossil fuels it takes to produce each calorie of food is
increasing exponentially over time, so many scientists expect that eventually
we'll need to start replacing machines with human labor.

While this will probably happen to some extent, I also suspect that AI will
soon make urban permaculture viable. E.g. the main reason why all the trees in
our cities aren't edible fruit and nut trees is because they make a huge mess
and attract rodents when they fall on the sidewalk. But if you were creating a
new city today then it would make sense to heavily incorporate edible
landscaping, and in twenty years when it's actually at peak productivity we'll
have inexpensive autonomous robots to clean up the mess and periodically check
the soil for contaminants or whatever.

~~~
dsfyu404ed
citation very much needed

~~~
Alex3917
[https://www.ncbi.nlm.nih.gov/pubmed/12178986](https://www.ncbi.nlm.nih.gov/pubmed/12178986)

~~~
Animats
That's from 1993. Needs an update.

Agriculture has been reducing their inputs in recent decades. With precision
farming and a lot more data collection, farms use less of everything. Using
lots of water and fertilizer is out.

It looks like we're not going to run out of energy. Solar and wind have now
become Big Solar and Big Wind, and fight it out with Big Oil and Big Gas. (Big
Coal went bust.[1]) Electric cars aren't a joke any more. We can still do
nuclear if we have to. We're more likely to have metal shortages than energy
shortages.

[1] [https://www.washingtonpost.com/news/energy-
environment/wp/20...](https://www.washingtonpost.com/news/energy-
environment/wp/2016/04/13/coal-titan-peabody-energy-files-for-
bankruptcy/?utm_term=.003968a26f35)

~~~
dredmorbius
The trends over the 20th century generally fit the narrative of exponential
growth in energy consumption. Major drivers have been fertiliser (especially
nitrogen fixation via Haber-Bosch), farm equipment (especially considering
_both_ embodied energy of manufacture plus fuel use), and irrigation costs.
Two additional factors are the growth in consumption of both animal products
(eggs, dairy, poultry, port, and beef, roughly in that order of increasing
feed:food conversion cost), and in the consumption of non-staple foods: fuits
and vegetables are vastly less energy dense than corn, wheat, rice, and
soybeans, and hence have a higher energy cost:calorie ratio.

Vaclav Smil's 1994 _Energy in World History_ has an excellent exposition of
these trends generally, though ending 22 years ago. Manfred Weissenbacher's
_Sources of Power_ updates the story to 2009.

It's also helpful to realise that sub-Saharan Africa _still_ has very little
mechanised agriculture (fewer tha 1 million tractors per Weissenbacher), and
little fertiliser or pesticide use. Even in the US and Europe, nitrogen
fertiliser use didn't take off until the 1950s -- for the first 30 years or
so, Haber-Bosch were largely in the munitions business.

Since ~1990, energy productivity of ag seems to be increasing (that is, less
input energy to output crop) in the US and EU (USDA and DOE have several
reports). Global data and graphics are much harder to find, I don't know what
the situation is.

