Saturday, November 26, 2011

The New York Times Discovers The Jobless Future

The Roman Emperor Titus Flavius Caesar Vespasianus Augustus, known to us as Vespasian, was responsible for beginning construction of one of the largest building projects of the ancient world - the Flavian Ampitheater, better known as the Colosseum. When offered labor saving devices to decrease the amount of workmen needed, Vespasian refused. Michael Grant reports in The World of Rome:

"[W]hen Vespasian was offered a labor-saving machine for transporting heavy columns, he was said to have declined with the words: "I must always ensure that the working classes earn enough money to buy themselves food."

How times have changed! Ancient societies have always engaged in massive public works to keep the idle workforce occupied, from the great pyramids of Egypt to the canals of Mesopotamia, to the walls of Cuzco, to the Colosseum. Excess labor was channeled into the building of great projects, many of which still remain. Generally, these were built by a state which was responsible for keeping such workers fed and housed, one that did not have to contend with the system of wage labor and private industry as we do today. Heron of Alexandria built devices powered by steam; the idea of using them to replace human labor never occurred to the ancient Greeks. Of course, one reason the wage system was less prevalent in the past was due to the institution of slavery, including chattel slavery and debt bondage. The remarkable ubiquity and persistence of the notion that one person can own another is certainly nothing to be proud of.

An important recently appeared in The New York Times. I didn't write it, but I may just as well have. It makes a good summary of the case I laid out in my inaugural posts What Are People Good For in one column: that there are just too many workers, and there is absolutely no way we will create jobs for all of them. The op-Ed is entitled The Age of The Superfluous Worker, and its author is an Herbert J. Gans, an emeritus professor of sociology at Columbia University (notice, not an economist):
AMERICA, like other modern countries, has always had some surplus workers — people ready to work but jobless for extended periods because the “job creators,” private and public, have been unable or unwilling to create sufficient jobs. When the number of surplus workers rose sharply, the country also had ways of reducing it.

However, the current jobless recovery, and the concurrent failure to create enough new jobs, is breeding a new and growing surplus pool. And some in this pool are in danger of becoming superfluous, likely never to work again.

The currently jobless and the so-called discouraged workers, who have given up looking for work, total about 15 percent of the work force, not including the invisible discouraged workers the government cannot even find to count.

In the old days — before Social Security, welfare and Medicaid — poverty-caused illnesses killed off or incapacitated some of the people who could not find jobs. Even earlier, some nations sold their surplus workers as slaves, while the European countries could send them to the colonies.

In addition, wars were once labor-intensive enterprises that absorbed the surplus temporarily, and sufficient numbers of those serving in the infantry and on warships were killed or seriously enough injured so that they could not add to the peacetime labor surplus.

The old ways of reducing surplus labor are, however, disappearing. Decades of medical and public health advances, as well as Medicare and Medicaid, have reduced the number of poverty-related deaths. The Iraq and Afghanistan wars have left many more service members injured than killed.

Over the past quarter-century, one very costly way of decreasing the surplus has been the imprisonment of people, mostly dark-skinned men, for actual and invented offenses. Felons are not often hired when they leave prison. Many, at least those who do not become recidivists, become surplus and then superfluous labor. As incarceration becomes less affordable for financially strapped states, inmates will reach surplus or superfluous status at a younger age.

Meanwhile, new ways of increasing surplus labor have appeared. One is the continued outsourcing of jobs to low-wage countries; the other is the continuing computerization and mechanization of manufacturing and of services not requiring hands-on human contact. Continuing increases in worker productivity add yet more to the surplus. So does the unwillingness of employers to even consider hiring people who have been unemployed for a long time.

When the jobless recovery ends and the economy is restored to good health, today’s surplus will be reduced. New technology and the products and services that accompany it will create new jobs. But unless the economy itself changes, eventually many of these innovations may be turned over to machines or the jobs may be sent to lower-wage economies.

In fact, if modern capitalism continues to eliminate as many jobs as it creates — or more jobs than it creates — future recoveries will not only add to the amount of surplus labor but will turn a growing proportion of workers into superfluous ones.
Robert Reich supplies some actual numbers:
Not to depress you, but our economic troubles are likely to continue for many years — a decade or more. At the current rate of job growth (averaging 90,000 new jobs per month over the last six months), 14 million Americans will remain permanently unemployed. The consensus estimate is that at least 90,000 new jobs are needed just to keep up with the growth of the labor force. Even if we get back to a normal rate of 200,000 new jobs per month, unemployment will stay high for at least ten years. Years of high unemployment will likely result in a vicious cycle, as relatively lower spending by the middle-class further slows job growth.
I'm glad to see this is getting more attention. Why should we expect the private sector to "create jobs", when all the incentives are to eliminate them? It never ceases to amaze me that these alleged Conservative hypercapitalists don't seem to know how capitalism works. The incentive is always to produce more with less workers. Thus, the private sector has every incentive to eliminate jobs, not create them. Employers only create jobs if there is a need for them, and who is to say that they need everyone? Why doesn't anybody get this? Here is a perceptive comment left on the Global Guerrillas Web site:

With automation and outsourcing for lower wages what little labor is needed the market is going to fail. This is because it can no longer create sufficient ability for people to consume its production. In theory some kind of social welfare state could prop up something like a market system but its proponents oppose redistribution on that scale so sooner than later bound to fall. Taking the developed nations as an example, all of them have high youth unemployment (20% plus) and mass chronic underemployment. This means that those people will never be useful as consumers to any scale, are useless as workers and sooner or later if they aren't already are going to be regarded as a threat. They will be likely murdered actively (via bits or military action) or passively (starvation, lack of ability to reproduce through artificial scarcity etc) by the elite class. The youth are waking up to this and trying to preserve a future for all of them. Whether this will succeed is unclear. Either way broad scale industrial capitalism is done for.

Broad scale industrial capitalism is done for. I agree, and we should be sowing the seeds for what comes after now. Instead, we are engaged in cargo-cult like behavior, hoping the olden days of the nineteenth century will come back as if by magic. We are seeing this system fail already- Reich's statistics above show the impossibility of creating enough jobs to employ the workforce. Employment increasingly becomes a game of musical chairs, with the seated players told to deride the standing ones as 'lazy' and 'unproductive'. Note professor Gans' description of prisons as a way to deal with the excess workers. We already imprison almost one out of every 100 people in post-industrial America. Are we really so wicked? Now you see why the drug war must be continued, despite opposition from both political liberals and conservatives. And notice especially this line: "In the old days — before Social Security, welfare and Medicaid — poverty-caused illnesses killed off or incapacitated some of the people who could not find jobs...Decades of medical and public health advances, as well as Medicare and Medicaid, have reduced the number of poverty-related deaths." Is it any coincidence that one of the the Republican Party's core platforms is the elimination of Medicare, Medicaid and Social Security and Unemployment Insurance? Is it any surprise they want to expand the military and ramp up the drug war, despite the enormous costs of these things? The Republicans may be telling their true-believer followers that if taxes are lowered on the rich the jobs will magically come back, but when the doors are closed inside the corporate boardrooms of their supporters, they know they will never employ enough people in the globalized labor force. The Democrats know this too, and the idea that "more education" and some unspecified "innovation" is going to save us is equally as nonsensical.

And we're not even taking into account resource limitations. Richard Heinberg, in The End of Growth, contends that we can no longer ramp up our consumption of certain raw materials to grow faster (particularly nonrenwable and nonreplacable fossil fuels). He also contends we're reached "peak credit" and limits on debt creation will also stifle growth. The two are related of course. I think he's a bit too pessimistic. Not all growth requires fossil fuels. However, new growth will not be industrial growth. This is key. Without industrial growth, there is no way to employ a mass population. Computers, biotechnology, materials science, gaming, etc - while such innovations will continue growing the economy somewhat, none will employ the masses of the population. As Charles Hugh Smith has pointed out, much job growth in the last decade was powered by debt, not productive activity. He also points out that much of our economy is useless friction.

Jeremy Rifkin in The End of Work gives a history of how labor productivity essentially outstripped the need for it already in the Great Depression. Essentially, we're been trying a large number of tricks to over up that inconvenient fact - the creation of the consumer society, with it's manipulation of emotions to encourage mindless consumption and hordes of advertising, marketing and service jobs; the suburbanization of America based on buying and selling of houses; the extension of unlimited consumer credit regardless of incomes to pay the money back; the outsourcing of labor to poor countries to push the prices of goods down; and the financialization of the economy decoupled from actual productive activity - these were all means to hide this fact. One-by-one they are unravelling. We're out of gimmicks, just as automation is ramping up to levels never even imagined before.

That's why I've described what is happening as The Final Solution for the working class. I use those provocative words intentionally, for I truly believe that is what's happening. Once you understand this, you understand why Republicans are doing everything in their power to increase the prevalence of guns in society- so the working classes can finish each other off in a standoff between the remaining employed and the destitute. Dramatic? I don't think so. And you know why the PATRIOT Act was passed and extended with bi-partisan support. As the desperate masses continue to grow, law enforcement will need the necessary tools to "eliminate" them and stifle dissent, as the commenter above describes. The Act was never about foreign terrorism, in fact, it's main use to date has been in the drug war. Over the past few weeks, we've been treated to a front-row seat to what we're in for thanks to the Occupy Movement. Expect a lot more of this in the future.

To give you an idea of how bleak it looks out there, here is a blog post by Harold Meyerson on automation:

Google, we learn from Monday’s New York Times, has a secret lab in an undisclosed location in the Bay Area where it is developing robots. We don’t know what the Google-oids are working on there, but we do know that the company has developed and built a driverless car that has already traversed 100,000 miles on California roads without getting either a ticket or a scratch.

Surely, though, there are innumerable now-human activities that could be performed efficiently, and eventually more cheaply, by robots. On Tuesday, the Robot Report (“Tracking the business of robotics”) ran a story that Foxconn, the Taiwan-based manufacturer that employs roughly one million Chinese workers who assemble all of Apple’s products (and many of Dell’s and other high-tech companies) has broken ground on a factory in Taiwan to manufacture robots. Foxconn hopes to replace 500,000 of its Chinese workers, the Report says, with 1 million robots.

If Foxconn succeeds at this venture, it will be yet another example of U.S.-developed technology going to Asia for manufacture—following, as it were, the Apple model. It also means that the kind of mechanization now prevalent in many of the remaining U.S. factories, which are far less labor-intensive than their Asian counterparts, will come to Asia as well, with consequences for Chinese employment that would doubtless alarm the Central Committee and countless others.

For that matter, suppose Google continues to develop its driverless car until its safety and efficiency standards far exceed those of humans, and then scales up so that the purchase of such robots isn’t prohibitively expensive. How long before bus companies, cab companies, and truck companies decide to go driverless? Suppose Google commercializes a robot that can drive a truck, pick up, and deliver packages? Does anyone believe the fiercely anti-union Fed Ex wouldn’t discharge its drivers and go with the robots? Does anyone believe that unionized UPS wouldn’t be compelled to follow suit? Which brings us to the U.S. Postal Service. Is this an unimaginable scenario for, say, 2030? I don’t think so.

Even as things stand today, we’ve not really replaced the manufacturing jobs that have been mechanized with higher-skilled ones. That’s one reason why lower-paying service-sector and retail-sector jobs have increased while jobs in manufacturing have plummeted. What happens when, say, five million transportation workers are replaced by robots, too? I hope that Google lab is pondering this question as well –- God knows, hardly anyone else is.

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