Many of my friends are euphoric about the election results last night. Many are severely depressed. Overall, I think the results were better than the alternative, yet the most fundamental question we should be asking remains unasked. And if we don’t ask, we won’t find an answer.
We were told that both President Obama and Mitt Romney had plans to “fix” the economy. We’ve been told we have too much debt. This is true. We’ve been told there aren’t enough jobs. This is also true. Both men said their “plans” would create more jobs and reduce the deficit. But “jobs” as we know them are disappearing, and have been for decades and the deficit has grown under every president since Eisenhower, Republican or Democrat, with the exception of Clinton.
Leaving the deficit issue aside for now, I’d like to look at jobs. It would help if we know why jobs are declining here and all around the world.
At first, it was because globalization made it possible, and financially desirable, to move industrial production from wealthier countries to those that provided cheap labor. Manufacturing jobs shifted overseas in vast number. However, now that problem has taken a back seat to a bigger one. Manufacturers are returning to the US, but jobs aren’t. We have improved productivity to the point that we need very few people to do what used to be done by lots of people. Technology makes it possible for companies to be very profitable while hiring fewer and fewer people. This is not only true in the so-called “advanced” economies like the US; it’s also increasingly true in China and other rising economies
Which gets to the BIG question. What are people going to do? How will they support themselves if “jobs” as we’ve known them continue to decline? Even the low-paying service sector jobs will increasingly go away, replaced by more efficient, technological solutions.
Want to buy stocks? You don’t need a broker anymore. Just go online. The back-end analysis of stock values that was once done by skilled experts is now mostly computerized. Want to buy shoes? You don’t need a shoe store anymore with salespeople and displays and all that. Just shop online. Need your trash picked up? What used to take several men to do, can now be done by smart trucks with rapid hoists that do most of the physical work. Has anyone looked into becoming a travel agent lately? How about an on-staff trainer for a corporate HR department? It’s all available and being done online. Even education is increasingly becoming a virtual process.
These changes are not necessarily bad. In fact, most of them are good. You get better goods, cheaper, easier, and faster. Even in education, students can be taught by the world’s greatest teachers using technology - we just won’t need as many of them.
Which gets back to the BIG question. How is this new economy going to work? How will people support themselves and their families? What are people going to “do” when most of what we used to “do” is being done by very few people made massively productive by advancing technologies? That question wasn’t resolved last night. As far as I can tell, no one is even asking.