As the article points out the retail job crush is exactly because the Factorys closed, nothing more magical than there is less GDP so there is less work. Previously those factory workers bought things at the store, but now that the factory is closed they can't (or they cut back) and the stores don't have some magical source of 'outside of market' money.
They call this out in a couple of places but they never seem to completely connect the dots, there is "He renovated the first floor to attract customers from farther away, customers who might have more money to spend and more places to go than Johnstown." to pull money from towns further away, or "But fewer people can afford his products now that the good jobs are long gone, and Mr. Apryle has had to make adjustments."
It's not Amazon, its not 'big box' chains, its that the city no longer has a production base and so the fraction of GDP this space used to produce has gone away.
> It's not Amazon, its not 'big box' chains, its that the city no longer has a production base and so the fraction of GDP this space used to produce has gone away.
I disagree. In my opinion this development is very much related to Amazon and e-commerce in general.
I'm living in a rural region that saw a lot of retail disappearing, yet I really don't see people cutting back or buying less. They just buy elsewhere. And who could blame them? Researching products online provides way more information than your small store around the corner could offer. Selection is vastly superior on the internet - not just on Amazon and big brand stores, but countless of stores catering to niche interests. Those have never been around here.
However even general goods like clothing, mainstream tech, etc. - very often I know what I want and find myself just as certain that it's not available locally. Just the other day I needed a new vacuum and decided to get a specific Miele model. Before ordering I wanted to see if I could get it immediately in a 30 minute drive radius and contacted several stores that were featured on Miele's list of retailers. Poor websites all over the place. So I sent an e-mail to all of them, asking if could come by later and pick up the specific model if it's available. No store replied within the day, none of the stores had the model which I was looking for, which wasn't very niche either. Didn't matter - later that day I ordered from Amazon and had it delivered the next day via Prime.
I'm sorry, but when it comes to information, selection, availability and convenience there's simply no local competition for e-commerce.
Amazon like most consolidators can still prosper amoungnst the ruins.
I grew up in a rural mostly farming community. The farming part started dying when I was in school in the 90s. Now it's throughly dead. People are still surviving, but the "rich" folks are teachers, cops, and government workers who commute an hour to the state capital.
When you drive though you can see the decay -- unpainted house here, barn with a hole in the roof there, dollar general store popping up over here. It's the inner city replicated in the countryside. There's more misery than there was 20 years ago.
it's interesting that the 'rich' folks are government workers. maybe that's the employment model of the new normal in a LOT of places.
it makes me wonder if, really, that's the model that has always been the norm, historically.
i mean, when i think about the civil service jobs in the UK, or the true original civil service jobs in China going back centuries, i see a system where the brightest, most motivated minds compete for a limited number of government job posts - because those are the best jobs available.
occasionally in history, there are times when the private sector offers paths to affluence for the masses, but mostly, that's not what happens. mostly, we're trying to get a legally protected, high-benefit position in government. most of the time, historically, that's the most lucrative path.
Gov't workers can't be outsourced overseas and they're usually able to pay well. This is why after an industrial base is wiped out, the only people making a decent salary work for the state.
But these towns are going to keep getting wiped out until we free up the concentration of capital that favors dense urban areas
> until we free up the concentration of capital that favors dense urban areas
What is this supposed to mean? Is "favor[ing] dense urban areas" somehow wrong? What dark force is driving this concentration of capital? What is necessary to free it?
Consolidation in finance and other sectors has made it difficult or impossible for small and medium business to survive. As regional banking dries up, its dramatically more difficult for firms to get loans, even for working capital.
There's no reason for large banks to lend money. They can print money via the Fed to get their assets and lend money to the highest quality borrowers or those with explicit government guarantees. The traditional regional banking model was much better for everyone.
Are you (and kesselvon) suggesting that otherwise viable businesses are getting wiped out because they are in small towns? And the reason for that is that regional banking is "drying up"?
That seems improbable to me, especially at a time when so much capital is looking for a decent return
Also, as I asked, what does this have to do with "dense urban areas" being "favored"?
Couple of years ago I was wondering why the hate on government workers in places like this. And then had the thought. My dad worked for the government as an engineer. But he made probably 80% of prevailing bay area wages. Thought is once you get out into less flush parts of the US the government jobs probably pay much better than prevailing wages. Breeds resentment.
It's not only in places like that. Even in Los Angeles, some residents have the feeling that government workers are a kind of protected elite class, mostly insulated from the free market's demands for ever increasing productivity and efficiency, global competition, economic cycles and the high cost of health care and retirement.
I wonder a lot about this. Everyone I know in my hometown works in some sort of local service industry -- for the most part city government, healthcare, or construction. The factories are all closed down, there's very little office space, and it's a bit too far from the regional capital to commute. I really wonder what economy all the service workers are there to support.
This is exactly what I thought too: a drop in local GDP has caused a drop in aggregate demand for consumer goods and services. The only proviso is that some of the remains demand is served by out-of-county suppliers, including e-commerce operations that obviously have the advantage of convenience for the local consumers on account of their logistics.
Well you can't discount online shopping either. But yeah the local economy is a system set up like that. You have a main industry which has most of the money which then trickles down into the rest of the local economy via jobs at the big companies with the money. When those big companies disappear then there is little money left in the system. These sorts of towns soon disappear as young kids leave the city when they grow up to other cities with big companies that can give them adequate salaries.
It's a vicious feedback loop that arguably does involve Amazon and other global retailers / manufacturing chains - although I wouldn't say they're at fault.
Consumers are locally optimal buyers, we go for the cheapest goods on the market. Over time, international imports have been undercutting America-produced goods. At first, it was American companies that simply outsourced raw materials... then manufacturing, assembly, service centers, and now even R&D. All because consumers were chasing the locally optimal ROI.
Rational consumers were undercutting their employers, which in turn forced their employers to cut labor, wages, or automate. That steadily drives down the purchasing freedom of employees, like a frog in a slowly warming pot of water.
In turn, consumers are even more driven to seek out the cheapest goods, which are still international, and which continue the feedback loop that ultimately undercuts themselves. Eventually, we end up with an economy that cannot distribute wealth among the middle/lower classes due to large labor market inefficiencies (such as the difficulty adults face cross-training into/between knowledge-based fields)... All while the 1% and 0.1% continued building up tremendous wealth, buying a disproportionately loud voice in politics and public opinion.
Amazon and Walmart are centralized manifestations of this issue, but no one person is to blame. This problem has been building for decades as America has refused to publicly invest in itself.
As I see it, we need significant public investment in order to get back on track:
* Infrastructure (water, energy, transportation esp. light rail), creating short-term jobs that improve regional economic competitiveness and reduce consumer debt
* Higher education + adult cross training, restoring an efficient free labor market and voter literacy
* Advanced R&D (incl. but not limited to space+energy), researching and commercializing new fields of industry to replace automated/exported ones
We don't need to raise taxes. Start by cutting back excessive military funding.
For perspective, we just spent ~$17.5 billion/10 years on one ship -
the USS Gerald Ford supercarrier. Its defense ROI is questionable; counter-terror operations and force-projection against lesser states does not warrant a supercarrier (renovated carriers / allied regional airbases are sufficient), and potential threats punching at our level (China, Russia) would employee asymmetric warfare that makes carriers irrelevant (think: smart missile barrage, fast attack submarines, or maybe just propaganda).
$17,500,000,000 could put 523,000 Americans through a 4 year private education or 1,750,000 through public state colleges. This sum is also equivalent to 30 years of fusion research funding, tripling the Seattle Link network, and 8x the the BART expansion to Santa Clara.
Perhaps you have better examples, but these already offer better ROI than a war ship. There's plenty of fat that can be trimmed or reallocated from our $598,000,000,000 / year federal military budget.
Just sending 2 million people to college does nothing. If you are of average or below IQ, you still will be when you have a degree. And then what?
Every human cannot be a knowledge worker. Some will be bad at knowledge work.
Just slapping a college degree on someone who used to work in a factory can often be totally useless. Obviously there are some that can benefit. But many cannot.
We need quality, not quantity. Plenty of shitty CSE students graduate with FAFSA, and plenty of intelligent adults locked out because they can't afford the 4 years.
The answer isn't a blanket grant, but part of the answer is more funding for higher education.
And this gets us back to the ideas which advanced the Stanford-Binet IQ test.
That's not a criticism, simply an observation.
I'm increasingly cognisant of the opportunities, and limits, of education. It's not a free pass or magic. It costs some resources, though we might well consider if overprovisioning is better than under. What is taught, and to whom, is also a major element.
Our military is a training and infrastructure / R&D investment. Redirecting that into education won't create jobs, it'll just train more people for jobs that don't exist, in some cases because they've recently been cut.
Military is a very inefficient and focused r&d investment, it is definitely not a public infrastructure investment.
Redirecting to education will lower barriers of entry to high-skill labor, eg helping welders cross-train into software. This is not a proposal for free education for everyone to study anything... i said public investment, not donations
From what I've seen, software engineers cross-training into welding would have a better ROI. What's a welder who can program's hourly rate look like? Better than a programmer who can weld.
It's a big economy and changes take too long trickling down to those forgotten rural towns once part of the American economic engine.
I'm pessimistic that the federal or even state governments have the will to do anything about it -in terms of policy to effect change.
Not that top down change always works (Japan for example, has made many, many half-hearted but ill-conceived attempts at restarting their growth engine) but smaller nimbler economies have been able to manoeuver economic obstacles (like Taiwan, Singapore and S. Korea) whereas others have stumbled and fumbled (Malaysia, Mexico).
That said, we need to try something. Trump tapped into this angst but does not look like he (or the party) will deliver in the least. Never the less, the issue is not going away and will only become more pronounced. Someone will have to do _something_ about it. People will get upset and more radical elements will be elected till someone begins to take notice and does something substantial about the economic decline of the part of the middle class which got by on medium skills.
Most of those small rural towns -- and I grew up in one -- have zero reason to exist besides inertia. There's fewer skilled workers there every day, a combination of:
* stupid, uneducated people / skilled people moving to population and manufacturing centers
* devastation of unions which, whether you like their politics or not (I do!) often ran comprehensive training programs
* the deskilling of the blue-collar workforce in America in order to boost corporate profits by outsourcing manufacturing
* a decline in infrastructure, including a reasonably educated workforce, teachers + schools (see eg in WI Scott Walker cut many teachers salaries by north of $10k/year. Totes weird they keep losing skilled teachers, eh?) but also roads, power, etc
Even if we were to fix the deliberate policies pushing outsourcing of manufacturing, I still see no reason it would return to places like rural Wisconsin. It would end up, rather, eg on the outskirts of Chicago, because of the same reason tech employees concentrate: you go to where there are skilled employees. Plus networks of supporting manufacturing businesses are close, good transportation and infrastructure, etc. And unlike tech, which may or may not eventually get serious about remote work, manufacturing can't do that.
NB: This isn't the answer I would prefer, but it does have the benefit of being the truth. Also, while Democrats have not been a shining light in terms of supporting good jobs for people without a college degree, voting for Republicans is a pretty astoundingly stupid response.
I hate to say it, but it seems to be too late. I predict growth in discontent and discord, but little else ahead for the American experiment. The USA would be very lucky to fall as softly as Japan has since the 1980s. There's a complete vacuum of long-term thinking in America right now, and that erosion of thoughtful strategies will accelerate as desperation sets in. It's a shame to see such golden opportunities squandered, but humankind will have to adapt to the lessons from the fall of two Cold War superpowers if there's hope for a peaceful and prosperous future.
As an open source programmer on projects with thousands of users and no income I find this hilarious. Just donate to people who are already making shit instead of inventing these bizarre schemes.
Do the changes need to trickle down to the dying towns?
They are forgotten because they no longer have much value to people outside the towns. The town itself exists as a conduit through which people channel their energies together to bring value into their lives. If the conduit collapses, if the factories and the mills go, how can the people survive? The raison d'être of the communities has long passed away, but the community itself hasn't. Put them out of their misery, please!
It is only by some miracle that these towns begin to bring value to the economy again (and not simply by the unsustainable method of spending and consuming), but until that happens they will continue to rot. Their minds can exist in the global hive-mind that is the internet, but their physical bodies need physical maintenance. And yet they exist too far away and too isolated to make it economically viable to do so.
The major cities appear to have monopolized the exercise of human labour for value. Whereas early homo sapiens have loosely organized communities that work to maintain a loosely comfortable life, modern cities have concentrated human effort like a parabolic reflector in order to generate luxuries beyond the reach of mere casual cooperation. These small towns, without the buttress of a major industrial mill or any economic output at all, captures none of the benefits of living in a modern world.
The consolation to the community that hopes to see the itself continue is that these towns are surprisingly hardy, producing generation after generation of brain-addled drug addicts. My sympathies are not with them.
I grew up own one of these rural "rust belt" towns and it amazes me that it's still there, and that there are still plenty of people there doing god-knows-what. Once in a while I go home to visit my (retired) family and I wonder what in the world keeps all these people in these dying pseudo-towns, jobless, hopeless, angry at the world, addicted to meth, and blaming their lot on "the liberals". These communities are dead and they don't even know it. Maybe they do know it and they're just stubbornly clinging to a setting and lifestyle that has no future.
The breakdown occurred because we no longer prevent mergers and acquisitions on the basis of regional monopolies or impact on local economies, but on whether consumer prices are increased or decreased.
Capital accumulates, and if you let it, it will suck everything out from the country and suburban areas and concentrate it in the major cities. The decline of rural America has everything to do with the flows of capital and not a lot to do with whether small towns are sustainable.
capital goes where labour goes, and labour goes where capital goes. it's easy to forget that capital is not simply money but everything else that is not labour - buildings, facilities, machines, computers, etc.
this is not a central planned economy. people organize where they want to organize and it turns out large cities are increasingly where people want to do that. people - the ones who choose neither to move to rural communities nor to bring custom - and not capital, are the systematic destroyer of local communities.
mergers, like large cities, are just another symptom of humanity's unsatisfiable desire for efficiency. competition good, cooperation better.
It's fairly obvious that less (or no) disposable income leads to less consumer spending, which leads to fewer jobs, which leads to less consumer spending, which leads to.... That is exactly the ongoing story of the vanishing middle class.
The lack of demand snowballs and branches out to impact many other things the exact same way that a strong increase in demand spreads out to impact other things.
With a predominantly consumer driven economy, eventually all of this will catch up and be a significant drag on GDP at best, though it'd be easy to argue we're already at exactly that point.
So, what happens next and what do we do about it? If only we had some sort of large team of people who were elected to solve this kind of problem, and if only they had some sort of historical periods of widespread prosperity to reference and model policy on....
> and if only they had some sort of historical periods of widespread prosperity to reference and model policy on....
Isn't the problem that no one can agree what historical prosperity looked like especially when thinking about the consequences of the policies that lead to the prosperity.
Was it the 1920's, 1950's, or 1980's? 2000's? Or the age of the Robber Barron's Or some other time?
Personally I think a bigger issue is the failure of our elected officials to deal with the things holding prosperity back - housing/healthcare/education/childcare rising more rapidly than people can sustain.
The social unrest of the 60's was a direct results of widespread prosperity. Even a minimum wage job for 6 months was often enough to live on for ~1 year. In part because there where fewer things to buy, but also because expected standards of living where low and the green revolution drastically reduced food prices.
The world population was also less than 1/2 what it is today which had other benefits.
> consequences of the policies that lead to the prosperity.
I have suspicions that policy changes to allow banks to compete on a national basis didn't do a lot of flyover country any good. Before the loans from the central bank flowed down a tree, each node ending up at some local bank. Which had to loan out money locally. Now it's a couple of large banks chasing best safe returns. And gouging consumers as much as they can.
The article blames ecommerce and Amazon for the latest decline. I don't live there, however, I believe this is not to do with ecommerce, it is simply the loss of manufacturing and what happens over time.
In the UK we had many communities thrown on the scrapheap with mines, steel and much else manufacturing gone. Initially people invest their redundancy money in things such as a new dog-grooming business, a cafe, a shop, perhaps a tattoo parlour, depending on what 'follow your passion' leads to. So these businesses go okay for a while, eventually the redundancy money runs out, or, in rare instances, the 'follow the passion' business actually meets a genuine need and a success story happens.
Around the time of this general decline my sister was trying to raise money to go somewhere fancy with her group of friends. Being skint she decided to raise some money by making things - things with beads, jewellery, that sort of stuff. These items sold 'well' but only to her friends whom she was going to be travelling with. There was no 'external market'. So rather than go on the big trip to the festival they missed out on that and spent what little money they had on beads etc. to make stuff to sell to each other. A lesson in economics was learned the hard way.
To some extent any town/city/country that does not have manufacturing and external markets will be a variant of my sister's schooldays model of capitalism. If manufacturing (or mining) jobs go and retail comes along to 'fill the gap', then it cannot last forever. Tourism can't come to the rescue either.
I believe this is not to do with ecommerce, it is simply the loss of manufacturing and what happens over time.
First they came for the farmers. Once over half the workforce, now 1.4% and dropping. Then they came for the miners, now 0.6%. Then they came for the factory workers, once 40% of the workforce, now 8.1%. Now retail, still at 10.2% and dropping. Coming up next, transportation and warehousing.[1] What's growing? Health care and social assistance, for an aging population.
This is killing small-town America, because many small towns now have no function. They were once support for surrounding farms, or had some manufacturing, but that's gone.
In the early days of the Internet, it was thought that location wouldn't matter for many jobs. Early ads for Google Fiber made such claims. With enough bandwidth, your town could prosper again. It hasn't worked out that way. If everything you do goes in and out over a wire, automation of most of your job is probably not far off.
Nobody seems to have a way out of this. Education doesn't help that much; about half of new college graduates take jobs which don't require a college education.
The way out of this is basic income. People don't "need" jobs. People need food, water, shelter, and preferably a decent quality of life. The number of jobs required to satisfy those needs per capita has fallen drastically, as you point out. The reason that many people are struggling is because a small number of them are capturing and hoarding most of those efficiency gains, creating an artificial "shortage" for everyone else.
It's so sad, we will have robots growing our food and building our houses and people will still complain about "jobs" when it's really just about distributing the benefits of automation.
I suggested it as a solution to the so-called problem of robots taking our jobs. I don't think it will happen anytime soon, culturally we are still attached to the idea that a job is a basic requirement of life and "hell no I'm not supporting handouts to lazy people."
I do hope over time society will adapt favorably to a post-scarcity economy, but I'm not holding my breath either.
That's probably the big takeaway - "many small towns now have no function"; so they will cease to exist, and the only question is how the society will manage the elimination of these small towns. In times/places where it was efficient to live in small villages, people lived in small villages. In times/places where it was efficient to live in large but separate farms/plantations, people lived in such farms. In times/places where it was efficient to live in towns clustered around largish mines or factories, people lived that way - and when times change, people always had to rearrange, re-settle and migrate to wherever started to make sense.
Wishing for those towns to continue existing is not sufficient if there's no economic reason for them to exist at that place in that form and if spare income of the 'wishers' isn't sufficient to sustain the place as a hobby.
Trying to "save" (i.e., prolong the agony of) these towns may be actually harmful to their inhabitants - since staying there isn't a long term option in any case, and the later they move, the harder it will be with more competition from people moving off of other eliminated towns.
One strange thing about the internet though: Maintaining Eye-contact and observing body language is critical to the formation of trust between people. And trust is critical for business. But those capabilities are only available in the very expensive telepresence suites of CEO's and the like, and this breaks the key thing we know about information technology - that it is constantly becoming cheaper. That's a bit puzzling.
And sure this is not fully a tech/biz problem, this is also about culture, just notice how the most poverished means of communications, textual messages, became so common in our daily life, even instead of something like video conferencing.
But here's an experiment: take a few beautiful rural towns, with cheap land and fast internet. offer trustful connectivity(maybe packaged in a container form) to a few major metropolitans, and try to see if you can entice companies to participate and some knowledge workers to migrate to rural towns.
As for telepresence falling in price, I remember expensive telepresence room we're advertised as "being there" and there was specific design for eye contact and body language, but I haven't seen that yet in those cheaper "telepresence" systems.
Interestingly this "source of trust" with a person is exactly what I normally do not want in a commercial transaction. I want time and information to make a decision.
For salespeople figuring you out is part of the job. Knowing how to push your buttons to upsell pays well.
I can also build trust on a website. It's by selling quality stuff, in a timely manner, replacing it when needed be, etc. Actual service. That's actual trust, not being buddy buddy with a salesperson.
I meant emotional trust. My grandparents don't even know what an URL is (they just know to google things) but even they know that if the little lock isn't green, you don't go shopping because it is not safe.
First they came for the farmers. Once over half the workforce, now 1.4% and dropping. Then they came for the miners, now 0.6%. Then they came for the factory workers, once 40% of the workforce, now 8.1%. Now retail, still at 10.2% and dropping. Coming up next, transportation and warehousing.[1] What's growing? Health care and social assistance, for an aging population.
So-called rust belt towns like this earned their name back when steel mills first began migrating from Pennsylvania to locations having lower labor costs decades ago.
It was not so much in search of the cheapest labor, rather avoidance of the most expensive labor which was in this part of the US at the time. Almost anywhere else could provide a significant cost advantage in an increasingly competitive market.
OTOH, during the decades when the high wages were prevailing in the area, this was a unique opportunity to build a certain amount of local wealth while it lasted.
It is not from some form of strength that "retail jobs came to predominate", instead retail was all that remained after the actual wealth-creating engine had left the area.
All retail could do was extract the remaing local wealth which had been generated during the times of better-paying employment with actual wealth-generating industries.
Now that this remaining wealth is dwindling too, these jobs are becoming more unnecessary as the long tail of the middle class continues to be absorbed, their resources from above and their numbers from below.
You can't have a consumer economy without an equal or greater amount of surplus wealth in the hands of consumers, even then it is completely unsustainable unless there is an ongoing source of new value being created for consumers in excess of value being permanently consumed by both producers & consumers combined.
If producers are not a bigger part of the equation than consumers, you can not balance the equation.
Tourism can create local prosperity in the form of a pure consumer economy in places where there never has even been a local source of actual wealth creation.
But tourism dollars only signify wealth that was created elsewhere and merely used for consumption at the resort.
This job-centric lifestyle seems to point to a problem of sustainability rather than economics. Jobs are never endless, moving somewhere or creating a town for one particular job or factory will always end in deserted towns and closed factories, and not adapting to what is happening around you always ends in tears. Nothing new here...
If you want to work, you should look for what people need rather than whatever you did for a job 20 years ago. For example, we'll always need energy and food, but we won't always need cowboys and coal miners. Instead of trying to be a coal miner, try to be an energy worker.
That's a good strategy for an individual, but if a boat is taking on water there are probably better uses of time than teaching people to cling to floating detritus. It's something they probably could have figured out on their own and it doesn't address the underlying issue.
> For example, we'll always need energy and food, but we won't always need cowboys and coal miners.
Cowboys are part of the food sector. Ranching to be specific. Herding cattle, fixing fences, and doing all the other choirs on a ranch will probably be a while down the automation trail. Making some bad decisions like not moving the cattle from the summer grazing area to the winter grazing area quick enough can cost a lot of money.
"We don't fix fence, we build fence" - King Ranch slogan.
Herding cows with a drone.[1]
I ride, and I know people who work cattle from horseback, but the number of people still doing that is small.
Drones are becoming incredibly useful in the industries where somebody has to check on things over a large area. From farming to power line inspection, it's become far easier to look at hard-to-reach areas.
If I understood `oneplane` correctly, that's exactly the point. Coal miners are in the energy sector, and cowboys are in the food sector. Whether or not a specific worker in those industries will be required may change over time, but the general demand for the output of those industries likely will not.
This is related to https://mobile.nytimes.com/2017/04/15/business/retail-indust... which I posted a few weeks ago but got no traction.
This is a critical part of the story that people talking about robots taking our jobs are missing. It's already happening, it's not just robots but also new scheduling algorithms and frankly people just not giving two shits about retail workers.
Education is going to be absolutely crucial for those who are currently performing retail work. I recently attended training by my church on this topic and one of the key focii at present is helping people get the education they need in order to become self-reliant, in any way that works for them. This has never been emphasized to this degree in the past, and the initiatives have enlarged scope from developing nations only to now include the US and Canada. Bachelor's degrees in e.g. web development from an accredited private religious university are offered for around $8K; courses in starting businesses and improving job prospects are offered on demand, etc. It is clear that there is a lot of need right now and the impact of the changing flow of business is being felt heavily.
Training in what though, everyone can't be a web developer?
If everything is manufactured overseas or by robots, retail is largely locked up the a handful of giant corporations who can bankrupt competitors, in many places the former middle class spends all their disposable income on housing and can't afford new services, and the 1% largely don't spend their money. And on top of it, the utopia promised by diversity is actual splitting societies, right when we most need cooperation and unity.
To me this is start to look like an near unsolvable problem.
Web developers don't have long before they face this exact crisis. We're already in the race to the bottom wage-wise and automation is on the rise. There will be high end that needs more than a cookie-cutter website that will be served by humans until the deep learning crowd consumes that.
The problem is a relative handful of super-wealthy people can quickly relocate to more moderate tax regimes and take a huge chunk out of your tax revenue. Call it the Depardieu Effect if you wish. Unfortunately one must target the less mobile elements of society disproportionately.
> The problem is a relative handful of super-wealthy people can quickly relocate to more moderate tax regimes and take a huge chunk out of your tax revenue.
Fine. Then leave. But then you don't get to participate in the market.
This isn't that hard a problem. If you make the money in the US, you get taxed in the US. If you leave the US, you don't get to take the money made in the US with you.
The problem is the lack of political will to close those loopholes that allow otherwise to occur.
I get your reasoning and some could even be sympathetic to your point of view (up to a point), but a few brief moments of consideration will certainly serve to illustrate that what you are advocating is totally impractical. How does one define (let alone implement) the denial in participation in the domestic market? Do you mean that companies with foreign shareholders can no longer trade? Do you mean that the opinions of foreign nationals can no longer be aired and/or commented? Do you mean that foreigners cannot be employed by organisations that participate in the economy? Do you mean that foreigners can no longer purchase from or sell to national firms?
Most wealth (not GDP) is indeed in real assets... and these assets are obviously owned. They're typically owned by companies, not by individuals (directly), which is why in the response I gave below I mention foreign shareholders. If somehow you mange to exclude them you have dozens of other loopholes and contractual mechanisms to contend with, the most obvious being leasing by the property company of a real asset owned by a bank, wherein the lessee in turn sublets the asset out.
If you get past that you have to deal with the fact that in a very real sense these assets constitute the bulk of wealth because their prices are high, and that if you make it extremely difficult (or undesirable) to own them the price will plunge as current owners try to sell off their assets and get cash to take out, and nobody with the relevant criteria to own them has enough funds to buy them. That in turn would wipe trillions off wealth, hundreds of billions off GDP, and send the banking system into a new systemic cardiac arrest demanding of bailouts in because the assets underlying their outstanding loans no longer cover the risk they're exposed to.
The problem is that 1% don't have that much money to afford it. They might be rich, but they are, well, 1%. The real money were in the middle class — numerous enough to pick many bills.
Now there is not much of a middle class remaining. Many bills are due, and this is the end of the line — both for the 1% and everybody else.
I guess it depends on what you consider to be the middle classes, but the richest 20% of the people in the US own about 85% of the wealth (the 1% own around 1/3rd of everything), with the remaining 80% of the people owning the remaining 15% of the wealth[1]. Rich people will have to spend more or the economy will collapse eventually. You can't keep a country going if only ~15% of the money is being used.
This is the part that worries me. Up until now, whenever wealth accumulates to an extreme degree, things always collapse, often violently. This is because the rich have always relied on the poor to produce for them and the poor have always been too numerous to resist when it comes to a fight.
Robots change all this. For the first time in history, we are nearing a system where the rich don't need the poor. Whether it's producing food and other goods or even fighting their wars, the rich will soon be able to rely solely on automation to feed, clothe and protect them. Automation could create a system that doesn't have to collapse, no matter how top heavy it becomes.
Bread and circuses are much more affordable than ever, and getting cheaper every day.
Every first world nation can afford to unconditionally give basic food, basic shelter and basic entertainment to every one of their (not global, though) poor people without asking work or anything else in return. Implementing something like this would be a major political and organizational problem, but economics-wise there's nothing preventing it; the industries that cover those needs for everyone take up a significant but still small percentage of the total GDP.
Modern shelter is very cheap as soon as you decouple the location of it from the location of jobs, which redistribution does. A home in a good location is expensive mostly because of the location; but building shelter as such (or using shelter that's built but not needed because it's in towns that have no jobs) is cheap.
Education and basic healthcare is already provided by many societies (USA is a bit of an exception, as it is in most things). Those parts doesn't even need any major changes or restructuring to provide for everyone, I was quite literal when stating food, shelter and entertainment as the core needs of unemployed/unemployable that would need such a change.
The US is still a manufacturing powerhouse, and productivity is multiples of what it was decades ago. The wealth & capability certainly exists, but where it is disappearing to is another question.
Demand for manufactured goods is increasingly saturating (China is next in line). Buying things is less in vogue these days, compared to immaterial pursuits like travel and education.
Then we can direct the newly available labor and existing now underutilized raw materials to building homes that people can afford, yet that is somehow not possible. The math does not add up.
My point isn't that it's not possible, the inputs are readily available, it's that the elite ultimately want 80% of everything produced, that's where it doesn't work.
The essay's point is that ultimately employers do not favor a policy that eliminates unemployment or makes it comfortable because it would eliminate the fear of being fired, their best tool for worker coercion.
The neat thing about world wars is that they involve a huge amount of government-directed spending of taxpayer funds on things that make very little economic sense, but the merely directing that spending does wonders for the economy and the country's prosperity, assuming you win.
Apart from the fact where you're killing people for no reason, it's not very capitalist at all.
That's ’just’ Keynesian economics: the government finding an excuse to boost aggregate demand by borrowing money to spend into the local economy. War has the relative advantage of constantly depleting the assets invested in and thus demanding re-investment, whilst the moral clime enhances the population's will to lend money to the state to fund such an endeavour (”Buy war bonds to fund our battleships! Help us defeat the Hun!”) Investment in infrastructure, on the other hand, generates return on investment for the local economy. War efforts often involve lots of infrastructure work too to support the industries that need to build the weapons (ports, railroads and highways to move goods, & cetera).
You know, as an economic liberal and someone who makes a really good living in the city, if be thrilled if rural voters voted to tax us and distribute more money to the less well off, but they actually voted to get rid of their own health care so they could give me a tax cut.
”Cold Civil War” is the best term to describe and surmise the current predicament I've read so far in years of considering these problems. Is it your phrase?
First use I could find is by John Derbyshire June 27, 2013 [1].
This is a powerful phrase that hopefully finds common usage. Perhaps we'd all have less contempt towards opposing views if we are reminded that violence occurs when contempt levels get too high.
While the Republican voter base is much more rural than the Democrats I think it'd be pretty naive to say that the interest of the common rural man is currently what's being enacted.
> The cultural and economic future of the nation is being legislated by the current victor.
So the people that really control things would have you think. In reality, it is being legislated by the same people that have been in control for decades now. Who that might exactly be I do not know.
Any glibness I see is from those who continue to pretend we don't have a very serious problem in western societies, refusing to see the blatantly obvious and increasing warning signs we are seeing all across our societies and economies.
Just like the US housing bubble & crash, it is like a train wreck in slow motion that after the impact, everyone will be claiming no one could have seen coming.
I took the comment to mean that whatever the moral considerations thereof, a violent class war will be the ultimate outcome of this current predicament. I would like to believe that moral considerations will prevail and bring the situation to a more satisfying conclusion without bloodshed. To resign oneself to the supposed inevitability of violence is despicable.
I guess not? Heres what I took it to mean: I think the comment is suggesting that war and violence is an acceptable and inevitable outcome of the current economic and social climate.
While I disagree with "acceptable", traditionally wars have been the one socially agreeable way of getting rid of excess (male) population.
The economic repercussions of increased local manufacturing (you don't outsource weapons manufacturing to your enemies) combined with increased demand for workforce are pretty well understood.
Which also kind of explains why right-wingers tend to be disproportionally warmongers. War's good for business, after all.
Yes the world has been brutal and violent for a long time. Fortunately there has been a trend towards less violence per capita over time. To me suggesting that we should regress in this dimension in order to deal with the problems being generated by the current economic and political system seems completely unacceptable. I think as long as all labor can be automated and we as a society do not try to keep humans alive, power will just keep concentrating in the hands of fewer and fewer regardless of how many wars are fought.
Well, firstly, that's not true for every need. But, more importantly, the demand for Web developers is not bottomless, and if every unemployed person in America is suddenly a master Web developer the salaries are obviously not going to be good.
For some value of web developer, probably. Although I think you are overestimating the complexity of Excel for pivot tables for the average non-computer person.
Still the level of web-developer who has little more skill than using Excel for pivot tables is also the web developer who can do little more than make static websites, which is plenty enough to be a webdev in 95 or even in 2005, but unlikely to be enough in 2017. I have just made different orders from two different websites today (cables and clothing) and both websites made decent usage of javascript, search, etc.
Besides that, many factories had thousands of employees; even a modest store may have ten - but watchapp needed just 50 programmers to be sold for a double digit billion dollar sum.
it is one of the ways it ends in blood and imo the least likely one. The other ones is more and more countries elect facist leaders and yet another war between nation state happens. Or mass murders. The anger that people feel will have to flow somewhere. One way or another.
We have very little data about nk. For all we know the country is filled with violence. Anyway my message did not mean that people will révolt. I simply meant that there is à spread of anger un the west. Anger is à very powerful feeling that can cause people to unleash lot of energy. Smart dictator use this. They cause anger in their own people and then deflect it toward an outside ennemy.
Education is going to be absolutely crucial for those who are currently performing retail work.
It won't help. About half of new college graduates are doing jobs that don't require a college education. Those are the ones heavily in debt, with a negative return on investment for college.
Only a handful of STEM degrees are really remunerative, and I don't think we can call putting everyone in a handful of engineering disciplines a serious solution.
What kind of "web development" degrees are we talking about here? Because I see a lot of private universities and colleges taking ever penny from desperate people in exchange for teaching pretty basic IT skills. They're sold on the idea that if they know a bit about HTML and CSS it'll be a ticket into a well paid tech job, despite the fact that what they're learning wouldn't have got them through the door at an agency ten years ago, let alone today.
Reviewing the degree requirements and courses, and having studied CS at BYU myself, I'm betting the quality is very high. In fact I wish, as a web developer currently, that I could have taken some of these courses instead of courses like advanced algorithms; though fascinating, I'll bet I would have enjoyed a basic security course or a vector graphics course much more.
One of Bernie Sanders major platforms was tuition free education.
Politicians can talk about 'jobs' all they want, but the real key is education. Because jobs of the future will ALL require some highly technical skill.
Repost of one of my old comments: I think it's worth pointing out that higher education is mostly a filtering mechanism not an enrichment mechanism, and a terribly inefficient one at that. After basic maths and literacy are learned, it imparts little on the average student. A collage degree is a proxy for a reasonable IQ and moderately high conscientiousness. Thinking of education as an inefficient filtering mechanism helps illustrate why our frenzy for more education is misguided. Certainly more efficient filtering mechanisms (like a test-based credentialism where instruction and assessment are separated) would be very useful but they will not increase the amount of people with the mental characteristics (high intelligence and conscientiousness) that are becoming increasingly valuable in the modern economy, nor will it decrease the portion that lack these things. Panning does not create gold.
Unless I'm misunderstanding your comment.. by saying that education is a "filtering mechanism" you essentially claim that educated people have some inherent ability that uneducated people don't have. And you don't base your Rayndian claims on any sociological studies
The fact that high school graduation rates went from 6% at the beginning of the century to almost 80% at the end, means that humans are capable of learning a wide variety subjects ..inherent ability is overrated.
EVEN if it were the case that college is a filtering mechanism my point still stands because tuition free education increases the availablity of education to those with the ability. And we won't waste our countries intellectual capital. This improves the individuals lives and the economy as a whole
Education is absolutely an "enrichment mechanism".
With the exception of upper level math or particle physics is attainable by anyone.
>EVEN if it were the case that college is a filtering mechanism my point still stands because tuition free education increases the availablity of education to those with the ability.
This is not the case. If my thesis is correct, which I think it is, you could replace college for the vast majority of people with 1 standardized test for thousands of times less cost.
Don't you think its odd that the college boom started just after IQ tests for employment became illegal?
When IQ tests were outlawed for use in employment, with the exception of the military and universities (a hilarious irony), it became uneconomical for employers who needed well-above-average people to train their own employees, as they could not filter for intelligence first. Before Griggs vs Duke Power it was common for an uneducated person to score well on an IQ test, get promoted, learn on the job and work their way up to the top. Now that same person is forced to go to college, waste thousands of dollars and years of wages to do the same thing, giving a cut to the professors and the administrators (most of whom have conveniently propounded IQ denialism until just recently when the science has become so blatant that it is embarrassing to do so). This system vastly decreases the probability of someone improving their lot.
Maybe it would be nice if everyone were equally intelligent.
Maybe it would be nice if everyone were equally tall.
But this isn't the case, and if you base policy on the supposition you get the waste and rent seeking that is emblematic of the education system at all levels.
Yeah but IQ are notoriously inaccurate and in no way a similar trait as height.
Measuring height is an objective biological measurement.
IQ is a measure of a state of consciousness with so many different confounding factors.
This is a Nature vs Nurture question and you're going 100% all in on the Nature side of the argument....some sort of inherent genetic IQ predisposition.
Saying one has a permanant IQ is equivalent to saying mexicans inherently like to steal hubcabs.
When it comes to measures of IQ and other states of consciousness environment plays a massive role.
Google "labeling theory" and "Motivation theory".
IQ tests are proven to have so many counfounding factors that they're not taken seriously.
For example:
1> Groups exposed to abstract reasoning problems during school or prep courses do way better on IQ tests...
2> IQ is also shown to increase as people get older....
3>Not to mention going to university is shown to INCREASE one's score on IQ tests....
So how accurate of a test is that?
The reason it's outlawed is because it's essentially stereotyping.
It's a bullshit oversimplified view of how the brain works, and factually incorrect and Nazi-ish.
We can have an oversimplified filtering system, a single test that determines peoples futures.......or we can put people in an environment like university where education and learning is encouraged...and see if they meet their genetic potential.
I would like to recommend a book to you. It is Intelligence: All That Matters by Stuart Ritchie. I would recommend reading it before forming strong opinions on this topic.
I would like to recommend decades of social science research that shows that human performance is effected equally by environment as genetics.
Hence the entire nature vs nurture debate.
Consciouness is too complex to be summed up by any single test and any person remotely knowledgable about the subject will agree with me. But it's been interesting talking with you.
Decades of social science has not controlled for the heritability of cognitive ability. In light of the twin studies which proves this beyond a shadow of a doubt, most of it is worthless.
Are you seriously referencing twin studies and saying social scientists haven't controlled for heritability of cognitive ability?
Like centuries of social science research haven't thought of that?
Like you had a suddenly original idea that tens of thousands of people who have dedicated their lives to this field, gotten M.Ds and PhD's, hadn't thought of?
And if twin studies were conclusive wouldn't it have answered the debate of nature vs nurture that we're having, once and for all?
You're trying to summarize human consciousness, which is extremely unpredictable, and no one understand fully... into one test...It's extremely dumb and pretty much everyone but you agrees...and for good reasons...
Consider the idea that maybe you are wrong; read the book I'm recommending (which is short and thoroughly cited) and I will read The Mismeasure of Man a third time, which may be one of the most dishonest books ever written.
It is the case that social science post 1950s largely failed to address the idea that cognitive ability is heritable (and the heritability of most mental traits). I agree, the situation is absurd and embarrassing for these fields. But this is what happened.
I would like to say again, please do read the book. There were times when I was outraged by a position, to the point where I insult a person who is writing in good faith (as you have just done); this is usually a sign that I am reasoning backwards and am defending a position out of emotional attachment rather than trying to understand what is true. I would suggest this may be happening to you now.
One thing to keep in mind is just because something is true doesn't make it good. You can preserve your moral outrage even as your descriptive beliefs change.
Most people would learn fine on the job. For things like higher maths and physics, I think apprenticeship and autodidacticism would be a good form of this. The trades have a much better model than most.
Apprenticeship would work particularly well in computer science.
Although tuition free education is a good answer, it won't work for everyone. There is a distribution of intelligence and skill; not everyone will be able to perform the remaining highly technical jobs. What should our society do with these people? Leave them on the streets? Provide welfare/basic income? This is a critical question because more education will not scale to 100% of the population.
I disagree and I don't think there's any sociological evidence that anyone can't succeed in almost any profession.
There also community colleges and other lower technical tracks that people could do for the less motivated.
The point is the option is still available which benefits,the individual, our economy and the human race. It's like a no brainer win win situation for everyone.
I wouldn't really cast it that way. Companies would like to tell themselves different but they don't really select for nothing except intelligence. There are a lot of unwritten rules which end up favoring candidates who have the "right" background over those who don't.
People get a longer education => Jobs get more selective about education and require longer studies => People have to get a longer education to get a job => Jobs get even more selective => etc...
Cheaper education will create more educated people, unfortunately that doesn't create new job prospects.
Free education does not mean that you get paid while studding. You still have to find means to clothe and feed yourself and find a roof above your head during the nights.
Well that's the way the knowledge economy works! It's based on your knowledge. So obvs people with more knowledge have better opportunities. It's how it works today except lots of people are left out.
The difference is, with everyone educated, now you have a highly knowledgeable populace who are capable of solving harder problems, starting business to solve these problems, etc. I would rather have 1000 people working on Cancer research than at the DMV pushing paper or laying brick. Things machines can do.
We would have a net improvement in people's lives and the human race.
I think free education is valuable public good but I'm not convinced that machines are replacing home health aides anytime soon. At least at present the economy seems to be creating a lot of really low-paying jobs.
I've never heard of a job retraining program that did better than like 20% of the people going through it finding jobs that paid similarly to their old ones. Have you?
Worked in a mall for a decade. As money moves out so do retail stores. Small mom and pop shops barely sustain because of little to no labor cost. Small businesses that do have to hire employees close down fast because labor cost becomes unsustainable due to low margin business. Worse is when big box stores moves out, they tend to be the attraction that drove people to the mall in the first place, and smaller stores got business from being "discovered" along the way in high traffic locations.
I wouldn't consider any retail job (e.g. cashier), a middle class job. Nobody wants to think of themselves as lower class but clearly there is a delineation somewhere? Are you still considered middle class if you are unemployed and the industry you worked in left town?
Similar things will happen to small towns along trucking routes if tractor-trailer driving becomes automated. You will have less need for restaurants, small hotels, truck-stops, etc. if an automated truck is passing through at 3am.
I don't see solutions to this other than people leaving these towns or learning new skills.
Well, if there's a bright side it's that the good retail jobs are long gone. I had friends whose parents made decent livings selling suits or appliances at Sears and JCPenny. You used to make 40k/year as an assistant manager at KMart. Now it's almost impossible to make $10/hr in retail. There are no benefits or even full-time hours. And the only stores hiring work you like a dog with two people per shift like Dollar General. You have to stock, clean up, and play cashier.
Rural counties and small metropolitan areas account for about 23 percent of traditional American retail employment, but they are home to just 13 percent of e-commerce positions.
Almost all customer fulfillment centers run by the online shopping behemoth Amazon are in metropolitan areas with more than 250,000 people — close to the bulk of its customers
“I’m thinking about what’s next,” he said. “We’re essentially thinking of Johnstown as an economic development laboratory.”
They call this out in a couple of places but they never seem to completely connect the dots, there is "He renovated the first floor to attract customers from farther away, customers who might have more money to spend and more places to go than Johnstown." to pull money from towns further away, or "But fewer people can afford his products now that the good jobs are long gone, and Mr. Apryle has had to make adjustments."
It's not Amazon, its not 'big box' chains, its that the city no longer has a production base and so the fraction of GDP this space used to produce has gone away.