Friday, July 15, 2016

Checking In With Work’s New Age Issues in the News, May-June 2016

Four and a half years ago I released a book with the thesis that the jobs crisis was permanent.  I still stand by that, as although the official unemployment at press time was about double what it is now, other metrics have trailed.  Some have even got worse, such as the labor force participation rate, down from 64.0% in December 2011 to 62.7% last month.  The American Job Shortage Number or AJSN, which I invented in September 2012, has fallen since then only from 20.7 million to 17.6 million, with the portion of latent demand from people beyond those technically jobless up from 10.2 million to 10.8 million.  As even the most partisan Obama and Democratic-administration supporters agree that despite that 4.9% unemployment all is hardly well with the economy, it is to the credit of those interpreting the monthly Bureau of Labor Statistics data that net job growth has replaced the unemployment rate as the headline figure.  Accordingly, over the past several months, there has been a jump in publicized views on concerns I identified and evaluated in Work’s New Age.

On June 28th, The Atlantic published “Would a Work-Free World Be So Bad?”  It looked beyond the resurgence of guaranteed income commentary I wrote on last month, and considered the human side of near-universal joblessness.  It held that people’s problems could be much like those faced by retirees:  lack of purpose, boredom, malaise, and even depression.  Author Ilana E. Strauss compared this possible future to what all humans experienced up to 10,000 years ago, life as hunter-gatherers without separate concepts of labor and leisure, and to farmers before 1600 who “mixed work and play in their daily lives.”  Per Strauss, recreational patterns may move away from the likes of “beer and TV” catering to “tired workers,” education might also change, and families could be together for far more hours than now.  These thoughts add depth to the now-materializing trend toward futurist Herman Kahn’s concept of unpaid replacements for service jobs he called “quaternary” involvements.

The Economist’s June 25th issue devoted a 16-page insert to artificial intelligence, with rather melodramatic emphasis on whether that could “cause mass unemployment or even destroy mankind.”  It recapped automation concerns as far back as 1964, and documented that jobs likely to be lost would not necessarily be manual but “routine,” or algorithmic.  Both these perceptions, though old, are correct and worthy of repeating, even though artificial intelligence is still limited to identifying and following clearly defined sequences of tasks. 

On May 27th, CNBC had a story on one comprehensive solution to the permanent jobs crisis, shorter working hours.  It concluded that while such an experiment in Sweden last year seemed successful, with higher productivity offsetting at least some of the time shortfall, it might not work in the United States, as “the eight-plus hour workday ethic is embedded too deeply,” and full-time workers are actually on the job an average of 47 per week.  I can’t agree at all, as even a cut to 40 hours would be in the right direction, and that would call for base weekly hours of 30 or so.  I will leave to you to decide what the country would be like if we had not made improvements over the past couple of centuries due to previous practices being “embedded too deeply.”

Patricia Cohen’s May 25th New York Times piece, “Fewer Americans Choose to Move to New Pastures,” addressed why worker mobility is down.  She found some of the reasons, but cited “economists” as saying, as Yogi Berra might have, in effect that people not moving makes it hard for them to move, and also quoted a Notre Dame professor who did not understand that Facebook and LinkedIn are not proving poor substitutes for “personal connections,” but, in 2016, are those connections.  More important than almost any cause Cohen mentioned are four others:  that people don’t leave low-level positions if better ones don’t exist; that everyone will be more hesitant to change cities for opportunities that rate to last for shorter and shorter lengths of time; that the job market simply doesn’t want enough people in their 20s for many to move away from their parents; and, as mentioned by one article commenter, that full relocation packages are almost a thing of the past.

On May 24th, again in The Atlantic, the title of Derek Thompson’s “The Myth That the President Can Save the Economy” was enough to remind us that no candidate can be expected to do it all by himself or herself.  While our 2017 inauguree can push us in the right direction, he or she can’t repeal historic trends, and it is wrong to think that “5 percent growth will suddenly appear if somebody thinks of the right marginal tax rate.”  A good reminder this year.

A May 23rd article asserted that “The U.S is ‘basically at full employment.’”  Even occasional  readers of this blog can guess my view on that, which author Heather Long unwittingly reinforces by naming as still-remaining problems income inequality (a product of the hardly-over jobs crisis) and wages not increasing much (too large a supply of workers, whether officially jobless or not).  The AJSN shows that latent demand for work is comparable to times with 6 or 7 percent unemployment, and it may reach record levels with the next recession.

Finally, in on May 19th Daniel Altman took on giddiness about globalization in “Economics Has Failed America.”  He made many of the same points I raised over four years ago but without noting the cause of scalability, the post-industrial capacity to produce a million copies of a product for barely more in money or workers than a thousand.  Altman correctly noted that “job destruction” is not “healthy” as others have said but is one of the worst results of international trade, and that while “globalization reduces inequality among countries” it raises it within them.  None of this is justification for protectionism, but we still need to be fully conscious of these challenges. 

Are these articles good or bad for our job situation?  Except for possibly the regressive piece, all are positive.  As they will sooner or later require solutions, the issues here are well worth our attention now.  At times, the state of American jobs has seemed out of sight and out of mind – that is not the case anymore, and that is good for our country.   

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