by kublikhan » Mon 01 Aug 2011, 19:24:21
$this->bbcode_second_pass_quote('Outcast_Searcher', 'P')erhaps we are having a semantics issue here.
1). I went on to point out that the LACK of meaningful high quality education is THE fundamental problem in the employment issue. (I equate education with your retraining comment -- but private industry no longer tends to retrain (nor does government), which is a big problem).
2). I would argue that automation IS another industry, which to maintain, extend, improve, keep safe, etc. will require lots of HIGH SKILLED jobs.
It's not a clear one-for-one replacement of course, and my argument may be bogus. But this seems like another example of technology BOTH destroying old jobs and CREATING OPPORTUNITIES for new SKILLED jobs (and a higher standard of living for all) to me -- which fits right in with the buggy-whip analogy, IMO.
I generally agree with what you said, but I think the direct jobs created in the automation industry are insufficient to cover the jobs lost. This is not a big deal however. One point that I did not consider in my initial post is that productivity gains produced via automation will eventually get recycled back into the general economy. This will create new jobs in the process, many of which are higher paid and skilled than the displaced jobs. Of course you can have bottlenecks that retard this process, such as the education problem you mentioned. But I have to agree with you that in general automation does create opportunities for new skilled jobs.
$this->bbcode_second_pass_quote('', 'S')ome, echoing Obama, suggest even greater cause for concern today: since technology is now displacing jobs not only in agriculture and manufacturing, but also in the service sector, there will be no new job-generating growth sectors to employ all those who lose their jobs. But this view fails to recognize that savings from a more efficient industry, for example, the grocery industry, would flow back to the economy in one or more of the following three ways: lower prices (e.g., lower cost for groceries), higher wages for the fewer remaining employers, or higher profits. In a competitive grocery retail market, most of the savings would flow back to consumers in the form of lower prices. Consumers use the savings on lower groceries to go out to dinner a few times, buy books, watch movies, or any number of other things. This economic activity stimulates demand that other companies (e.g., restaurants, book stores, movie theaters, airlines, and hotels) respond to by hiring more workers.
This common sense view is borne out by many economic studies. For example, economists at the Federal Reserve write that, “Productivity grew noticeably faster than usual in the late 1990s, while the unemployment rate fell to levels not seen for more than three decades. This inverse relationship between the two variables also can be seen on several other occasions in the postwar period and leads one to wonder whether there is a causal link between them. The empirical evidence presented here shows that a positive technology shock leads to a reduction in the unemployment rate that persists for several years.” Likewise, in a definitive review of the studies on productivity and employment, the OECD’s Jobs Study: Facts, Analysis, Strategy report stated that, “Technology both eliminates jobs and creates jobs. Generally it destroys lower wage, lower productivity jobs, while it creates jobs that are more productive, high-skill and better paid. Historically, the income-generating effects of new technologies have proved more powerful than the labor-displacing effects: technological progress has been accompanied not only by higher output and productivity, but also by higher overall employment.” As consumers pay relatively less for goods and services, they have more purchasing power which stimulates a growth in other sectors, leading to a self-reinforcing economic expansion.