Anyone who wants to make the claim that technology is net killing jobs has to be prepared to answer the question: why now? Technology has been killing (but not net killing) jobs for centuries. It's possible that technology could start to net kill jobs. But why now, when it hasn't in the past?
Presuming things are different, I see five obvious answers to the original question (and "all of the above" is also an option).
1) The amount of regulation and regulatory burden has increased sufficiently between then and now, that new business relationships have a much harder time replacing old destroyed business relationships. I.e., it's now more expensive to hire a new employee.
2) It's a novel change in the financial side of the economy. Like, capital-holders now try to make killings by investing in the right HFT funds instead of trying to go out and invest in new businesses. Implausible? Maybe, but finance has changed a lot recently, so the difference, if there is one, might be there.
3) The amount of re-education required to get a new job has increased enough to be a killer barrier to re-employment, whether because of employers having imposed an arbitrary demand for bachelors' degrees or because the jobs are actually more complex.
4) Ricardo's Law does allow individual regions to lose as a result of tech improvements, because if someone else beats your comparative advantage, people will want to trade with them instead of you. There's nothing ahistorical about the Rust Belt having a persistent recession within the US. This is now happening to the whole US; people no longer want to trade with us, but China is growing plenty.
5) The Thiel hypothesis: Recent technological developments are intrinsically more boring than past technological developments; people are trying to build web apps that will sell to Google for $10 million instead of trying to invent the next "microchip" or "electricity". It's not that the 21st century poses a novel obstacle to forming new business relationships to replace old ones; rather, 21st-century technologies that obsolete jobs are missing a wow factor or wealth-generating factor that previously increased demand or increased total wealth at the same time as obsoleting jobs.
Shouldn't that be the Cuban hypothesis ?
Cuban in 2006
Cuban in 2007
Cuban in 2008
Thiel said it in 2011 ( or late 2010) if I'm not mistaken.
Stigler's law demands we call it the Thiel hypothesis.
(Stigler, of course, did not invent/discover it: https://secure.wikimedia.org/wikipedia/en/wiki/Stigler%27s_l... )
I'd say it's 95% that job losses aren't permanent, although I'm not sure 5 years is enough time to settle it. I'm perfectly willing to believe we could be in a recession/depression for the next 10-20 years. That has precedent in our and other economies. However, I'm not prepared to believe that--simply because I can't imagine what people will do--people won't end up doing something. Everyone likes to be productive, and humanity has a really efficient means of organizing labor to trade around everyone's productivity.
I am all for 95% or 100% unemployment, though, if such a fantastical reality can come to pass!
// It's like peak oil isn't it. We keep getting "we're at [or passed] peak oil" but then a new oil field or new extraction method makes this seem less likely. Thing is that oil will run out.
To me technological changes haven't converted in to less jobs because we've exploited those changes to increase resource use, and hence production. As natural resources falter then we can no longer have the increased resource use and so the removal of jobs via technological improvements can't be mitigated by the addition of jobs in new areas.
There are various resource pressures and financial problems that suggest to me that we're at the turning point. It would be nice to be wrong about that in some ways.
What odds would you bet on?
I'll lay you 10:1 that world GDP continues to trend up barring WWIII or other force majeure type event.
Some nations will net lose though. The American currency trades at roughly +25% worldwide due to stability/prestige, and the recent administrations are really doing all they can to undermine both of those. So, American could net lose jobs and net lose GDP (implausible, but possible). But worldwide? Massive increases.
So anyways, what odds on what proposition are you looking for, and what timeline? We're both semi-public figures, I reckon we'd both be good for the money :)
(Rest of the comment is insightful and huge fan of your work, rationality, HPMOR, etc, etc, etc. But I'll lay favorable odds on "this time is not different")
Edit: To clarify, I'm disputing this from the article as I think PG is: "Our new economy is shrinking because technology leads to efficiency over growth." I don't think it is. World GDP continues to massively increase. I also think if America would get out of making financial fuckery the top government and private priority and get back into the entrepreneurship/production/hardwork then the USA will continue to do quite well, too.
And this one.
Yes, there was a serious recession in 2009. In 2010, world GDP increased by 3.9%, according to preliminary World Bank figures.
I suspect this would resonate with a majority of Americans.
As an example, Brazil, China, India have actually been growing at rates that would be miraculous in the US, because they have labor-intensive industry and increasing oil supplies.
Old countries like the US, UK, France have barely moved the needle, and are scraping by through money-printing to finance massive deficits.
But it might confuse people into thinking it will.
#4 is inherently untrue, as the lower US dollar entices other countries to buy our stuff. As for "made in the USA" stuff, well, the Tea Party has ignored America's position as the third-largest exporter .
#5 is conceptual...I cant really speak to it.
I would put my money on #2, if only bc this fits with the anecdotes I've read from the Beige Book (credit conditions are high even though banks have money to lend). This is such a relatively boring story (relative to "the Internet has consumed everyone's jobs NOM NOM") that I'm not surprised that it isn't espoused more.
These days it appears that a lot of effort and innovation is focused on creating services that encourage the 'democratization of software development' which allows traditionally non-technical people to more easily create software and online services. Think Heroku, dotCloud, Twilio, etc. This innovation will continue to lower the barriers of entry into the new economy and allow normals to build.
When you hear people say 'this time it's different' it almost never is.
I feel, being in this field that requires constant learning (there are some jobs that require only static ability, e.g. COBOL mainframe), that we have a jaded view of what it takes to learn something new. Going from accounting to HR is a big leap, completely different domain (not like picking up iOS after doing server-side Java)
Someone should plot the time series of BLS occupational statistics, with the minimum required education/IQ levels for each job. On the one hand the IQ profile of the US is trending down. On the other hand, anecdotally job growth tends to be focused on those areas requiring high IQ, like programming. Squaring this circle may mean job growth outside the US.
Consider the following tidbit from the most recent national census: 50% of all babies born in the country right now are born into low-SES households (as defined as households dependent on governmental assistance, like food stamps). Forty-one percent of all babies born in the country are born to unmarried mothers (single-mother households being highly correlated with low SES).
The conclusion isn't that our generations are getting dumber, per se; it's that our generations are being born into poorer and poorer households. And the deck is pretty significantly stacked against someone born into a low-SES household.
Now, there's debate about causality in all of this, i.e., whether the existing population is actually getting poorer, or whether the poor are simply outbreeding the well-off. Based on census data, it seems to be a little of column A, and perhaps a bit more of column B. Either way, the younger generations are starting off on worse footing. And that leads to lower IQ scores and decreased future prospects.
It is all out there, you have to fight for it sometimes and sometimes you are treated with suspicion just because you want to fight for it, but in the end, it will always be worth it, for posterity's sake.
Last time I looked, the flynn effect was still in full swing.
Right at the top is this excerpt from wikipedia:
"Recent research suggests that the Flynn effect may have ended in at least a few developed nations"
This from neuroanthropology.net:
"A long-term rise and recent decline in intelligence test performance"
and so on
Please speak for yourself about trolling wikipedia. I simply responded to the lazy GP's need for a citation with a google search of a relevant phrase. That said, the very article from which you quoted a sub-section has this in the header:
"Recent research suggests that the Flynn effect may have ended in at least a few developed nations"
This claim carries a citation on wp.
Your link at the bottom about educational attainment is completely irrelevant to the discussion. Intelligence and formal schooling are two different things.
If we run out of jobs, people will start wearing coats made of auditable solved captchas or something, just to prove that they commanded more human labor than the next guy.
A second answer might be that we're only now fully realizing the effects of globalization -- outsourcing, moving factories to China, call centers to India, etc... due to the advances in telecommunications and whatnot. Perhaps there was an underlying structural shift as early as the 90's, but we were coasting on the housing boom. I recognize that that's a rather hand-wavey argument. IANAE.
1. Businesses are hesitant to invest in capital.
2. The housing market is terrible right now--especially housing starts.
3. Jobs related to #2 and #3 generally go to lower-skilled workers. They're the ones who are struggling right now (with something like 16% unemployment for men without a HS diploma).
This isn't the end of the American economy, people. Demand is low for goods produced by low-skilled, American-based labor. Things will improve with time.
I'm torn about QE3. There's little evidence that businesses are waiting on it specifically to make capital expenditure decisions; it seems, from reading the Beige Book and other anecdotes that companies might be waiting for the other shoe to drop. QE3 would just adjust the shoe on the foot a bit.
I imagine the majority of American workers have a HS degree, at least.
Not true. The Industrial Revolution was preceded (in England) by an Agricultural Revolution that displaced peasants in large numbers to cities where they didn't have nearly enough work. (Many emigrated to the New World.)
Thus the later economic boom was preceded by economic hard times.
And its not just wage that must be considered. There are hidden costs of hiring and possibly having to fire an employee, all of which have gone up in recent decades.
People imagine that employers can be made to do all kinds of costly things without effect on employment. Or take home pay. And in good times, it may seem like there are no such effects.
But its in the bad times that consequences are felt, long after the legislation has been passed. If an employer cannot make money hiring a particular worker at the minimum legal wage, the worker isn't going to be hired (legally, anyway).
This has nothing to do with technology adoption.
(HN submission: http://news.ycombinator.com/item?id=2850520)
There's a table called "U.S. Occupations with at least one million workers (2006)". Every type of job there has existed since 1948. There are no new job categories created with over a million workers.
Jobs, and therefore people, have specialized more, that's all.
One might well ask, why not now ?
Given a(t)t, where a(t) = rate of new jobs created per year
-b(t)t, where -b(t) = jobs lost due to technology per year
Problem is, the function a(t) is stable and predictable over time, because human populations are generally sigmoids ( http://en.wikipedia.org/wiki/Logistic_growth )
Whereas the function b(t) feeds on itself ( http://en.wikipedia.org/wiki/Autoregression ) If you deploy technology, and said technology is successful, you then deploy more of that technology, which is then more successful, and so on...At each step, b(t+1)>b(t).
Take a decent time window...say going back 50 years, for which we have reliable data for a(t) and b(t). Run the simulation. You will posit that '-b(t)t' beats 'a(t)t' at some point in time 't'. Why should t be 2011 ? Well, why not ? The curves have to meet up someplace. Might as well be 2011 :) However you slice it, they will intersect and from then on you will get net negative jobs at some point of time. Whether that's 2011 or whenever is immaterial.
Say only 10% of humans had any skill whatsoever that would provide value that could not be more cheaply obtained by deploying technology. Say it got further, to 1%.
Imagine a world where only a handful of the most incredibly skilled humans can do anything better (i.e. more cost effectively) than a computer, and the rest are rightfully unemployed, because they have nothing to offer. A world where your 20 years of hard earned programming expertise is utterly worthless in the marketplace because an open source program exists that will read a plain language spec and spit out a good approximation of the same code you would have written, except without buffer overrun bugs and it'll be done in 20 seconds instead of three weeks. Where "lawyer" and "doctor" are professions-that-were because humans aren't fit to compete, and where one by one all the other careers considered unassailable today are swallowed up by increasingly sophisticated automation. Sure, we might be left with a few professions that require physical humanity (people will still want to see people in entertainment, for instance), but in the end, most of the wealth in the world will not be created by humans in any direct way.
You might start to understand why it's not such a terrible idea to move closer towards a socialist society as time goes on - eventually we're all going to be unskilled labor, possibly even unemployable, and we're close enough to that point (I'd say within a couple generations, at the outside, barring some major disruptions that hold back further technological progress) that we should probably start thinking about the consequences.
And who will write the spec? And why will it be any easier to write the spec than the program? "Plain language" is a misnomer. Idealistic people try to write legal contracts in plain language, but it doesn't work.
Sure, there will be people at the top of the command hierarchy dictating what needs are being met. That doesn't mean that spec-writing jobs will provide gainful employment for as many people as are employed fulfilling specs these days.
As for why it will be any easier to write the spec than the program, it already is. "Plain language" is exactly how people spec things out all the time these days, it serves me quite well when I'm getting work assignments ("The Fizzle button is making the back end Furble on Tuesday nights, fix it!", or "Add a coupon code field to our order page and an administration tab to add codes to the database - just make sure the same code can't be used more than once").
Idealistic people try to write legal contracts in plain language, but it doesn't work.
People tell their lawyers in plain everyday language what they care about achieving with a legal contract, and the lawyers fill in the blanks based on what they know. Similarly, normal people tell their programmers what they care about achieving, the programmers fill in the blanks. Sure, we can't automate that filling-in-the-blanks super well yet, and yes, there often has to be some back and forth to figure out what the person really wants (this is, IMO, on of the most important things missing in a lot of machine learning approaches, as human thought - especially language processing - involves a lot of feedback between systems and backtracking), but to me it's not hard at all to imagine all of that being extremely successfully automated once we have thirty years more NLP research under our belts and laptop computers that would put the most expensive Hadoop cluster you could construct today to shame...
Then again, I'm one of the weirdos that thinks that the "problem" of intelligence can be solved by a much less sophisticated algorithm than the one that our brains implement, under the theory that typically evolution only ever seems to do one thing well: create highly complex solutions to medium difficulty problems.
That's a ridiculous argument...and remember, the example was ridiculous, talking about a world where only 10% of people had jobs: People would build -very difficult- things to find employment. (incidentally, we're all of us doing harder(cognitively) things than our ancestors to find employment today.)
I think the sentiment, not explicitly conveyed in the article, is that "there are less jobs for the number of employable people". And there lies the rub. Perhaps net total jobs is still on the rise, but the rate of population growth is that much faster than the rate of jobs created. And it's not flat rates, but changing rates as well. When technology provides efficiency (I'm thinking scale, atm), it would probably push rate of jobs create slightly lower. With more people on the planet, instead of competing with 1 other person for 1 spot, a person might be competing with 10 other people for 2 spots, hence the sense of joblessness, and a culprit to blame.
The rate of population growth is declining, especially in developed nations. The UN estimates that the world population will peak at ~9B in the 2050s and then begin falling. Also, the demographic balance is changing because there will be fewer young people in the job market.
So perhaps the jobs/people ratio will improve, but these same demographic changes (and increasing life expectancy) pose big questions about fewer workers supporting healthcare and government services for more older people.
Countries like China and India a good place to export our jobs, at a minimum, because they're stable enough. Even if we could trade with China in the late 1950's, the Great Leap Forward would've made such trade very unattractive. Why would I want to export my jobs to a country where the average citizen isn't even fed properly, assuming I could?
I posit that as countries such as North Korea and Libya stabilize, the global job growth rate will have to increase in order to main the job-to-employable-people ratio. A positive, but stable, job growth rate would not be enough.
I could be totally wrong about this in that there will always be some minimum political chaos in the world, but I'm an optimist :)
'past predicts future' is not exactly commensurate with a point of inflection. perhaps a real-life example can help - a medical transcription firm in India hires 25 Indians to transcribe medical records. I then sell the CEO a copy of voice recognition software. He is so happy with the results, he fires 24 and keeps 1 Indian to fix the occasional transcription typos! After one month, he finds the transcription error rate is unacceptably high, so he hires one more Indian to fix typos. For the past 1 year, these 2 Indians & that software has chugged along, making money. Now that CEO is happy, making money, and has opened his second office in India, with another copy of the software & just 2 more Indians to babysit and bugfix! True story. Any way you cut it, that's net job loss. First, a bunch of housewives in Atlanta who transcribed for a living lost their livelihood, but you can rationalize that by saying, hey atleast 25 Indians got hired. But 23 out of those 25 Indians lost jobs & 1 piece of software ended up doing the job! Now unless the Atlanta housewives and the 23 Indians end up working for the voice recognition software company ( a very remote possibility ) or end up in a brand new job ( even more remote possibility ) given their limited skills, there is definitely a block of time when there is net job loss.
Ofcourse eventually some of these people will learn new skills and/or are absorbed into new jobs etc...atleast, that's the hope. But the intervening reality can't be wished away. I still think this story will have a happy ending, but so far I don't see it.
You don't see the happy ending yet because this was the worst financial crisis since the Great Depression. We love to trash finance types, but banks facilitate a lot of transactions--including home purchases and capital expenditures. When they hurt, our economy hurts in some non-obvious ways.
If you assume that for a portion of the people in the transcribing job, that the transcribing job was the best marginal fit, then some of them don't re-enter the job market. Others have to take a worse job. If they could have been in a better job, they likely would have been. So their employment has gotten worse. May be quality, may be compensation, may be available time. Something's worse for them.
There are a number of reasons this is not the case. I'd wager that a main reason is "re-training takes too much time." If a worker gets laid off, gets his Associate's, and starts something new, well, that's a net positive scenario. He or she produces output in a new field, while the transcription software replaces their old output. Net positive outcome.
You call it "handwaving," but the above happens to many people. This is not some accounting trick economists have developed.
I'm not sure; that's what I want to explore.
But I think the scale enabled by the net creates such profound efficiency and disintermediation. craig newmark sees himself as a philanthropist of classifieds; his (estimated) $100m business helped disrupt more than $13b in classified revenue. The funds are a dividend for the transactors so the value is not gone, but jobs are.
Look, too, to Clay Shirky's cognitive surplus. In the comments on this post at Google+, Eric Reasons brought up entertainment as an example. They get a double whammy. The people formerly known as the audience (TM Jay Rosen) now have more ways to entertain/distract themselves and can "consume" less entertainment. They also can make more entertainment, ending the scarcity and providing no end of free competition to the industry. There will be much more entertainment, but fewer jobs from it.
Look at retail. Practical necessity required there to be brick-and-mortar stores with much inventory and sales staff across the country as a channel of fulfillment. No more. RIP Borders. Now it is much more efficient, of course, to consolidate and fulfill commodity goods at a distance. Thank you, Amazon. Again, fewer jobs, which won't be replaced.
Transparent pricing in the market will lower prices and reduce the ability of retailers to benefit from pricing opacity. More efficiency. Less profit. Fewer jobs.
Even in my "trade," education, we know what's coming: open courseware will replace third-rate lectures.
Yes, I'm well aware that say, in the shift from agrarian to industrial economies, efficiency shifted jobs from farms (greater efficiency) to factories (greater wealth). The factory equivalents today -- startups -- create great wealth but with fewer jobs.
I say none of this to criticize technology. It's just reality. I will argue as I explore this topic that we must look at policy alternatives for more investment in entrepreneurial ventures and education (of both youth and displaced workers).
But now we have a set of platforms(computers themselves, the operating systems, the networks, etc.) for all digitally encodable forms of information. We keep building new platforms on top of these systems; and the rate at which the platforms appear is increasing; 10 years ago you could not do the kinds of trivially focused apps that have become today's cliche.
This is a point of fundamental difference from productivity advancements in the industrial era; better machines meant more resources mined, more goods finished and delivered. And communication remained expensive throughout that period; I can recall long-distance calls still being relatively costly in my childhood(80s, early 90s).
In contrast, better information implies doing more with less, in the physical sense of time and effort. Taken to its literal extreme we have Twitter as an example - a broadcasting medium without the formality and overhead of TV or radio.
And if our advancements from here on out are mostly based on doing "less" and not "more" physically, the whole way in which our economy is measured today is going to become increasingly wrong.
Advances in ocean-faring ships led to colonialism. Train travel led to a rapid westward expansion of the United States. New farms get established, and new towns crop up to serve them, needing homes and markets to be built, a local newspaper, a local grocer, a local bank, eventually local radio and television stations. Similar basic economic structures get replicated in many diverse geographic locations. Once one place gets saturated, people move and start up another franchise of the town model.
Skipping ahead fifty years or so, the web means I don't have as great a need for the local bookstore, the local newspaper, the local television or radio station, the local bank, etc. There are plenty of businesses that I still need locally, but they in turn don't have as great a need for the local advertising agency, the local newspaper's classifieds section, the local accountant, the local lawyer, the local travel agent - assuming there's still a local owner, with a local HR department, local management structure, etc.
Of the startups you see, how many are going to end up with a business whose operations need to be replicated in many geographic locations? How many are ever going to be more than an office in the Valley or NYC and maybe a few sales outposts? How many pitches are you getting that require large marginal outlays on labor in order to scale, and how would that requirement affect your investment decision?
I think the mainstream is surprised by this technology shift, because technology is finally replacing non-tech industries that didn't expect to be replaced. Nobody was surprised when blacksmiths were replaced, because they were "old tech" being replaced with "new tech". When brick&mortar retail or law get replaced, there's a lot of gnashing of teeth.
We've picked all the low hanging fruit - in technology and resources.
Our cars haven't really change much in 100 years. Same basic engine, just added computers (we did that in the _1970'_).
We're only incrementally improving technology (cars with navigation).
Our current innovations (Twitter, FB, Google) don't produce many jobs and in fact reduce number of jobs. People will spend the night on FB vs going out to dinner, a movie, etc. You don't need to go out to cure boredom/socialize.
Also, Social websites don't produce much commercial activity (compared to say the automakers building Detroit into a first tier city in the last century).
We're patenting one click check outs, but we haven't found a good (economical at scale) replacement for the major components of our economy - e.g. the internal combustion engine and fossil fuels.
The US has has an abundance of cheap land an resources PLUS the country was lucky enough to grow up in the industrial revolution when technical innovation was relatively easy and world changing (compared to now where it's much more incremental).
We're going to stagnate until someone (US,Chinese,Indian,other) makes some big leaps in alternative energy and other advanced technology.
Web apps aren't going fix our economic problems (however useful they are).
Bull. There have been significant improvements to cars in just the last several years, and the 1970s (and before) were a complete disaster for cars. There has been great progress. Today's cars are way better than anything preceding them, beginning with build quality, through handling and braking, and ending with emissions. Not perfect, but vast improvements.
Is there more to do? Sure.
These things take time, and the progress may seem slow to many of us, but massive infrastructure changes cannot be accomplished quickly. Hey ... who is going to deny a poor person the desire for transportation, even if it is with a crappy old car. As much as we might want it to be faster, societal change is slow.
If humans were required to learn, say, programming in a week, they would completely fail. Learning an industrial job in more than a decade to transition away from farming is much easier.
It could be that the skills needed to be employable are too difficult for people to learn in the time available. I think this learning time is fluid. It could be a function of cultural expectation of self reliance, for example.
What is funny is that plenty of roboticists point to an inflection point in the future when service jobs become displaced, which will dwarf these problems. The change will be bigger and the time to adjust will be smaller.
Historically technology has displaced humans, but there has always been something that is cheaper to retrain humans for than it is to build machines for. For one thing you can explain to humans what to do, and they could turn an incredible amount of computing power to figuring out, following, and filling out your instructions. Computers simply have not had anything close to a human brain.
However as the complexity of our machines goes up, and the costs of automation go down, eventually we'll come to a point where it is cheaper to design and build a machine for a new job than it is to train someone to do it. At that point humans will be displaced and new jobs won't show up for it.
By a back of the envelope estimate, we're perhaps 10-15 years away from having computers with the raw computational power of a human brain. Software will follow, and the successes of things like Watson suggest that it won't take that long for software to catch up enough to be economically useful.
Once it is possible to train a machine faster than a human, the cost of buying and running that machine puts a cap on what that human can expect to be paid. Given Moore's law, that cap will descend painfully quickly after it first becomes an issue.
I disagree with this premise. IMHO, it is much simpler: we as individuals lived beyond our means for 20+ years by borrowing money against our houses and against our personal word (e.g. credit cards). We as governments lived beyond our means in terms of direct spending as well future spending promises (e.g. promising retirement/pension/medical benefits that are funded by borrowing or not funded at all). Big companies also promised retirement (pension) benefits that assumed a continuing growth of the investments that backed the pensions - that didn't work out so well.
"But why now, when it hasn't in the past?"
In the past, we relied on general growth exceeding our indebtedness, "growing" our way out of our debt. This is a game that cannot go on forever... and the longer it goes on, the worse the crash will be at the end. Right now, it is looking pretty tough.
In short, we lived beyond our means for 20+ years. We will have to live "below our means" for a substantial number of years to balance our past spending against our current and future incomes... and that assumes we have the will to make the hard decisions to truly reduce our spending rather than claiming to reduce spending, but the "reductions" are 2/5/10 years in the future.
A big part of living "below our means" is buying less, paying down our debt, which means lower demand and thus lower job levels.
The real scare for me is the potential for another, larger bubble: the "Credit Bubble". A bubble exists when asset price inflation rises beyond what incomes can sustain. A bubble represents people abandoning reason and prudence for hope and greed. (http://www.chrismartenson.com/crashcourse/chapter-15-bubbles)
The Credit Bubble will pop when the sum total of all of our society's debt prices (read: interest) exceeds our ability to pay. Experts think this could happen anywhere between 2015 and 2020. When that pops, the housing bubble will look minuscule.
The prudent should prepare now. Buy food storage. Become self reliant. And get out of debt!
Yes, but if you take into account the 9% inflation in India, the savings might be a net loss.
As was pointed out to me earlier in another HN discussion, the only reason why the Indian government guarantees a seemingly too good to believe interest rate of 9% for the savings accounts of their senior citizens is because that rate cancels out inflation.
So I think you are correct that there will be a net increase in jobs, but it may take quite a while for developed countries to experience this. In the meantime, they are on the look-out for explanations.
I'd say that it hasn't in the past because up until 60 years ago, humans were the decision makers doing everything.
The article posits a broad trend. Short term boom and bust fluctuations will always happen.
Right now the IT industry is mostly making things cheaper and to some degree faster (you no longer have to wait until the next days paper to get to know what happened yesterday) however most of what is produced are final goods and there is only so much of the which can be consumed; whereas the amount of steel you might use if it were free is likely to be many thousands of times higher than today (since manufactures would use it everywhere they could) you aren't going to read even 50 newspapers a day if they were free -- you don't have that much time.
The same is the case with games and television -- you don't have the time to play more than a few hours a day at most so it doesn't matter whether Farmville is much cheaper than going to the chinema.
So the only way it seems different to me this time around is that today most of what is produced falls under my self created economy of final goods whereas previously much of the innovation and improvement has happened earlier in the value chain.
One notable exception to this seems to be open source server software (and computers in general, although they now seem to be much faster than the average person needs) which makes it much cheaper and easier to start a tech company (indeed patio11 famously spend $60 on bingocardcreator.com) but at the same time these companies also typically makes a lot less money than the companies they disrupt.
Short answer: technology destroys jobs for dumb people and creates jobs for smart people. Until now this has been okay, because there have still been enough dumb jobs for all the dumb people. But as technology continues to progress, we (without genetic engineering or eugenics) run into the point where we have more dumb people than useful things for them to do. There are no jobs doing manual labour, and the dumber members of society aren't smart enough to perform the new jobs of maintaining the robots which do the manual labour for us. What, then, is the use of these people, and what do we do with them?
It sounds like you're only considering high-tech jobs, like computer programmers or engineers. Those aren't all the jobs that technology creates, not by a long shot. Think about pizza deliverers, call center workers, fast food workers, etc.
We now have sufficient technology in all areas to allow for both; the global distribution of knowledge working, sufficient advancements in production technology to increase output efficiencies in specific areas that centralization of output for the global economy can occur (e.g. agri output from say brazil supporting a large % of global soybean consumption - and manifacturing in China supporting a large % of global doohickey consumption)
We are reaching a change in the overall model of economies, where previously each nation was duplicating a large portion of the industries as their production was only enough for internal consumption.
If you look at the entire planet as a single resource zone, then naturally you will have uneven distribution of resources, production, knowledge, etc... thus uneven distribution of labor to support this.
If we could see a heat map of the globe's resources to people to markets to [name a factor]... etc. but weighted by their pull in each direction, then maybe we could better model how the global economy really looks.
Extra Credit: weight the flow of this map to energy dependence and you'll really see how fragile this little world is.
True efficiency emerges from high productivity when the technologies employed are thoroughly understood and applied properly. And that takes time.
Disruptive technologies increase productivity too, but stunt the emergence of efficiency by hindering the thorough understanding needed.
The last significant disruptive technology affecting jobs was the adoption of the internet -- circa 1997. Since then, organizations have had a lot of time to understand their technologies and improve upon them. I believe the layoffs we have seen in recent years, both in the office and on the shop floor, reflect that.
Don't confuse a contraction of investment with "the end of human labour", and then find a correlation with changes in technology. It's fallacious reasoning.
In the past, one of the most significant limiting factors on business growth has been the cost of human labour, and technological development has focused on working around this limitation, eliminating manual jobs and creating jobs improving the technology.
However, as the world population grows and certain very important finite resources, such as fossil fuels, become severely depleted (especially fossil fuel reserves that can be extracted with less energy than the fossil fuel contains), these resources become a more important limiting factor than human time.
I therefore predict that in the future, far more work on technological development will go towards sustainability, and less will go towards minimising human labour. Employment will rise, while the price of anything which is not sustainably produced will rise in real terms relative to the cost of labour.
Due to the relatively higher costs of energy intensive transportation, I expect that there will be some degree of reversal of globalisation with respect to physical goods (but not other industries). Technology will probably play a role in allowing one family or small local community to do locally what currently takes a global network of large companies.
I think inequality will still be a real risk long term - if we ever reach the point where the food production system can be completely automated, and everyone had at least enough technology / capital to produce what they needed to survive and be healthy, poverty would be eliminated - but if only a few people owned all the capital, and squandered most of it on luxuries while others starved, that would be a significantly worse outcome.
Jevons paradox is that "technological progress that increases the efficiency with which a resource is used tends to increase (rather than decrease) the rate of consumption of that resource". Watt's more efficient steam engine increased the consumption of coal, the cotton gin increased the consumption of slave labor, and virtualization has increased the consumption of servers. If technology can increase the efficiency of human labor, won't it increase the demand for labor as well?
The problem, of course, is the 10-20 years between "there are too few jobs" and "everything we need is available" and governments need to actively work to support populations through it. Unfortunately, very, very few governments seem to be able to look to the future.
Why now? Because the technology is finally competitive with humans across a wide range of tasks. Yes newer, some new jobs opportunities do open up, but they're often jobs that those displaced are simply incapable of doing.
I think that the widespread criticism of consumerism is the sign of an important event : now that we have a car, a fridge, a computer, a TV, more clothes we need, hot water, and a fully equipped bathroom, we just don' have any more demands.
If the population had the same demands as in 1700, it would be trivial to fulfill them. It would require maybe one day of labor per month per individual. Our demands grew faster than our production capacities, making the working week just a bit shorter, but now the demands do not increasing at the same pace as our productivity.
We have just reached the point where our material needs are fulfilled and we demand immaterial things : free time, healthcare, etc...
Could this be the point of inflexion toward a post-scarcity economy. I really wish.
In 1100's europe, there was land that was cleared for cultivation and forest. Most land holdings had areas of wilderness. They cleared it as the population increased. If the landholder could have instantly increased the population, he would have put the new people to work clearing land and planting crops (probably via leasing it to them as a landlord, or some kind of serfdom, but the mechanics of that don't matter here). So, the number of 'jobs' available on a given landholders property might have been 5000, while the population at the time was 400. There were more job openings than there were people.
Later, factories pulled population away from farms and improved farming allowed the land to feed more people than actually lived on it. This reduced the number of farmers needed as a proportion of the population, so if the population were the same as in 1100, the 5000 jobs we had before might have dropped, perhaps to 2000 jobs, or rather, food prices would have dropped so that lots of people no longer saw farming as the best idea. However, the population had increased greatly. My hypothesis here is that the number of jobs that could have been productively filled was still higher than the population.
This process can't continue forever. Sooner or later, the number of jobs simply crosses over the number of people looking for work. In history, I can imagine a leader, seeing lots of able bodied, desperate, and incredibly cheap manpower seeing an opportunity to raise an army and attempting to expand their own wealth by expanding their lands. That was a natural brake on the population line. Today, thankfully, we don't have any mechanisms that drastically reduce the population whenever people get desperate, there isn't wide areas of undeveloped land that can absorb as many people as we have over above the jobs line, and technology continues to increase productivity at a respectable rate.
So that is how I explain why the jobs line can cross over the population line now, and why we may now be in a situation where we might expect to have less jobs than people who want jobs for a long time.
The divergence is that to form a single job a knowledge worker requires far less capital compared to a manufacturing job. A developer needs 10k in equipment to be productive compared to 100k's for a manufacturing job. When you actually adjust for the US regulatory and tax environment the gap increases even more, making overseas manufacturing a no-brainer.
Two hundred years ago, most people worked in agriculture.
Then came technologies such as the McCormick Reaper, Whitney's Gin and Newcomen's engine - away went the vast majority of that work.
Yes much of it was replaced with something else and much of what replaced it was more pleasant, but the conclusion that the jobs which replaced agriculture are permanent is not forgone.
 The technology upon which jobs depend in the modern era is finance, and that has been largely diverted to purposes other than creating jobs in the US over the past several decades.
In discussing potential Medicaid cuts in New York, advocates claim that over 12% of employed people in NYC are in healthcare. I have no idea whether that's true or not, but if so, it has real negative implications.
So its not technology that's the problem, it's the fact that we're going nothing to produce new wealth, and are exporting our wealth overseas via the importing of most manufactured goods.
Up till now, you couldn't really outsource the job cheaply enough. Now, it's cheaper to build something on the other side of the world and ship it here.
The current technology revolution is even more overarching -- yes, there are new jobs being created, but at a fraction of the existing job base. This is not just a "claim" -- it's verifiable fact that can be easily concluded by perusing corporate employment ranks (GM used to employ nearly 1M workers -- contrast that to a modern internet company or even modern corporation which have been diminishing in employment ranks since the 90s). Review the government Labor department jobs reports -- most of the jobs created (outside of health care) are the kinds of jobs easily replaced by robotics / automation. The only damper that prevents a greater rate of transformation is the inexhaustible supply of cheap labor -- the presence of a humans willing to work at fraction of another, a seemingly bottomless pool. Might not be relevant for skilled jobs (though it is, at a lesser degree -- non immigrant visa workers supplanting American programmers for instance -- note that I am not making a case against immigration, just that immigration does have an economic effect on native workers).
See [Robotic Nation](http://www.marshallbrain.com/robotic-nation.htm) for a good summation of this -- yes, productivity and efficiency rise at an aggregate level, but the benefits do not accrue equally to all.
But there should be a point in the foreseeable future at which technology will progress too quickly for mortals to keep up, despite the best education and economy. It wouldn't be the first paradigm shift of this magnitude. At one point in our past human population increased dramatically from farming, so even if people wanted to go back to hunting they could not. Then towns sprung up because farmers learned to produce a surplus. Then there wasn't enough land for everyone who wanted to farm.
Similarly today, we can have some people "farm" or do the essential work and produce such a large surplus of food, raw materials, technology, etc., that others will be freed from jobs, just as ancient towns were freed from farming.
Frankly we could make such changes with today's technology, but the economy and culture may not be ready. Instead we create contrived jobs.
A great deal of human labor in general is spent organizing information. Every industry from construction to tourism. Every scale, from villages to corporations.
It is fundamental to the very concept of "work", and it is being rendered obsolete very quickly thanks to high internet penetration rates and mobile computing.
Ford, and every other company, ran a 48 hour work week in the united states until Ford decided his factories were efficient enough that he could hire more people, pay everyone the same for 8 hours less labor, and thus sell more cars. Most every industry followed.
Now we've nearly a tenth of the workforce unemployed, but the story people tend to ignore is the actual hours of employment demanded per capita. The far scarier story than the United states unemployment is its underemployment, where people are willing to work but only get a few hours. Employers want to employ more people...but they can't fill more labor-hours. They can split those hours up, and because of that, a lot of the job loss is hidden.
Does anyone know of any other animals losing their jobs to robots?
I think we vastly overstate the importance of training.
Being a farmer, I enjoy following farm-related discussions. Farmers spend just as much time talking about the shortage of talent as tech companies do, if not more. What is interesting about farms is that the job needs to be done in a timely manner no matter what, so you have to hire the best you can, and hope they become good at the job eventually.
Being a software developer, I also enjoy following tech-related discussions. We read story after story of people going from absolutely no experience to profitable software company in weeks, yet we still believe that years and years of training are required to work on even the simplest of projects.
Tech companies come with the luxury of artificial timelines. A tech company can leave a position unfilled for months or even years without any significant impact to the bottom line. Your software codebase isn't going to shrivel up and die or your warehouse of stock isn't going to expire if it takes an additional month or two to complete a feature.
There is no reason why anyone with a few days of studying software development cannot join the team. We just don't need them. We can wait and hire the guy who scaled out Facebook and developed Watson while working on iOS on the side. That is the shift in employment we are seeing and no amount of training is going to resolve the underlying problem.
Maybe now, unlike ever before, computers and robots can do most of the tasks that (relatively) unskilled humans are capable of, for less than minimum wage.
But as we get better doing what we do, as we become more efficient we need less people to do a particular job.
Now without new types of Jobs being created by new technology, efficiency can net kill jobs
Another point to consider is that other factors are surely at play that accelerated the net killing of job, such as outsourcing and so on (outsourcing of course, is make available because of advancement in IT and communication)
Well we are living in exponential era, everything that happened in the past has been fast forwarded exponentially. Fast Fast Fast forward, the rate is exponential.
Look at last 10yrs & compare the growth 20-30yrs ago, or rate of global warming, or how fast you travel today or efficiency in communication, or how much time did google take to become threat to Microsoft, or facebook to google, or even youngest billion air!
You name it! This rate can be catastrophic for us.
Because increases in consumption are no longer able to keep pace with increased productivity?
But what if we reached a point where one labour saving machine is replaced with even better labour saving machine before it had a chance to redeem lost jobs?
I anticipate transition of jobs and money toward trivial things. In 10 years John will cut hair of James for 1000$ and James will groom dog of John for 1000$. In the meantime theyll both enjoy nearly magical devices they bought for 10$ because they were made by robots.
Same can be seen in almost all industries.
For centuries this trend was offset with appearance of new kinds of production. New fields opened new markets and new places for work.
Lets ignore the current situation and ponder where does it lead us. It is inevitable that in the future most of day-to-day stuff we use will be produced by robots with minimal up to none human oversight.
There is only that much that we can consume. There is only that much of different kinds of produciton we can require. And we can not all be working in a creative capacity, inventing new stuff and inventing new markets. Inavitably a day will come when it will be technologically possible to supply all day-to-day the needs of world's population with stuff and services supplied mostly by robots.
What will happen then?
From several hundreds years ago, when people produced mostly for themselves, to the distant future when we all be serviced by robots and efficient production chains we see a definite trend. Somewhere along the path there should be disruptive events for this to happen, when a 'tension' produced by efficiency leads to massive losses of jobs.
For most of the time during the whole history the argument "it is not different then the previous time it happen" will be valid, but there will be definitely times it wont be the case. And it is possible that now is one of those times. Rise in effeciency must lead to loss of jobs eventurally. May be the time is now.
Oh, and this future is not necesserily a very dark one. After all, having most stuff produced effectively only means that most of the population will not have to work. Mey be it will lead to large portion of the population being a "dead weight", burning their life in leasure, and small energetic minority engaging in moving us forward, I don't know. May be it will lead to a large production 'surplus' that we will use to colonize the solar system and beyond? May be something else...
But I think we need to start thinking of what the society will look like when most people will not have to work to lead a decent life? What incentives will we need to invent to still have enough people to move forward? How to prevent degradation? I don't think artificial limits on automation and technology is the answer, but we might eventually come to this. I can see a politician introducing a SaveTheJobsBill to outlaw massively automated factories. We need to start thinking about it now, before it actually happens.
Because technology != technology.
No, it's fear. Banks are afraid to lend, and so SMBs can't expand. Corporations, sitting on trillions of dollars, are afraid to hire because they think it's too risky.
Going to have to disagree on that one. I recall twenty-some years ago, the death of manufacturing due to robotics was a hot debate and something discussed all over mainstream media. The warnings were sent loud and clear.
Which always leaves me with concern. Why did the people in manufacturing not take the time to retool their skills over the past two decades when the fate was clear? When the technology industry ultimately suffers the same fate, will I see the signs and move on, or will I be left struggling to find work too?
50,000 BC: your "job" (finding food) so dominated your life that your entire community followed it around.
20,000 BC: farming began. Your "job" is in the field by your house.
1700 AD: agricultural revolution. Technology allows smaller number to produce food. This allows industrial revolution. More specifically, this creates surplus food which means people can move. And so jobs can move. But it also means that areas that cannot produce food competitively no longer have to. Surplus food allows jobs to move to where the water wheels and resources are to commence industrialization.
1800 AD: The invention of the steam engine frees jobs from the need to be near flowing water: i.e. to move to where the resources are, or where the need to be. For much of the UK this was near ports as raw materials (e.g. cotton) came by ship. Bonus if the port is near a coal field. Again, areas that do not have cheap access to transport and coal, no longer have jobs.
1970 AD: Oil, giant ships, containerization and "free" trade allows jobs to move where wages are cheaper. Entire nations are uncompetitive at manufacturing.
2005 AD: Communications revolution. International calls are free. Service industry jobs move to where wages are cheaper. Entire nations are uncompetitive for service industry.
2008 AD: Computer Vision revolution: computers can now do picking and sorting that previously required a human.
201X AD: Robot Dexterity revolution: computers can now do fine motor skills, such as stitching shoes. Nike finally stops using child labor.
What is left for humans?
Technology has been killing (but not net killing) jobs for centuries.
Is this true? Or is it the case that as technology kills jobs, the unemployed find make work? That is, even if the unemployment level in a country has stayed the same, does it mean that the new jobs that the displaced workers perform are useful, or just a drain on society? Sure in the 19th century there were new non-make-work jobs. But today? Example: people working at Hallmark stores. Example: layer upon layer of middle and upper management. Perhaps it doesn't matter: if society can support make-work jobs, because of efficiencies elsewhere, then as long as people are employed it doesn't matter how. The problem would be if those make-work jobs could no longer be supported. This is what is happening: it is not in China's interest any more to support the vast inefficiencies of the US economic system. Make-work jobs are going away.
Finally, WWII: we destroyed most of the world economy to the point where the US was the world economy (ok, 75% of it). Does this have anything to do with the US having full employment (i.e. hiding technology's job kill) - and if so, now that the rest of the world has caught up, might we now see that the US economy cant support the make-work jobs?