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9.2% Unemployment? Blame Microsoft. (forbes.com)
217 points by grellas on July 18, 2011 | hide | past | web | favorite | 243 comments



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.


> 1800 surplus Physics PhD's

Do you have better data than this?:

"The physics PhD classes of 2007 and 2008 consisted of 1,460 and 1,499 PhDs, respectively. We received post-degree information on 54% of these degree recipients." ... resulting in 4% unemployed initially. Including the 7% temporarily employed that's around 150 excess Physics Phd's in 2008.

http://www.aip.org/statistics/trends/reports/phdinitial.pdf


Not a physicist. But the fact that they only got post-degree information from 54% worries me, because those who are unemployed are probably less likely to answer a survey like this.


This implies that physics PhDs are interchangeable.


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.


Maybe I'm biased because I did research in Particle Astrophysics and now work as a developer for Particle physics experiments, but the problem with most small businesses is not that they don't need any random PhD, it's that they lack the foresight to understand what a person trained in particle astrophysics can actually bring to the table. In modern day terms, a degree in astrophysics is a degree for the polymath.

The valley and wall street are a bit different... people are willing to give you a shot at almost anything in any seemingly unrelated field because they think you'll probably be able to handle it, because you've solved hard problems that are often similar in scope. Predicting the market is pretty similar to reconstructing a collision, folding proteins, or predicting molecular orbitals. Cloud computing isn't that different than grid computing. Statistics are statistics and models are models, and companies are finding out new ways they can benefit from information processing by utilizing the people who pioneered it.

I do agree though... the Main Street small businesses, the ones that I think the GOP often fantasizes about, aren't going to usually need someone with a PhD in whatever.


A very large number of those 2 million unfillable jobs mentioned above are for basically "Someone who knows linear algebra and statistics really well."

Scientists fit the bill -- any physics phd who can't find a job can join the finance or ad tech industries by sending out a single resume.


Intel (a small business in 1968) was started by two physics phd guys. Adobe (a small business in early 1980s) was started by two phd guys. Google (a small business in 1998) was started by phd-dropouts. I think there are many companies started by phds.

If a small company is trying to solve sufficiently complex problem, like what Intel (in 1968), Adobe(in 1980s) and Google(in 1998) were trying to solve they need a phd. If a small company is building a new social network or social app it might not need a phd.


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


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.


Well as Aaron Hillegass says in one of his books, a degree in astrophysics may not be all that practical, but it helps you overcome challenges where doubt might creep in about having the intellect to take on a difficult problem.

1) I am having trouble solving this problem, I must not be smart enough.

2) Wait, I have a degree in astrophysics, so I am smart, this must be really hard.


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...

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.


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.


I think you're operating from the assumption that the fruits of automation will somehow find their way to the population at large. That won't necessarily happen.

It's quite possible that the advantage will go entirely to those who own and manage the businesses that automate their operations. (And indeed, some would say this is happening now.)

If automation reaches its endpoint, where no human labor is necessary, how does capitalism continue to function? What value can members of the public offer in exchange for all the automatically-produced goods and services?

I think if that were to happen, we'd see some kind of major social reorganization. Who knows how that would look? Maybe it would be utopian, and then again maybe it would be some kind of luddite, burn-the-robots-and-hang-the-engineers facism. Who knows.


Thanks for the reply. Yep, I'm assuming that the benefits will get shared (which is not guaranteed) but I think capitalism and exising human charity will work. Here's my amateur economic analysis:

If you can supply widgets more cheaply, you can underprice the competition and capture the market (I'm talking more about basic commodities for survival, food, clean water, shelter, etc.). And of course the other companies will compete, have better robots, etc. and you'll have a race to the bottom (this even happens with 'luxury' goods like USB drives). If I can provide aluminum for cheaper, I can flood the market with it (which drives prices down, but I get the profit).

Secondly, we have plenty of charities -- if advanced labor saving devices existed, governments and others would funnel exising funds to acquire them and put them to use. Why pay for food stamps when you can give everyone their daily bread?

I think capitalism based on survival would eventually have to phase itself out -- it would move to virtual currency where people traded currency for optional goods/services they couldn't acquire with the machines (handcrafted xyz, live concert tickets, etc.).

I may really be on this plant thing, but I imagine a world where, at minimum, we get food/water "for free" from the tireless robotic background workers (like air) and everything else is based on human interest. I think humans have enough demonstrated charity to donate something like that once developed.

But, I think the bigger threat is this: a world where robots are advanced enough to provide everything is probably one where a sufficiently powerful country could take over everything.


At first, yes. Computers were a privilege of rich and intellectual elite, at first. But as you can see, technology gets cheaper and cheaper and more accessible to the general public. Even those who do not have any money at all are able to access it through libraries and stuff.


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.


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).


"This seems to me to either produce societies with wild inequities between a very few producers and a very many do-nothings"

I would imagine that as the costs of production approach zero, our real life economy will start looking a lot more like the Second Life economy. That is, where everyone is a boutique producer slash experience seeker.


> Widespread, permanent unemployment is one of the less favorable possible outcomes.

Wondering why you think this is a less favorable outcome - presumably if there were robots that could make all our whims come true it would be closer to a utopian society. The value of "employment" for itself seems nonsensical - the ability to procure things that people want seem to be the better barometer of a society's wealth.


These reminded me of structural unemployment[1] effects I've learnt on history classes, that happened during the first industrial revolution.

However, PG published an essay[2] from Knuth that mentioned:

... because their aim is to create machines that write programs better than we can, given only the problem specification.

In this sense we should continually be striving to transform every art into a science: in the process, we advance the art.

Which seems to be pretty much corroborated by your TL; DNR

[1] http://en.wikipedia.org/wiki/Structural_unemployment

[2] http://www.paulgraham.com/knuth.html


What a great article! I have similar ideas to those thinkers (Brain and Ford), but I've been inspired mostly by reading way too much science fiction! Feels great to learn I'm not just simply crazy.


Well, to take another example, we don't use horses for labor anymore...Some part of the labor force -has- been replaced.


Just out of curiosity, what happened to all the horses that were left without jobs?


Robots arent doing most of the work americans used to -- people oversees are.


Actually this is false. As the graph in the article shows American manufacturing output is much higher now than it was in the past. This is due to automation and a smarter, more empowered work force.

While American jobs for simple, brute force manufacturing were outsourced, high end manufacturing for complicated things like Tractors and earth moving equipment are now essentially power assisted with automation backing or managing human output.


"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.


> Government cannot create jobs.

This is nonsense. The government can fund projects that create jobs. Do you have any idea how many small businesses out there make their money solely from servicing government contracts?

Just as an example, I worked at a small software consulting firm during the middle/end of the dot com boom. We were a project shop. The contracts we worked on for the state allowed us to stay in business and weather the dot com bust. In the process, we brought in and trained about a dozen 'blue collar' type workers to do project management, account representation, and basic html and coding. As a result of that government money, those people got a new career path and ten years later the bulk of them are working at other companies making 6 figure salaries. Tell me the government didn't receive a huge return from their investment on that.


>> Government cannot create jobs.

>This is nonsense. The government can fund projects that create jobs.

There's no evidence this is a net creator of jobs, though. There's a lost opportunity cost to take into account here.


There's also no evidence that keeping taxes low (the opportunity cost) creates jobs. Just look at our employment performance over the last decade


Where are taxes low? Certainly not where I live.


>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.


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.



If I do some work and grow some food from seeds, I have created actual value by my work. Monetary and fiscal policy does not do this. It creates or destroys currency, thereby either diluting or concentrating the value of dollars, creates temporary incentives to borrow or lend, which will be offset by the inevitable bounce-back. The end result is just a temporary fluctuation.


There's a great podcast about this exact topic by Planet Money: http://www.npr.org/blogs/money/2011/04/05/135151990/the-tues...


One of the best Planet Money episodes I've heard. Summary (from memory): the one and only way government can create jobs is to invest in infrastructure. Everything else is hot air.


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... 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.


> "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.


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.


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.


"... 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.


I would be interested to see some quantification of the total cost to educate a company's work force, compared with its tax burden (and the "taxable activity" it sparks, if that is quantifiable in some way), for a number of different types of companies. Has anyone seen data like this? Doing some napkin-style calculations it seems like I could convince myself of either conclusion.


The 'business lobby' is almost 100% against providing education, which is a significant part of the reason that neither the public nor private sector is doing an adequate job.

Business and society don't operate apart from each other.


People can leave their jobs at-will, which makes it is lower-risk to employ people your competitors trained than to train them yourself.


But it is higher-risk to be unable to find anyone employable than it is to train people yourself. So the system depends on a surplus of already-trained workers, which someone needs to provide, or everyone suffers.


Well then businesses could just start offering contracted jobs with fixed lengths rather than "at-will employment" (aka: "leave/be fired for the lulz employment").


>That is exactly the message that the unemployed and the rest of the country need to hear and take to heart.

I bet they and the lady at Rite-Aid regularly read Forbes magazine, right? Don't kid yourself--this article is meant for the echo-chamber. And that's why I think it's a waste of space.


The discussion can be started anywhere. Most helpful when it eventually (if it hasn't already) trickles down to the non-Forbes reading masses. If nothing else the article seeds a talking point for Forbes readers.


Yes, I believe three things have to be true:

1) We have to be clear that to be employed you need new skills (trades or science or engineering)

2) We have to find a way to encourage both the creation of skills training programs and a way to enable folks to take advantage of them.

3) We should start providing resources so that kids in school today understand that we're not 'forcing' them to go to school, they should go to school so that they can find gainful employment later (or entry into a tradeskill program).

Serious business.


The "blame tech" theme is what struck me - in all its appalling wrongness (see my sharply critical comments on some vapid assumptions made in a like piece that ran on HN yesterday: http://news.ycombinator.com/item?id=2770994).


>A much better take would be an examination of why our education system churns out so many college grads with few marketable skills.

Queue the recent discussion about rampant cheating in college. http://news.ycombinator.com/item?id=2774254


> Queue

I'd understand this better if people didn't always pick the longer word when the short one would be correct.


I have seen grammar and spelling comments given in the spirit of helpfulness, but this was not one of them, and adds nothing.

My comment adds very little more than that, but I'd like to remind people that many very smart engineers and business workers have a terrible grasp of formal English, yet they get the job done and more. WalterBright's comment was short, but pointed to more information, and was a potentially useful comment. The discussion should be about the content of his comment.

The fact that he used the wrong word is virtually irrelevant, we all knew what he meant. Yes, if you have a strong grasp of formal English you do make yourself seem more credible, especially in a formal context. But it's not the thing to focus on. Not here.

S/N on HN is amazingly high, but it is still a casual forum, and we should all cut each other generous slack.

Written with helpful intention. :)


derleth, I can't reply to your reply to the above reply. (Follow?)

As I pointed out, you have edited your reply, with no indication that it was edited.

Your original reply was not helpful. You were taking the opportunity to ridicule someone, with sarcasm. Your current version (assuming no further edits) would at best have no downvotes. Your original version deserved every downvote it got (none of which were supplied by me).

I assume you yourself know this, otherwise you wouldn't have done the edit.

EDIT: added the following: "I'd understand this better if people didn't always pick the longer word when the short one would be correct."

The fact that one word is shorter in this case is not what made the original usage wrong. Length had nothing to do with it. It was merely wrong.


So attempting to help someone learn English isn't helpful? That seems odd.


You didn't even tell him the right word -- if you wanted to help him learn English, you might say something to the effect of:

queue -- noun. A first-in, first-out data structure, such as a supermarket line, or processes to be scheduled naively.

cue -- verb. To prepare for, to bring up, to introduce, typically used as a command. Also noun. an indication that it is time to do something, cf. "that's our cue!". Also used in the phrase "on cue", meaning timely.


Ah, I see. I misspelled cue as queue. That was a mistake. I erroneously thought the original comment meant I should have used the word "see".

I stand corrected.


The thing that bugs me here is that if you honestly consider it, in some situations either word could be used for more or less the same effect.

For example: "Cue the complaints". Surely "Queue the complaints.", meaning that the complaints should start lining up, gets across the same meaning (which is of course "oh great, here come complaints").

This doesn't always work of course ("That's our queue" has an entirely different meaning), however where I see most complaints about "mis-usage", either actually works.


Surely "Queue the complaints."

But that's simply invalid English, as 'queue' is a noun, not a verb. Enqueue is the verb form, and nobody would ever say, "enqueue the complaints." :-)


  2queue
  verb \ˈkyü\
  queued queu·ing or queue·ing
  Definition of QUEUE
  transitive verb
  : to arrange or form in a queue (see 1queue)
http://www.merriam-webster.com/dictionary/queue

Commonly heard used in the phrase "Queue up".

Besides, verbing weirds language. ;)


"The most important principle on HN, though, is to make thoughtful comments. Thoughtful in both senses: both civil and substantial."

"Empty comments can be ok if they're positive. There's nothing wrong with submitting a comment saying just "Thanks." What we especially discourage are comments that are empty and negative—comments that are mere name-calling."

http://ycombinator.com/newswelcome.html


I am trying to be helpful: I'm trying to help someone learn English. How is that negative?


I believe this particular usage of queue is correct english. You can see it on the TV show "So You Think You Can Dance" where Nigel will often say "queue music" meaning "start the music."

'Queue' is not quite a direct replacement for 'see', there is an additional nuance that what follows it is obvious or inevitable, which is why I used it.

I also understand that many HN readers are not native English speakers, and have varying levels of mastery of the language. I would also agree that obscure usage of high falutin' words for the purpose of peacocking is annoying.

But using them to add color and nuance is appropriate.


"I believe this particular usage of queue is correct english. You can see it on the TV show "So You Think You Can Dance" where Nigel will often say "queue music" meaning "start the music."

In the way that you used it, I believe it was wrong.

"Cue whatever ..." comes from movie and other media production, as in "Cue the Gimp!" It's a notice that the actor playing the Gimp should assume his next physical location in the production and be ready to act. See scythe's explanation.

This kind of mistake is very common, and comes from having heard phrases without having seen them in print. We then fit whatever written word we're most familiar with, or assume, on to the phrase. I'm guessing that's what happened here.

The analogue is reading an unfamiliar name or word and then, never having heard it in speech, not knowing how to pronounce it. This happens to me enough to notice.


It's probably clear enough that the word you were searching for is cue, but it strikes me that in the age of Instapaper, ReadItLater and their ilk, your use of queue isn't entirely off the mark.


The British "queue up" when joining a line in wait for something. As do my print jobs. The comment is submitting a topic for next consideration, so what's wrong the usage here?


Its traditionally "Cue" which can be a reminder , so "Cue the current thread" means "take a look at this current thread" not "get in line for this thread".

I say this having read the original term phonetically and not even realizing the mistake which is likely common and really didn't need to be editorialized.


An indication that you edited this would have been helpful. My other reply to you makes less sense now.

Yours in helpfulness, -- sixtofour


Thanks for revising your comment. Unfortunately I had already downvoted it.


"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?


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.


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.


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.


Your assumption being poorly built houses from long ago haven't survived due to some flaw in construction. I'm not so convinced. 80 year old barns cobbled together from rough planks with no foundation to speak of aren't exactly rare in this corner of the world (Southeast US), and I'm pretty confident folks paid more attention to the construction of their homes than their barn. In population dense areas old houses have a tendency to get torn down to make way for new construction.


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.


http://blogs.law.harvard.edu/philg/2010/08/08/unemployed-21s...

> “there was a type of employee at the beginning of the Industrial Revolution whose job and livelihood largely vanished in the early twentieth century. This was the horse. The population of working horses actually peaked in England long after the Industrial Revolution, in 1901, when 3.25 million were at work. Though they had been replaced by rail for long-distance haulage and by steam engines for driving machinery, they still plowed fields, hauled wagons and carriages short distances, pulled boats on the canals, toiled in the pits, and carried armies into battle. But the arrival of the internal combustion engine in the late nineteenth century rapidly displaced these workers, so that by 1924 there were fewer than two million. There was always a wage at which all these horses could have remained employed. But that wage was so low that it did not pay for their feed.”


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.


Of course, definitions of skilled and unskilled labor change too. A reasonably skilled cotton picker is still "unskilled labor" to an economy that needs machinists. A highly trained machinist is equivalently unskilled in an economy that requires programmers.


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.


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.


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.


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.


Right. I'm using the traditional definition of 'unskilled labour', which is generally that which does not require a high degree of training/education - not none at all. I believe that this class of labour is reducing in availability - which is a problem for a substantial proportion of the population.

I wonder if this will have knock-on implications for those of us who have relatively high levels of training. Right now, if my specialism becomes obsolete I can at least pick up a non-specialist alternative job - will this be the case in the future?


>Improvements in efficiency always lead to more wealth not less.

More wealth, yes, but not necessary wealth that gets distributed (as productivity in the US has increased, real wages have decreased).

http://www.epi.org/publications/entry/bp195/


Real wages may have decreased, but total compensation has been increasing steadily, at least on a per worker basis instead of a per-household one. A lot of that has been increases in the cost of health insurance paid for by employers, but some has been more vacation time, 401K matching, etc.


I think that may be true for a minority of the workforce, but not the workforce at large.


It might not be true for the whole workforce, but it is true for the median. For the rich healthcare costs make up basically nothing in their compensation, so all of their compensation increase show up as higher wages. The really poor often don't get healthcare. But for the median, they get healthcare and healthcare expenses are fairly big compared to their wages.

This doesn't mean that the compensation of the median worker has perfectly tracked GDP growth, because there has been a moderate but genuine increase in inequality in compensation. But it isn't nearly as big as the increase in the wage gap, and saying "real median wages have decreased" is misleading.


This is irrelevant because our economy is currently in the middle of the "retooling" phase (c.f. Luddite, Industrial Revolution). The wealth will be fundamentally unevenly distributed until new skilled work takes hold.


"Each time in our history when a new technology has made our lives more efficient some people have lost their jobs."

Which kind of makes you wonder how disruptive the singularity would be.


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.


> 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.


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.


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.


> 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.


Your post is self invalidating.

Paul Krugman points out constantly that if the unemployment problem was structural, we'd see wages rising in areas where there is demand,...

A testable prediction of (one version of) structuralist theories [1].

...for those above [400k] they've increased 23% since 2008.

It looks like reality fits the structuralist predictions - wages are rising for some people, and falling for others.

[1] Not all structuralist theories predict this, however. Krugman's version of structuralist theories is based on assumptions of interchangeability of labor, no delays in price adjustment (i.e., no sticky wages or sticky prices), and several more. It's strange how Krugman believes in sticky prices/wages when pushing Keynesian theories, but believes them to be false when bashing structuralist theories.


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.


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


Modern industries take a lot more training than those of a century ago. At the very least, the time to retrain will be longer than in the past. That alone would lead to higher unemployment. More importantly, there are more people who, for whatever reasons, just aren't capable of becoming good engineers, scientists or business people.


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.



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.


I think the example to take here is the German education system: They were proponents of the idea that college isn't the only way. They had a second option, which is vocational school. These often have no tuition.

This is the type of school you don't usually go to 5 days a week. Instead, you split that time between school and apprenticeship (i.e. internship). That way, you're forced to see the industry from day 1 and there's no situations where you graduate without being employable (as I often see in CS majors these days).

The result is that you have training as a skilled technician, and can make a good living immediately. The industry also has skilled workers to fill their gaps. It seems like a no brainer to me. You don't need a 4 year university diploma for everything.

Also, it blows my mind that industry bitches and moans about having no workers yet makes no effort in that direction either. My school, WPI, was founded back in the 1860s by industrymen as a "free school for industrial science". Where is this sensibility now? 20 odd companies and approximately 200 citizens helped build the buildings for the school. What happened to this sense of community?

Edit: Now that I think about it, on a slightly unrelated note, why don't universities have mandatory internships anymore? The more, the better.


> "Edit: Now that I think about it, on a slightly unrelated note, why don't universities have mandatory internships anymore? The more, the better."

Some do. I went to the University of Waterloo - it's well known for its co-op system (i.e. internships). The program I was under put you through 5-6 4-month internships before you could graduate.

Linky McLink: http://cecs.uwaterloo.ca/

I have to say, it is by far the best decision I've ever made. If I had gone through undergrad without taking internships I'd be pretty fucked right now. Instead, I had a small lineup of name-brand companies courting me out of college and that's subsequently opened a lot more doors.

If you're going through an engineering/CS education right now and you're not doing internships, you're doing it wrong.


Not at all. Internships are a valid option (well, as long as they're paid), but they certainly are not the only option. You could be contributing to one of the open source projects out there, participating in research on campus, or doing inter-professional projects if your school offers them.

When it comes to education and employment, there is no single right way of doing things.


Respectfully disagree - if your goal is private sector employment.

If you want to go down the academia path, I'm sure the optimal course of action is different, but for private sector employment it doesn't get better than internships.

I've done a lot of interviewing, and while open source projects are valuable, they are largely not as valuable to a company as real industry experience. Now, this differs in degrees - if you're a core contributor to a well known library for example, I'd give that a lot more credence than "hacked on various open source things".

Research on campus also pales in effectiveness to industry experience. Software in industry has a lot of constraints and differences to hacking on your own time, at your own pace, and similarly has a lot of differences to academia.

This is supported by my interview experiences - I interview a lot of masters-level people with impressive rosters of research projects on their resumes, but many of them cannot code at all, to the point where I wonder what exactly they contributed to these projects, if anything. On the other hand, I've never interviewed someone way out to lunch who has a background interning at the "big names" (e.g., Google, Amazon, Microsoft, Facebook, etc).

Having a company with a very high hiring bar on your resume is like a gigantic stamp of approval - people know these companies hire tough, and if you passed their bar (and spent time there, and didn't get fired), you automatically have more cred than someone who worked on anonymous FOSS projects or his/her own projects.


> I think the example to take here is the German education system: They were proponents of the idea that college isn't the only way. They had a second option, which is vocational school. These often have no tuition.

We have a similar alternative here in Australia; often known as "TAFE" (in Western Australia, at least) where the fees are typically just up-front and very cheap (we're talking hundreds, as opposed to 20-30k+ for University) for vocational courses, and a bit more for apprenticeships.

Saying that, and mostly due to our mining activity, there are a lot of people seeking this route. In fact, it's not uncommon for an electrician or fitter to earn a good $80k+ for FIFO work with just a couple of years experience (the news media usually says $100k, but that's the exception). Not bad considering what a lot of DBA's, programmers and sysadmins with 1-2 years of experience get.

Keep in mind we have a Government scheme called HECS/HELP, where the Government pays your fees (with some fairly high limits). You pay them back once you earn a certain level of income (the rate increases as you earn more) and there is no interest, however it does increase in June every year via inflation.

Excuse my very high-level overview.


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.


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

Excellent argument for real reform to health insurance access.


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.


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.


I think the difference is more cultural than anything. Making your own fortune is very much part of the American identity (from gold rushes to tech startups), whereas Europe has experienced over and over again that boundless ambition can lead to horrendous things (war, war, more war and genocide).

The US getting more universal health care coverage will not change that.


There are other ways to achieve the goal of breaking the link between employment and healthcare without a public insurer. Public insurers eventually become the predominant insurer by a large margin because they can use their size to obtain lower prices. Markets with few buyers or sellers are less efficient at providing the products people want at the prices they want than those with many. The result in this case would be less profit to be made in healthcare than people would be willing to pay for, so less effort would be spent to do so. Seems undesirable.

This is trending a bit off topic. Feel free to respond, but I won't.


Except that nations with socialized health care have single or few providers yet manage to get extremely low prices because they have the negotiation power of an entire nation behind them and lots of alternative providers.

Your theory may be interesting but is completely opposite from reality.


This is so true... if you don't have a spouse whose coverage you can utilize, the cost of health insurance is prohibitive, ESPECIALLY for anyone over 30 who has a spouse and kids. At that point going without insurance (as I did when doing a startup, and so many other entrepreneurs I've seen do) is not just risky, it's irresponsible and foolhardy. Taking financial risks to start a business is fine - but you shouldn't have to risk your health and your family's health.

If the government wants to see more people starting new businesses and taking risks, it needs to remove the HUGE disparity in healthcare costs between working for a large corporation and going solo. There's just no reason it should exist.


Out of curiosity, what is the large source of the disparity? I was aware you don't get as nice of a tax break (though that will become irrelevant when you are making no money). Individually, I'd be surprised if your family had to pay over $1,500 a month for everyone, which is pretty comparable to group rates.


IIRC employer-bvased healthcare in the US is more heavily regulated, and allows for coverage of pre-existing conditions and so on.


It's not that uncommon for the employer to pay part of the group rate, as far as I can see.


Oh quite true, but then you can view it is salary. e.g. you aren't quitting a $80,000 a year job to do a startup; you are quitting a $100,000 a year job to do so.

(I find it hard to accept that a lack of free health insurance is keeping that many would-be entrepreneurs at their day jobs any more than a lack of free housing is. If you have some form of disease that keeps you from getting insurance, I completely sympathize (and I believe the health care law will solve that issue), but for most people it is just another cost to consider before leaving - like housing, transportation, etc.)


Housing and transportation can't bankrupt you (unless it is some crazy circumstance that is so rare that most people can't possibly fathom). You can walk away at anytime from your home or have your car repossessed. You simply cannot walk away from your chemotherapy unless you want to die.

If we can somehow find a way to rein in costs of health services (perhaps by disincentivizing supplier-induced demand through price ceilings in both malpractice awards AND gasp healthcare service price controls a la Singapore, Japan, or Switzerland), we can get further away from our dependence on large corporations to employ everyone.


A friend of mine was considering dropping his current job and doing some contract work for a while. He has a wife and two kids, and was worried about insurance. He found that he could insure his entire family with a decent plan for about $450 a month (after spending a little time on http://ehealthinsurance.com/). Now, I'm not saying that's chump change when you're bootstrapping a business on no salary, but that's not insurmountable, either, given some up-front planning and saving.

Would a universal health care system make it even easier? Sure, no doubt. But I often hear that it's so difficult and costly to purchase individual health insurance, and that just seems to be untrue. Are there other factors I'm not considering?


These people either don't intend on being profitable in the next 18 months or else they didn't do their research.

If you quit your job, COBRA allows you to continue to pay 101% of the group rates for 18 months and keep your old insurance.


Not everyone can afford the short term hit of paying 3-4X what they're paying now for their health insurance. If your monthly group policy is $1200/month for your family, but the employer's paying $800 of that, and you're only paying $400, you'll get quite a shock when the COBRA bill comes.


No one has to pay 3-4X what they're paying now for their health insurance. They have to pay 101%.

It's possible that they didn't understand the nature of their compensation, and mistakenly believed their compensation was lower than it was. But in that case, I'd suggest they simply failed at financial planning.

(Note: if you can't do proper financial planning, don't do a startup.)


COBRA can be expensive. At my last job, my premium was around 60/month. When I quit, COBRA payments were 750/month. This was before kids.


EXACTLY the same problem in the UK. Under the last government's social engineering caper, millions of teenagers who would otherwise have learned a trade (electrician, plumber, carpenter, etc) from their fathers instead were swindled into going to hastily built "new universities" to get worthless, made-up degrees in "Media Studies" (and a mountain of debt). Now they're not only unemployed but unemployable - and all our skilled and semi-skilled labour we import from Poland (a country where they do still respect honest work).

Now my fondness for all things Eastern European is very well known - but even I think it's insane that while we have millions of English jobless, someone flew 600 miles to serve me coffee at the train station in the mornings.


Right now ND is importing welders and other skilled tradesmen from Canada. They just cannot get enough people. This whole "push people to get a real education" is a crock. People need to get the education (be it vocational or academic) that allows them to have a career that satisfies them, and not some weird perception of the world.


It's the use of the word "real". You got to come out of the other side of whatever theoretical or practical education you choose with something that makes you an asset. Education is supposed to transform you from a consumer into a producer. That's what "real" is. Tangible.

I've never been to Canada but I love Eastern Europe, there's a buzz there, an energy that drove these kids to learn English and travel to where the work is. To be a young Eastern European today is a glorious thing - you could go anywhere in the EU and be better educated, harder working and better looking than 95% of the locals, 99% in some places. These kids are going to rule the world one day and they'll have earned it - but we'll have thrown it away.


Oh, I agree about the asset part. The US just went through a "must go to college" phase that is making it difficult to do infrastructure jobs that frankly are hard to outsource. Educators and funding providers really cut anything not having to do with college prep. I wonder how many people in offices would have been happier and healthier in a vocational profession. It isn't like the money is exactly that much lower, particularly given the cheaper starting costs.


With the same years experience, and putting the same hours in, I'd be earning as much as a plumber today as I am as a database administrator, I am certain of it. Maybe even more, for fewer hours. It's all about supply and demand, plumbing is something I'm sure more people could learn than could learn to be a DBA, just no-one wants to, yet we all still need our pipes seen to...


This is all very true, but you are leaving out the part about dealing with human feces.


Truthfully, a lot of plumbers never see that type of stuff. New construction and other industries. Although, those willing to deal with it had an hourly rate that makes many programmers envious.

Although, as a programmer, I had to remove a dead rat from a track (rail) after the cart (electrified, motor model size) carrying medical samples hit it. It was quite the shock climbing the ladder, opening the false ceiling, and then doing the horror-movie-style 180 with the flashlight.


I have a friend with a sewage pumping business. He pays his drivers $40,000+ per year (high school education not required) and is a millionaire himself. There is money in handling 'issues' that other people don't want to handle.


Being a business owner and having multiple people working for you != 'being a plumber'. 40k is about half of the US median programmer salary.


where did you get your figure for US median programmer salary?


Bureau of Labor Statistics: http://www.bls.gov/oco/ocos303.htm .

"In May 2008, median annual wages of wage-and-salary computer applications software engineers were $85,430. The middle 50 percent earned between $67,790 and $104,870. The lowest 10 percent earned less than $53,720, and the highest 10 percent earned more than $128,870."

On the other hand, from that same page:

"Median annual wages of wage-and-salary computer programmers were $69,620 in May 2008. The middle 50 percent earned between $52,640 and $89,720 a year. The lowest 10 percent earned less than $40,080, and the highest 10 percent earned more than $111,450. "

and

"In May 2008, median annual wages of wage-and-salary computer systems software engineers were $92,430. The middle 50 percent earned between $73,200 and $113,960. The lowest 10 percent earned less than $57,810, and the highest 10 percent earned more than $135,780."

So they make a strong distinction between "programmers" and "software engineers". I guess there's a definition in there somewhere, I didn't read it that closely (which is why I initially took the 85k as 'overall' median).


wow - good find, they actually have a few more classifications lower on the page (developers). I wonder what the difference between responses of the workers versus management under what category they find themselves.

They make it equally difficult to figure the plumber and other vocational professions. The initial pages seems to bunch a varying groups together. ick

defs: Computer software engineers design and develop software

omputer programmers write programs. After computer software engineers and systems analysts design software programs, the programmer converts that design into a logical series of instructions that the computer can follow (A section on computer systems analysts appears elsewhere in the Handbook.)


"Education is supposed to transform you from a consumer into a producer"

What the ....? I'm guessing there are many reasons to get an education, but isn't the primary reason to understand the world better than before?


Yes that's very warm and fluffy but it should be obvious that an education system that doesn't create more value than it consumes will eventually bankrupt it's host society.


I think you're mixing multiple issues into one big ball of yarn.

A solid case can be made that America's biggest problem right now is our populations inability to think critically. "here, take this loan with fluctuatings interest rates that only lasts 5 years. don't worry you can refinance in 5 years after your house is worth more". "Don't worry about eating well or exercising, here are some pills that will solve it all for your". "let's pray for a solution to our national debt" <- I wish I were making that up


That isn't a solid case for our population's inability to think critically, it's a solid case for the problems caused by the necessity of specialization in a highly complex society. In nearly every interaction outside our chosen areas of expertise, we are all on the wrong end of an information asymmetry. Expecting everyone in society to have at least an intermediate level of expertise in <insert as-yet-unknown next thing that screws us> is not the solution.

Here's an example - I go to the doctor, the doctor prescribes a certain cholesterol medication, I go pick it up and start taking it regularly. There's every chance that next year, someone on the internet will be implying that I'm stupid, that I lack critical thinking skills, because everyone knows that this cholesterol drug causes a major medical condition. I'll be told that anyone who knew anything about medicine at the time I was prescribed this drug would have told me that I shouldn't have taken it. And yet, my doctor, who presumably did know things about medicine, told me to take it. Should I have done my own due diligence into this drug? How would I know where to start? Do I need to be taught biology so that I know how to figure out which medicine is and isn't safe? Does everyone need to have enough understanding of medicine to make these sorts of decisions?

The financial system is less complicated than medicine, but it is not at all trivial. People who were sold snake oil by those with more expertise than themselves do not lack critical reasoning skills. They merely trusted authority, which we all have to do on a daily basis just to get by in a world where everything is complex.

tl;dr; People who didn't understand the consequences of adjustable rate mortgages or believe that prayer is the only way they can contribute to solving our debt problem aren't stupid; they don't know much about finance, but they probably know a lot about something else.


Somewhat related, but when I had issues with my heart, had I blindly followed what my doctor said and not done due diligence, I would have missed a very critical parameter that had to be fixed. The doc (multiple doctors, actually) never suggested the tests, I did my research and found it out, with some push got the test prescribed, lo and behold! That test was positive and was a primary reason for my ill health. Does everyone need to have an understanding of these things? I don't know, but it probably saved me from another heart attack for sure!


"I'm guessing there are many reasons to get an education, but isn't the primary reason to understand the world better than before?"

Surely that's rhetorical?

Do you honestly think most people pursue education primarily to understand the world better, and not to increase their earning potential?


I think the smart ones realize they increase their earning potential by understanding the world better, but it also does much more than increase your earning potential.

The idea that an education turns one into a producer from a consumer sounds absurd. People without educations produce!


People without college education sure, but they have a different kind of education, which was my original point. Why is college seen as the only way?


by that definition all of life is an education is it not? I don't think college is the only way, but I still don't think an education is about becoming a producer instead of a consumer.


"To be a young Eastern European today is a glorious thing"

LOL, of course, that's why they flock to the West to pick asparagus &_& . Now I agree that many people from the East have better work mentality than the unemployed here in the West, but that's out of economic necessary, and not some sort of fundamental genetic trait; and it'll be gone in 15 years when the economic standards have leveled and everybody has gotten used to it.


Let us not forget though, that if you see a foreign worker, then you will more likely than not have come across someone that has decided to do something different than the rest of his/her peers, often times leaving friends & family behind in their home country. The goal? To make money/open up to different opportunities, perhaps with a vision to one day return. Thus you will see people more motivated, because the ones that aren't have stayed home. As for people respecting honest work, the shortage of "traders" can be seen in Central & Eastern Europe as well and is being filled by people from beyond the region. There is not an overproduction of these skills in CEE.

Also, I see it as a great opportunity (for say the UK) to have people from the rest of the EU. I mean, you did not have to pay for 18 years of their education and health care. That is not bad for the taxpayer.

Disclaimer: I am Czech and used to work as a fruit picker during Summer months :)


Dobry den :-) Praha is a perfect example of what I mean - a city with a long history full of people who are excited about the future. Compare to Paris, a city that only harks back to past glories. I have many friends in Paris and am often there, but it feels claustrophobic for that reason.


Hi :) Don't know about Prague, have not been in a long time, but you could certainly say that in countries that are still lacking a bit economically, just implementing what exists already in more advanced nations can lead to big gains.


May I ask how old you are? Although some of your observations are correct, I distinctly remember such devaluation of the trades going on under the last conservative government as well, not just the Labour one that came to power under Blair. Indeed, worthless degrees were lovingly satirized by Douglas Adams in the Hitchhiker's Guide as far back as the 70s. To ascribe this problem solely to the faults of a single party reflects a rather short-term view of the problem.


I'm in my mid-30s. Sure it happened in the 80s - but i was a kid then. What was different about Nu Labour is that they sold snake oil too, a false promise of degree== job. Thatcher was heartless, but she never lied like that. She just said, get on with it.


I'm 40. My point is not that Thatcher was heartless, but that while she was busy privatizing a variety of state-owned UK companies (most of which desperately needed to be have their monopolies abolished), she also triggered a recurring asset-inflation/deflation cycle and popularized the idea of getting rich quick through trading up repeatedly. This culminated in a real-estate boom (& bust) after people were given permission to buy their council houses at rock-bottom prices.

Your spelling tics ('nu labour') and use of the suggestion that the party lied by promoting a policy of wider university education which turned out to be a failure suggest a rather intense bias. It seems not to have occurred to you that the Blair government thought widespread higher education was the antitode to Britain's structural economic problems and simply Got It Wrong. Likewise, there are a lot of people on the left who are convinced that Thatcher set out to wreck the economy by plundering the state monopolies, when the reality is that they were in terrible shape and the abrupt recession that followed a long period of financial expansion came as a nasty surprise for the then-ruling Conservatives under John Major.

I mean, it's fun to imagine that wicked politicians crash the economy for their own personal gain; but even a brief study of history suggests that wrecking an economy is usually followed by painful electoral defeat and a long term in the wilderness. Most politicians are not especially malicious, they're just not especially competent either. Gordon Brown looked like a magician until the financial crisis hit, and had probably come to believe he was. Likewise, Thatcher looked like a genius until there were riots in the streets and Sterling collapsed not long after her departure. If you can only remember the faults of the most recent government, then you're in danger of repeating the ones of that which came immediately before, or those of their predecessors.


It was not just a mistake, it was a deliberate attempt to monkey with the unemployment figures before an election! One the electorate fell for. Of course you could make exactly the same case about Thatcher boosting her popularity by winning the Falklands War.

The Nu Labour "project" was very cynically about power for the sake of power, using techniques hitherto reserved for selling consumer goods and pop music. Thatcher, for all her faults, was a true believer in what later became known as Thatcherism. Blair and Brown were so intent on power their whole political careers that they had absolutely no idea what to do when they got it!


Really? Have a look into Thatcher's pre-political career: her biggest achievement was finding a way to cheaply boost the volume of ice cream using an additive extracted from seaweed that was cheaper than using more milk. When you get into arguing about whether people were true ideologues or just going through the motions, you are essentially offering religious arguments. Being Irish and having later in lived in London for a decade, I have little sympathy for ideological purity as a political desideratum. All politicians are self-interested to some degree. It is naive to think you can discuss the quality of others' motives in objective terms.


There is theory and there is practice. Before suggesting any additional funds for SBA loans, I would suggest you read David Einhorn's book "Fooling Some Of The People All of the Time". In short, when the govt. guarantees loans, loan standards go down and fraud goes up. Yes, there are checks and balances in place but motivated parties find ways to scam the system. It is a travesty how much wastage there is in the process.


And for a real life example, just take a look at Fannie May and Freddie Mac.


Perhaps if it were a national system that is centrally-controlled and disbursed end-to-end, fraud could be rampant; but if it were placed in a credit union-type "trusts" managed by each participating states, it would cut down alot more on the inherent single-point-of-fraud scenarios you envision, or at the very least contain it to the few fraudulent areas.


In 5 years all of those trusts will have merged into Small Business Loans of America Corporation, and all the loans will be sold on the derivatives market within a month of origination, and an army of loan brokers will individual figure out how to massage the paperwork originate a bogus loan and collect a commission.

We've done this already.

At best, we might have the benefit of the fraud benefiting a million individuals, like in the housing bubble, instead of a handful, like in the S&L days.


Just stick to the simplified health care, and leave out the credit idea.


So the problem is training, and a passivity-inducing misconception of "entrepreneurship". And the solution is:

1) A flood of government equity, distributed by those ever-so-entrepreneurial bureaucrats. There is, of course, no chance that the same people who brought us ethanol subsidies ("so stupid not even the Soviets tried it"), the Fannie Mae housing bubble and the $3000 hammer won't screw it up.

2) A no-cost-to-government expansion of Medicare, which I'm sure has some Canute-like power to push back the tides of adverse selection. For efficiency and quality of service provision, please refer to sarcasm in point 1).

3) Tax credits for jobs created -- there was a day when this sort of thing was called "profit", which entrepreneurs were allowed to keep, but I suppose funding 1) and 2) will finally put paid to this dwindling concept.

Jokes about "liberals" would be easy, but unfair, as Congressional conservatives have been just about as bad, AND in violation of principles that should have guided them better.

Why on God's green earth would _programmers_ slap kludges like these on fundamental system failures? If someone proposed fixing bugs this way the collective sneering here would break the internet.

We've got billions (trillions?) already deployed in "education", whose product is widely understood as unsatisfactory at best. We just had a post showing that about 25% of the students at a well-regarded university are interested in nothing but the grade, and are so unprepared they can't imagine any way to get it on their own. Why not fix THAT?

And why is it that all fixes proposed amount to hurling more man-months at the problem?

I'm sure you mean well, and there's no doubt the problems are complicated, but seriously, this sort of thing lacks the thought I presume HN types bring to work every single day.


"1) A flood of government equity, distributed by those ever-so-entrepreneurial bureaucrats. There is, of course, no chance that the same people who brought us ethanol subsidies ("so stupid not even the Soviets tried it"), the Fannie Mae housing bubble and the $3000 hammer won't screw it up."

It would be put into a trust, disbursed and managed as a credit union by participant states and guaranteed by the NCUA, not centrally-governed.

And, all of those "waste" slags you have against the government are exactly why my proposal would be decentralized and managed on the state level by default. The $3000 hammer is swallowed into the Pentagon, which is why it's dysfunctional. Decentralized management by default makes the program work effectively: spread the "risk" geographically rather than in one silo.

I think you just fundamentally oppose government action in any scenario because of your political leanings (likely libertarian from the attitude), which is fine, but to write such vitriol while simultaneously offering nothing of your "if i ruled the world" solution smacks as being simply obtuse for trolling purposes.

"A no-cost-to-government expansion of Medicare, which I'm sure has some Canute-like power to push back the tides of adverse selection."

So, every small business is filled with sick people who would enroll because they can't afford private insurance outside?

I'm proposing that it would be a financial boon for SMBs because they can get better rates through Medicare for their group than from private insurers. Bonus: there would be healthy people enrolling in the program who don't need constant healthcare services.

"We've got billions (trillions?) already deployed in "education", whose product is widely understood as unsatisfactory at best. We just had a post showing that about 25% of the students at a well-regarded university are interested in nothing but the grade, and are so unprepared they can't imagine any way to get it on their own. Why not fix THAT?"

Oh, so the answer to fixing economically bloated and unsatisfactory education is to do what exactly to the bloated and unsatisfactory education system? Yours doesn't seem like much of a solution. It's actually a non-solution, no offense.

"I'm sure you mean well, and there's no doubt the problems are complicated, but seriously, this sort of thing lacks the thought I presume HN types bring to work every single day."

You took time to write about how terrible I am for even back-napkinning some solutions, without offering anything in return. Thanks for the gainsaying: I learned alot about you.


You know, your own response raises the elaborated problems to your proposals. But you're so committed to your preferred end-state that you've flipped the obvious answers. State bureaucrats will be smarter than federal? because they're "decentralized"? Healthy people will pay premium for a program that will take them at any time? C'mon man, really?

This stuff doesn't even link up with your first explanation of the problem.

You can see the details enough to see the problems, but you see the implications and don't like them. So you find ways to overlook them without even noticing what you've done. You are outsmarting yourself. It's precisely because you are so smart that you have driven yourself to positions that make no sense.

THAT is the problem. I could pose mathematical proofs of a contrary approach and you'd still fight it.

Because you are smart enough to see that going after the real problems in education would touch some fundamental and touchy subjects: parental responsibility, what "equality" and "fairness" really mean, whether we _can_ educate _everyone_, whether "teachers" as currently organized as a benevolent as they claim. And so on. Lord only knows what the final answers would be, but even talking about this stuff would be enough to blow the Progressive Coalition into a thousand tiny pieces. So we don't go for the central, systemic problems of the main program, we write scads of bug-catching programs to sit atop them and intercept the bugs. That would never work in code, and it won't work for government.

THAT is the offer. You are going about the problem all wrong -- your approach goes against everything you (meaning "you" as a stereotyped smart, problem-solving, elegance-seeking, Hacker News ur-type) do so well, day in and day out.

Now, I apologize for the grandiose generalizations and stereotyping and the reckless assumptions about goals and mental state. I just don't understand why such brilliant people are so routinely taken with "solutions" of a pattern they wouldn't tolerate for 15 seconds in their work. Go ahead, downvote this too, I suppose it deserves it -- but holy mackerel, I just don't get it.


"State bureaucrats will be smarter than federal? because they're "decentralized"?"

"Smarter"? Why would they need to be "smarter"? They just need to analyze a business plan just like any other bank would (which is why I propose a "credit union" style of management and disbursement), but you're saying it will be rife with waste and fraud. I disagree, and can name this very network upon which we disagree as just one counterexample of a government funded program (centralized at that!) that works, and that likely would've never happened without soul-crushing R&D and deployment expenditure from a cabal of private network competitors. In other words, it wouldn't have happened, from the "session" OSI layer back to physical. I can also name other government developments (Polio elimination, Interstate System, Railroad, hell even the USPS up until about 4 years ago) that made America the engine of the world economy; but it belabors the point and you'll just disagree anyway.

"Healthy people will pay premium for a program that will take them at any time? C'mon man, really?"

They will if they can get a discount over Blue Cross for similar coverage. Why do you think people shop at Wal-Mart? Because of the happy faces?

You say you're all about business, try this exercise real quick: go and see how much it would cost to get coverage for a four-person startup through a private insurer (remember, get like for like coverage) vs. premiums for Medicare. See the difference? Now calculate it if one of the four has/had cancer. Not so fun.

"I just don't understand why such brilliant people are so routinely taken with "solutions" of a pattern they wouldn't tolerate for 15 seconds in their work"

Your design pattern, if I can suss it out from your comment about "equality" and "fairness" and "educating everyone", is that you want simple human nature/nurture to win out against educating all children (even and especially corner cases like poor and problemed ones).

"So we don't go for the central, systemic problems of the main program, we write scads of bug-catching programs to sit atop them and intercept the bugs. That would never work in code, and it won't work for government."

First, comparing educating children to bug-catching programs is asinine on it's face; secondly, there are a number of successful companies out there that have legacy code to maintain that is rife with bugs. Not only that, this code often can't even be read let alone maintained by anyone but a single person that the company then has to continually shovel money at to keep them from leaving. Wall St., the insurance industry (go figure since we're talking healthcare!), hell even the two most successful technology companies on planet earth by any measure (Microsoft and Apple) maintain buggy legacy code for ages. It's in fact, rare that they throw out the entire system. Yet, you want to do that for a country with 75 million kids.


You don't know anything about what I would or wouldn't do, because I'm focussed here on how we think about the problem.

If you think our current educational system "works", then why is it that our economic problems are poor worker preparation and inflexible attitudes about work?

If you are satisfied with how you're thinking about all this, I can't change that. Maybe sometime, when you're wondering why everyone is so stupid / evil that they can't see the brilliance of boosting small businesses with $10bn annual subsidy and their own single payer health system, you'll consider that maybe something along these lines helps explain the disconnect.

BTW, suggesting that the Postal Service was some kind of economic accelerator until 4 years ago is just ignorant. Their productivity is terrible, UPS & FedEx kicked their ass decades ago. They should have been relegated to rural / remote universal service, and the rest privatized, a long time ago. Think about why they weren't and you'll go a long way to understanding why political entities make lousy economic decisions.


The $3000 hammer is an accounting artefact. To make it easier they sold a package of gear to the military as if everything cost the same. So you got a very expensive hammer, and a very cheap gas turbine!


I agree with everything you said but the #1 obstacle to owning you own business is seed capital. You don't have to be a genius or rich to start a company, but you do have to be willing to take a potentially big financial risk to do so. People fresh out of college don't have 20k to live off of for 6 months before they can turn a profit on a business. The average household has 10k+ in debt; those people cannot start a business either.


I agree with you, but I think it's more dire than what you are painting. I'd rephrase something more like this:

People fresh out of college (most of whom are already carrying a 5-figure debt) don't have $60k to live off of for the 18-months before they (might) turn a profit.

I've been around VERY few businesses that were profitable at 6 months. Either you are digging out from the high initial capital costs (like a restaurant) or you're actually having to build the thing you want to sell. Going from inception to profitability in 6 months would be, at least by my estimation, remarkable.

Building products and launching services takes time. If we want to encourage entrepreneurs, we should be focused on getting them over those initial hurdles.


Even if they all had the money, 95% of them will fail. HN likes to focus on the success side of the equation - but with high risk also comes a high failure rate.

I know tons of people who started their own businesses -it's got little to do with seed capital and everything to do with execution. They had it, and they blew it, through bad decions mostly.


"People fresh out of college don't have 20k to live off of for 6 months before they can turn a profit on a business. The average household has 10k+ in debt; those people cannot start a business either."

For those grads, I suppose ycombinator and techstars suit them well. That's only a small part of the "Small Business" equation, however. There are cafe owners that need part-time help and need easy-access capital to help them over supply humps.

Not every inventor can get float money from crowdsourced places like kickstarter, either because their product is not "consumer-friendly" or because it's in a decidedly unsexy industry (like precision gauges, for example). And, while there are cool coworking or tool-borrowing libraries popping up, there are no cool "we'll work on your marketing, sales admin" places. Those take money. The SBA-for-all concept can help, I think.


I don't think seed money is the problem. You start a company in the cloud using basic plans that total to $0/month.


I should print this out and frame this on my wall: "Why our industry is insular and tunnel visioned."

Entrepreneurialism in the vast majority of this country, let alone the world, is not at all related to computers, the internet, cloud services, or any such hoo-hah.

We exist in a little tiny sphere in a little tiny corner of all that is small businesses.

The vast majority of entrepreneurialism that happens in the world has real costs and a need for real capital. Try running a corner store when you have no money to buy inventory, or pay rent on the space.


How do you pay your own wage?


You can cash in your Twitter followers for money, right?


Bitcoin.


Back in 2006 my brother and I started a business with $0 upfront cost.

1and1 at the time was running a deal for 3 years free hosting. We made a site on there, put up AdSense, made enough money to buy a domain. Then made enough money to upgrade to paid shared hosting, and then dedicated hosting. It's still profitable today.


Agreed. Lets also make sure that these new businesses stay employee owned. If newly created small businesses find success -- only to be bought out by the paragons of the current economic model -- we will end up cycling back into the same negative externalities of the current economic model. If they are bought out we will be back to the same unemployment level, with more public debt that was transferred to the largest corporations and their shareholders.


> America as it currently stands has a total, almost prideful disregard for education (public and higher) and technical training.

I don't think the US disdains education. They just don't like anything related to math or engineering.


I stopped reading when I realized you think we need more vocational training. I agree.

Here's another idea that goes with your thought: Why don't employers stop asking for every cert and piece of experience under the sun? Whatever happened to on-the-job training?

This exists in IT but I'm sure it is the same elsewhere.


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.


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?


> 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).


"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.


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.


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.


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


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.


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.


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.


"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.


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.


"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."

This isn't true. It's one of (if not the best) system for distributing wealth. Anybody can start their own company (look at all the startups on HN alone) with relatively little money and generate wealth for themselves.


I don't think there's any evidence that 99% will starve. Certainly not in this country. Our problem is obesity. This chart on Wikipedia is showing that though in income inequality is increasing, all quintiles are also increasing (inflation adjusted.) Not only that, but the TV's that you can buy now are a lot better than those you can buy in 1940, ditto for the cars, houses, apartments, etc. And food is dirt-cheap if you actually try to be cost-conscious about it.


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.


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.


So looking at this article - http://www.usatoday.com/news/nation/census/2011-01-06-us-pop... - 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.


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&...


I noticed the same thing (and posted as much) before finding this chart saying that the total quantity of jobs really is way below peak.

http://data.bls.gov/pdq/SurveyOutputServlet?request_action=w...

It was really sloppy of the article to use those number like that, but his point isn't invalidated.


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.


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.


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

The US sells plenty to China. Besides the odd cases like Chinese-made Apple products that are sold for a premium in China (after being shipped back and forth to the US), there are tons of things like cars, planes, food and medical equipment that add up to over $90b annually. They're one of our largest trading partners.


It gets better.

  3. The Chinese use the money we give them to buy gvt bonds.
  4. The gvt bonds are spent by the gvt.
  5. This spending is added to GDP.
  6. GDP appears to have gone up. 
     Without gvt debt, GDP is the same it was in 1998.


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


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.


"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.


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.


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.


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.


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.


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.


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...


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


I second this, great book.

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


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).


It's good to be a software engineer.


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


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.


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.


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.


> 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.


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.


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."


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


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


>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.


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?


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


The article sounds like the opposite, really.


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.


Forbes is not hacker news.


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


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


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.


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...

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.


> 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?


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 ..


Upvote for anything that blames Microsoft! ;)


incorrect and stupid article especially the title


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.


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?


Downvote me all you want so you don't have to face the truth. But if you truly want prosperity, you can't listen to the liars that got us into the problem, you have to listen to the people that knew there was a problem and had a plan to get out. http://www.ronpaul.com/2008-09-26/ron-paul-on-the-housing-bu...


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


>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..."




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