Think the post-recessionary “New Normal” is a bummer? You ain’t seen nothing yet …
According to a truly scary study by Oxford University economists Carl Frey and Michael Osborne, a whopping 47 percent of American jobs are at risk of being automated within the next twenty years.
Yes … you read that right. Nearly half of all jobs in the United States are in jeopardy of becoming obsolete within two decades.
Obviously this doesn’t mean all of these jobs will be automated – but it does highlight the headwinds facing an American economy struggling to rebound from the “Great Recession.”
Entitled “The Future of Employment: How Susceptible Are Jobs to Computerisation?” – Frey and Osborne examine more than 700 positions and assess their “probability of computerisation” as well as the resulting impact on “labour market outcomes.”
According to their research the three most at-risk employment sectors are service, sales and office support/ administrative jobs.
So yeah … nearly half of the workforce is about right.
Before we worry about the frightening future, though, America has to get through its uncomfortable present. Nearly six years after the official start of the “Great Recession,” America’s labor market has yet to stabilize. Sure the unemployment rate has declined, but labor participation is at a 35-year low – and a record 90.5 million Americans are out of the workforce.
Meanwhile incomes have plummeted as full-time positions have become harder than ever to come by …
47 comments
More regulations=More robots
A regulation a day keeps the jobs away.
Did regulations cause Henry Ford to use an assembly line? Technology marches on, with or without government regulation.
Robots didn’t exist genius.
Not only that, the assembly line was a response to the need to reduce labor costs to make the car affordable, which is exactly what the response is to regulation that increases labor cost.
So you think businesses aren’t going to try to reduce labor costs no matter what? Have you ever heard a business owner say, “well, I’d pay people more out of the kindness of my heart if it weren’t for those pesky government regulations.” That’s absurd.
The reason we have a minimum wage law in this country is because of the shameful wages business used to pay.
But that doesn’t mean all regulations are good and that we shouldn’t be periodically assessing regulations to make sure they achieve what their purpose is.
“So you think businesses aren’t going to try to reduce labor costs no matter what?”
There’s the opportunity cost of using upfront money to pay for automation, ie. the McDonalds drink carousel, that a teenager or retired older person used to do.
Automation in the short run is rarely cheaper then cheap labor, but when you push regulations into place that increases labor cost then obviously that makes the initial investment more attractive.
“Have you ever heard a business owner say, “well, I’d pay people more out of the kindness of my heart if it weren’t for those pesky government regulations.”
That has nothing to do with our conversations. A healthy economy creates demand for labor, PERIOD. No minimum wage laws necessary because in a healthy economy(unlike now) companies have to compete for workers via the FREE MARKET and pay accordingly.
Like all regualtion, all minimum wage laws do is create unemployment. As usual, the “extreme” test showing this naturally would ask the “generous with other people’s money” people as to why we do go ahead and make the minimum wage $20/hour.
They know why it is not. But they refuse to acknowledge that minimum wage plays a massive role in unemployment.
To nitpick your example, the drink carousel at mcdonalds doesn’t take anyone’s job away, it makes someone’s job easier.
I compared minimum wage rate increases with unemployment rates. The trend appears to be that when minimum wage goes up, so does unemployment. But then after a while, unemployment goes back down.
Perhaps with the increased wages, demand rises, then hiring picks back up. Perhaps there are other factors at play, as well.
You might get full employment if you eliminate minimum wage. But you’ll have an awful lot of people who aren’t making enough money to truly function in society. The welfare rolls will balloon.
“To nitpick your example, the drink carousel at mcdonalds doesn’t take anyone’s job away, it makes someone’s job easier.”
Sure it does, at a busy McDonalds they would have one person solely devoted to that function prior.
“You might get full employment if you eliminate minimum wage.”
I’m glad you admit the obvious, that being said, the definition of “full” is somewhat variable…but overall I believe we agree with each other.
“But you’ll have an awful lot of people who aren’t making enough money to truly function in society.”
That is strictly your opinion, contrary to popular belief there’s no one making a “dying wage”.
“Sure it does, at a busy McDonalds they would have one person solely devoted to that function prior.”
Not that I’ve ever seen. Everyone multitasks at those places.
“I’m glad you admit the obvious, that being said, the definition of
“full” is somewhat variable…but overall I believe we agree with each other.”
I’m not “admitting the obvious.” I’m saying it’s possible. What’s also possible is that wages would plummet, unemployment would stay the same, and business would pocket the difference. Think about it. Say your business needs 10 employees to function. One less, and everyone becomes stretched thin. One more, and that guy doesn’t have enough to do. Even if you could pay people less, why would you hire more people than you actually need to run the business? The only reason to hire more people is if they become necessary to make the business function.
“That is strictly your opinion, contrary to popular belief there’s no one making a “dying wage”.”
You’re speaking opinions as well. Unless you can provide concrete data that proves beyond a reasonable doubt that minimum wage increases unemployment. The 197 countries that have minimum wage laws are waiting with bated breath for you to prove that they’ve been misguided for all these years.
“Even if you could pay people less, why would you hire more people than you actually need to run the business?”
Well, let’s say there was no carrying costs for doing so…that is quite possible if you for example had a business that was doing repetitive, difficult manual work and an the “reject rate” of whatever you are doing goes up after 5 hours of work. Maybe I could run my business with 1 person for 10 hours, but it makes sense to have 2 for 5 for said reason.
If regulations are in place that forces me to now buy insurance for that 2nd person then his job has been regulated away, just like my McDonalds example.
You are making the case for what I’m suggesting.
“You’re speaking opinions as well. Unless you can provide concrete data that proves beyond a reasonable doubt that minimum wage increases unemployment.”
Fair enough, but 197 countries doing something a certain way doesn’t mean that it’s “right”. Further, my opinion has some reasonable basis in logic.
Some things are so axiomatic as to not require a study, or anything more than common sense. The test of extremes is usually enough.
If you think that minimum wage does not affect unemployment then why not raise it to $20, $50, or $100/hour?
You and I both know the answer to that, without a study. Obviously it MUST as a result work the other way. No study necessary.
“If you think that minimum wage does not affect unemployment then why not raise it to $20, $50, or $100/hour?”
If we can say that there is a min wage that is too high, can we not also say there is one that is too low?
You clearly have more faith in the market than I do. History shows that business will set wages as low as they can get away with. And when they have all the bargaining power, and the workers are desperate, those wages can be driven down quite far.
Just look at the market for illegal labor. You would say, I’m sure, that low wages for illegals proves your case. That regulation kills jobs. I would say that I’m right, in that business will pay as little as they can, even if they have to break the law to do it.
“If we can say that there is a min wage that is too high, can we not also say there is one that is too low?”
That’s my exact point, no one can say. It’s depend on a myriad of factors from skill level to industry competition.
The notion that anyone could, let alone should, “say”(and what we are really saying is MANDATE) what wages should be is completely preposterous.
“You clearly have more faith in the market than I do.”
It’s not a matter of “faith”, it’s a matter of what I think is fairest. While the “market” can be “right”, “wrong”, or whatever…it is simply a market.
It is not self interested, or corrupt, or thinking it’s “smarter” than everyone else. It’s an inanimate object/idea that simply functions, and from that perspective I’d rather try to figure it out rather than leave it’s “governance” to those that have time and time again proven inept…to the degree that they haven’t even balanced a budget in 42 years…let alone “manage” it.
In other words, I’m for decentralization. I believe in the wisdom of a millions of people making decisions best for themselves over a 536 people deciding what’s best for 350 million….and the free market is the only way to achieve the former.
Right on!
Just wait until someone invents the first Star Trek-style replicator.
Give me a replicator and a holo-deck and I’m set.
Well as long as its a Star Trek replicator and not a Stargate replicator.
Hmm……….and who is going to build WHAT..? ….who is going to finance….WHAT..? ….who is going to educate …What..?
…this article is just website fluff…
Technology displaces jobs, but it also makes harvesting goods and manufacturing products cheaper and more efficient, meaning the average consumer has more money left over to pay someone else to do something. Other jobs will appear.
When mechanized excavators were made, a lot of ditch diggers lost their jobs. Likewise, the railroad caused many horse-and-buggy freight companies to go out of business. It’s always a shock to a particular class of workers when technology makes a mechanical or computerized process more efficient than done by hand, but that’s a necessary byproduct of innovation and new technology.
Always better to be a warlord when peasants lose their stable employment. So much easier to make serfs.
I think you need to go back to the 1770s, Mr. Adams, because time has passed you by and you aren’t making much sense.
Fits–this is a common misconception: that technology takes away jobs that never return.
The reality is that technology sets people free to perform other jobs, and make the economy grow even more.
Would any one reading this article propose that we destroy all farming equipment and return to the days of the 1800s? Of course not.
Technology sets people free to pursue other ends; and as long as history keeps moving, people will likely always do with the time they have what they’ve always done before: find new things to do to make their lives even easier.
Sorry, not true… anymore, it simply de-couples supply from demand, the (technological and capital rich) haves from the have nots, and those dwindling private sector workers from those on the government payroll.. whether as a dependent, worker, etc.
How does technology “de-couple” supply from demand? Technology makes producing goods cheaper, thereby increasing supply. This, of course, pushes demand down, making it cheaper for the consumer to buy those goods. I’m really not following what you are trying to say.
Well, it’s basically Economics 101. If machines are increasingly making products worldwide, than who is going to have the purchasing power to buy those same products? The machines?! I mean, if you’re into large numbers of governmental dependents who’ll be able to purchase their machine-produced trinkets (think Wal-Mart) off of welfare – of course, at the loss of these same dependents’ freedom – than sure, have at it. Me? I’ll take a local based, craftsman style economy with those within it being much more reliant and free.
Please. Who will repair the machinery? Who writes the software? Envineering? Design? Prototyping? Maybe you should have taken econ 100 first.
Anyday you want to talk, discuss, and debate economics, I’m on it. I’m pretty sure I’m far more acclaimed than you at this subject. Want to tell me which of the three Factors of Production is most sick, worldwide? Want to tell me which of the three Factors of Production is even capable of serving in a “demand” capacity? Crawl back in your hole, fool.
Damn, ad hominem, and so early.
Yeah, never considered this. But then again, it’s Marxist. Ergo, irrelevant.
Oh yeah, I forgot.
SHUT ‘ER DOWN.
I ‘m pretty sure you have not earned acclaim in anything, and I am not even sure how one could be acclaimed at something.
Hey Bill, either retort my position, or STFU. Otherwise, you add nothing. I’m not into bragging at all; I was just countering Frank’s insiniuations that I knew nothing of economics. So again, if you’ve got something to add, please, add it. BTW, I usually agree with Frank.
“I am not even sure how one could be acclaimed at something”
Here’s an example, “In my mind, I am acclaimed.”
Notice that to be acclaimed, one doesn’t have to live in reality.
Pssst….maybe you should go back to college and get an economics degree Frank! You are positing very well!
Both Barbarossa and OGOB are forgetting that there are entire economics schools of thought backed by Phd’s that argue over the relationship of supply & demand and which comes before/after, their relationship, etc.
It’s a chicken/egg debate…and unsolvable.
Hence why it’s all “theory” and not fact…not a good place to try to argue from when there’s empirical evidence going both ways, topic dependent.
Supply and demand is an observable phenomenon…beyond that there are many factors that can change their relationship.
Well … the point I’m trying to make is that, even if there are growing pains, we are much better off with technological advances as a whole. I’m not really trying to get into an argument over supply and demand. Instead, it’s that technology betters our society even if there are growing pains in the process.
I agree with you 100% in that regard.
The big albatross around the world’s neck in the amount of money most gov’ts are taking from everyone.
If people were able to keep the 20, 30, 40, or 50% or more of the money they make the world would be a much better place.
And I agree with you completely on that.
Who is going to have the money to buy the machines if nobody is going to buy the products? Who will spend the capital in those machines? They won’t be built in the first place if there is going to be no demand for the products they intend to build with them. Economics 101, dude.
You are basically describing a dystopian end game that I saw in the Matrix; not the byproduct of technological advances that only occur because there is demand, not in spite of it.
You clearly know nothing about Keynsian economic theory which attempts to shift the demand curve up on the backs of ridiculous tax rates (on supply) as well as unbridled debt as a way to equalize higher levels of both supply and demand. But, you may ask, how does higher taxes not seriously impact supply? Well, it really does impact it. However, the government has softened this by initiating crony capitalism to pacify supply; and it has shifted much of these taxes to increased long term debt. Born from a depression, Keynsian economics is a vain but noble attempt to ward off periods of disharmony between supply and demand. Unfortunately, it is a theory that is too easily abused in practice. Seriously, think our current Keynsian-based Governmental house of cards is doing very well? i ask you, does this article and the worldwide econ. stats support my argument or yours and Franks?
I know enough about Keynsian theory and artificially inflated demand to know that it is a separate issue than whether technological advances will eventually cause economic ruin. So far, the discussion has been about technology, but now you have oddly thrown in Keynsian theory for reasons I don’t quite understand. What I get what you are now saying is that technology creates massive supply, that we feed with artificial demand, and it becomes this big nasty cycle that collapases. Well, let’s just talk about the technology part, because we know that will continue to progress, even if we don’t know how politically we will handle demand in the future.
Technology allows us to gather resources easier and use them more efficiently. It creates a bigger pie for everyone to share. While new technology may present some challenges for how we divide that pie, it’s hard to argue against the fact that technology has generally given us a better way of life. History supports this. We are better off having the wheel, trains, mechanized farms, and mechanized assembly lines. My guess is that we will be better off with the advances that technology will bring us in the future — even if some segments (the ditch diggers, the horse-and-buggy operators) lose their jobs in the process. Do you think we would be better off without technological advances? Are you really saying that?
I respectfully, though completely, disagree with you. Sure, technology is wonderful and I’m not bashing it whatsoever. However, the reality is that it does puts people out of work. (I mean heck, isn’t that even the point of technology?!). Don’t believe me about that loss of work thing, than read about the growing numbers of those on welfare, food stamps, etc. And yep, those are indeed Keynsian demand stimulant efforts, do you not agree? So yep, you cannot divorce technological gains from increasingly outlandish Keynsian demand stimulant efforts like the “Obama Phone”. Look, I had an idiot right wing professor in college who espoused a view similar to yours, ya know, that some jobs just will go away, and in their place, would be these great Apple-ish type jobs. Seriously, that’s not reality. Ever been to just about any small Pee Dee town or to Detroit and seen the number of unemployed who are essentially the collateral damage from agricultural and manfacturing technology marching forward? Again, I’m not knocking such technology, however, I’m not going to deny that it has no downside. And that downside? That an increasing number of Americans receive free government crap, have little purpose, create a disproportianate number of crimes, have ridiculously low test scores, and live in a hopeless ghetto-ized state, which mainly serves some politically.
Amazing that Joseph Schumpeter was on this basic theme 60+ years ago. Amazing how few people see it even still. We’re now mostly just a make work economy of crumb pickers, servers, administrators, entertainers, moochers, borrowers, law breakers, and law enforcement, which mostly serves to recirculate existing wealth. I’m not sure that’s necessarily all bad (it’s probably the inevitable result of capitalist efficiency) except that the massive borrowing we do to “stimulate” this non-wealth producing activity seems destined to result in a net loss, if not full blown calamity. Maybe there is some hope if we can shift to more sustainable production techniques, which generally ought to engage more people in constructive work, while somehow finding a workable blend of capitalist efficiency and socialist protections. Humanity is very flexible though, even if things do take a turn for the worse.
There will always be growing pains when a new technology displaces a group of workers. For those workers, yes, that new technology sucks. For everyone else, it’s wonderful because it allows us to buy that product cheaper. And technology may move us to the point where there are fewer jobs available. I’m not doubting that, and there will need to be policy changes to deal with those people left out in the cold, but compare the people without jobs today compared to those in the 19th century. Sometimes you have to look at the bigger picture.
Still relevant after all these years(Fits is too young to get it)…:http://www.amazon.com/Decline-American-Empire-Story-Series/dp/1878825003
“Vidal places a date–September 16, 1985–during the roaring, go-go, Reagan years–when America changed from a creditor to a debtor nation, and has been there ever since.”
Meanwhile, we have 30 million criminal illegal aliens running wild and free inside the USA.
Save yourselves, fools! You can not avoid this serious problem any longer. It is long overdue to get mean as a snake and throw out all the illegals regardless of the cost – and hunt down those who support them; even members of Congress!
Again, save yourselves. Nobody else will!
Alex Thornton Write in Candidate for Governor
This is basically the age old “be scared of new technology and computers” mantra in a “scientific” report.
If its half as bad as these posters here say it will..I’m renting guns and selling bullets if you’d all like to excuse yourself from the impending doom.