Wednesday, January 23, 2013

And One More Thing:

AP IMPACT: Recession, tech kill middle-class jobs:
The numbers startle even labor economists. In the United States, half the 7.5 million jobs lost during the Great Recession were in industries that pay middle-class wages, ranging from $38,000 to $68,000. But only 2 percent of the 3.5 million jobs gained since the recession ended in June 2009 are in midpay industries. Nearly 70 percent are in low-pay industries, 29 percent in industries that pay well.

In the 17 European countries that use the euro as their currency, the numbers are even worse. Almost 4.3 million low-pay jobs have been gained since mid-2009, but the loss of midpay jobs has never stopped. A total of 7.6 million disappeared from January 2008 through last June.

Experts warn that this "hollowing out" of the middle-class workforce is far from over. They predict the loss of millions more jobs as technology becomes even more sophisticated and reaches deeper into our lives. Maarten Goos, an economist at the University of Leuven in Belgium, says Europe could double its middle-class job losses.

Some occupations are beneficiaries of the march of technology, such as software engineers and app designers for smartphones and tablet computers. Overall, though, technology is eliminating far more jobs than it is creating.

To understand the impact technology is having on middle-class jobs in developed countries, the AP analyzed employment data from 20 countries; tracked changes in hiring by industry, pay and task; compared job losses and gains during recessions and expansions over the past four decades; and interviewed economists, technology experts, robot manufacturers, software developers, entrepreneurs and people in the labor force who ranged from CEOs to the unemployed.

The AP's key findings:

—For more than three decades, technology has reduced the number of jobs in manufacturing. Robots and other machines controlled by computer programs work faster and make fewer mistakes than humans. Now, that same efficiency is being unleashed in the service economy, which employs more than two-thirds of the workforce in developed countries. Technology is eliminating jobs in office buildings, retail establishments and other businesses consumers deal with every day.

—Technology is being adopted by every kind of organization that employs people. It's replacing workers in large corporations and small businesses, established companies and start-ups. It's being used by schools, colleges and universities; hospitals and other medical facilities; nonprofit organizations and the military.

—The most vulnerable workers are doing repetitive tasks that programmers can write software for — an accountant checking a list of numbers, an office manager filing forms, a paralegal reviewing documents for key words to help in a case. As software becomes even more sophisticated, victims are expected to include those who juggle tasks, such as supervisors and managers — workers who thought they were protected by a college degree.

—Thanks to technology, companies in the Standard & Poor's 500 stock index reported one-third more profit the past year than they earned the year before the Great Recession. They've also expanded their businesses, but total employment, at 21.1 million, has declined by a half-million.

—Start-ups account for much of the job growth in developed economies, but software is allowing entrepreneurs to launch businesses with a third fewer employees than in the 1990s. There is less need for administrative support and back-office jobs that handle accounting, payroll and benefits.

—It's becoming a self-serve world. Instead of relying on someone else in the workplace or our personal lives, we use technology to do tasks ourselves. Some find this frustrating; others like the feeling of control. Either way, this trend will only grow as software permeates our lives.

—Technology is replacing workers in developed countries regardless of their politics, policies and laws. Union rules and labor laws may slow the dismissal of employees, but no country is attempting to prohibit organizations from using technology that allows them to operate more efficiently — and with fewer employees.

Some analysts reject the idea that technology has been a big job killer. They note that the collapse of the housing market in the U.S., Ireland, Spain and other countries and the ensuing global recession wiped out millions of middle-class construction and factory jobs. In their view, governments could bring many of the jobs back if they would put aside worries about their heavy debts and spend more. Others note that jobs continue to be lost to China, India and other countries in the developing world.

But to the extent technology has played a role, it raises the specter of high unemployment even after economic growth accelerates. Some economists say millions of middle-class workers must be retrained to do other jobs if they hope to get work again. Others are more hopeful. They note that technological change over the centuries eventually has created more jobs than it destroyed, though the wait can be long and painful.

A common refrain: The developed world may face years of high middle-class unemployment, social discord, divisive politics, falling living standards and dashed hopes.
Now,  what are we going to do about it?

P.S. I would also include the loss of suburban sprawl building as a contibutor to the jobless recovery and the lack of mid-range jobs. Kunslter's right: that's driven the post-war economy.

BONUS: In case you missed it in the Noah Smith article in The Atlantic: The tech debate blasts off (a linkfest (toward a leisure society). And Lloyd Alter on Innovation Stagnation. Here's an area where Lloyd and I part ways.

1 comment:

  1. >Now, what are we going to do about it?

    Healthcare if the obvious solution, of course. I call it the Terry Schiavo economy. Millions of defective babies and brain-dead elderly kept alive on life support, awaiting the next resource crisis or flu pandemic, at which time these and other "useless eaters" will be allowed to die, via Katrina-like accidentally-on-purpose incompetence. Afterwards, a witchhunt for scapegoats (nurses and lower-echelon doctors) so as to deflect attention from the ruling class.

    The other obvious possibility is continued growth in the security complex. The feverish right-wing vision of race wars and hordes of dark-skinned criminals bursting forth from the ghettos and rampaging through the suburbs isn't entirely off base. Crime is already getting out of control in places like Oakland and creeping up from the impoverished flatlands into the hills with the million-dollar houses. Easy problem to stop if you want to stop it, but what if the ruling class doesn't want to stop it? More crime means more police means bigger government contracts means more opportunity for looting and crony capitalism. Power centralizes in the government, the government becomes the source of riches in addition to being controlled by the rich, the middle class is devastated by the crime wave. The last hope for a middle class lifestyle becomes a job with the police and other security forces, complete with a reactionary mindset that is sees everything in black and white (and not just figuratively) and which is incapable of challenging the powers-that-be, no matter how corrupt. Many rich people would be just fine with the state of affairs just described. Of course, as with the "useless eaters", if and when resources get scarce, order will have to be reimposed. Criminals who won't shape up and do something useful (like serve as psychopathic mercenaries) will be eliminated via a deadly flu epidemic in the prison and Katrina-like response.

    LOL at this idea of a leisure society, unless by leisure society you mean homeless people. They do spend a lot of time lying around in the sun, I notice.

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