Monday, February 02, 2015

Will the jobs of tomorrow be about competing for scraps?

With my debating partner on a holiday, this might be the best time to sneak in a topic where he always, always disagrees with me; but then, hey, at least, he agrees with me on how enriching travel is ;)  May he and his shiny companion have a good time!

So, yes, back to that topic ... about the jobs of tomorrow.  I am no Luddite, but I worry a great deal that the technological advancements are not helping to generate meaningful and gainful employment.  There is economic growth, no doubt.  But, that storied middle class jobs and life might soon become a fable.

Thus, when the managing editor of one of the leading academic journals in economics, Journal of Economic Perspectives, writes worrying about similar issues, I am all the more convinced that the young are screwed!
The question of how new technologies might be combined with workers of all skill levels to create middle-class career paths for the future will manifest itself in very different ways in countries all around the world. But in every country, it's one of the fundamental challenges for the global economy in the next few decades.
And, yes, he takes on a global view--not any provincial American perspective.
Economies all around the world need to create jobs. In part, this is to continue the process of recovery from the Great Recession. In part, it is to address expanding workforces in the countries that are still experiencing population growth. And and all around the world, jobs need to be created so that those who have unsatisfactory or insecure jobs have the prospect of something better.
This is when you want to tell him, "how about we just stop right here and simply pretend that everything is alright?"  But, of course, you don't tell him that.
Within the private sector, it seems highly unlikely that hundreds of millions of new jobs are going to be generated in the manufacturing sector. The reason lies in what the report calls the theory of "premature industrialization." In past episodes of economic development around the world, a common progression has been for workers to move from agricultural jobs to low-skilled manufacturing jobs, and then on to higher-skilled manufacturing jobs and service jobs. However, in a world of high-technology, many countries without especially high income levels seem to have already seen a peak in their manufacuturing  jobs--and the peak level of manufacturing jobs seems to be happening at lower levels of the workforce.
I.e., even in countries with low labor costs, manufacturing won't ever be a big-time employment generator!  Which means, it all depends on the service sector.  Should we really ask him for his opinion on that?
The jobs question all around the world is the extent to which service-sector jobs can provide a broad base of careers for a wide range of skill levels. As the ILO notes in discussing the idea of premature deindustrialization, "the extent to which services can take over the role of manufacturing and facilitate the convergence of developing to developed countries is still under scrutiny ..." In high-income countries, there are concerns that service industry jobs can tend to be polarized, with options for low-skill workers who do service jobs where a physical presence is needed, and high-skill workers who make heavy use of information and communications technology, but a hollowing out of options for the middle class.
If you are feeling discouraged at this point, well, read no more.  Because, the prospects will look uglier when I quote Robert Reich, who is worried that the "share economy" is nothing but a euphemism for "share-the-scraps economy":
How would you like to live in an economy where robots do everything that can be predictably programmed in advance, and almost all profits go to the robots’ owners?
Meanwhile, human beings do the work that’s unpredictable – odd jobs, on-call projects, fetching and fixing, driving and delivering, tiny tasks needed at any and all hours – and patch together barely enough to live on.
Brace yourself. This is the economy we’re now barreling toward.
You want Reich to give some examples at this point, right?
They’re Uber drivers, Instacart shoppers, and Airbnb hosts. They include Taskrabbit jobbers, Upcounsel’s on-demand attorneys, and Healthtap’s on-line doctors.
They’re Mechanical Turks.
Reich's bottom-line?
the biggest economic challenge we face isn’t using people more efficiently. It’s allocating work and the gains from work more decently.
On this measure, the share-the-scraps economy is hurtling us backwards.
There is only one way out of this for me--I have to be absolutely wrong.  Dead wrong.  I hope I am wrong.  I wish I were wrong.  For the youth's sake.

Come on, you know where this is from!


Mike Hoth said...

So when you begin your post by stating that your debate partner is gone, you're asking me to fill in, right? You've put up with me enough to know that I am qualified!
In all seriousness though, while machines are certainly becoming more common I have to see the "robot work force" much like flying cars; even once we have the capability to create such a system, it would upset too many people and require so much regulation that we will never see it.

Gone are the days when Henry Ford's men assembled and painted each car by hand, replaced by robotic arms that cost little an work faster (and don't unionize!) but for every new device to replace a human worker there is a job opening for a human to explain how the damned thing works! Even the famous Mechanical Turk was run by a man hiding under the chess board.

Sriram Khé said...

Hi Mike, you are welcome to disagree and debate with me even when the other "argumentative Indian" is around ... well, given that I have now picked up an "argumentative American" as a reader and a friend, you will be all the more in a comfortable environment where we all argue ... we argue not like the we-oppose-anything-you-say idiots who represent us at DC but we argue because we genuinely want to understand the issues ... right? Or, will we have a meta-argument about this itself? ;)

There is more that I could have brought in as evidence ... but, didn't because the post was already a tad long. If you are interested, here is what the Economist had to say about the "on demand" economy a couple of weeks ago:

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