Sunday, August 28, 2011

The End of Work

In 1995 economist, Jeremy Rifkin, wrote his book, “The End of Work” in which he predicted the global decline of the work force in the industrialized would. This happy occurrence, he predicted, would then result in people having more “leisure” time. New industries revolving around this new leisure market would then flourish. When I heard the initial buzz about this book the first thought that occurred to me was: Wouldn’t people working less hours therefore have less disposable income? Who is going to be able to afford all these “leisure” activities?

Fast-forward to the Recession of 2008. To a great extent Rifkin’s prospective has indeed come true. Rifkin had accurately had predicted the eventual demise of the middle class. Increased productivity, including “automation” (the old term) has indeed lessened the demand for labor. Even the “new” economies that are touted as the future economy do not necessarily require a lot of human labor.

The newer profitable companies with huge market capitalization, such as Google and Microsoft, don’t really employ a lot of bodies. The same is true for financial institutions; they too don’t require a lot of people to generate wealth. The hottest consumer items on the market today, mostly technological products like phones, touch-pad devices – None of them are manufactured in the USA. Even the Chinese are aggressively outpacing our “innovations” in solar and battery technology.

I think back to my first job out of college, working in a clerical unit in Greyhound Bus Lines. The manual sorting tasks required in my job back employed several dozen people to manually sort out paper ticketing trails. This kind of tedious work has been now wholly replaced by simple bar codes, scanners and computers. One can easily imagine how this simple technology across the board of bureaucratic functions alone has easily replaced millions of jobs that were once completed by humans.

Later after I landed a “real” job working in banking, I embarked on what I assumed would be a career. The assumption was that you worked your way up through the bank eventually becoming a loan officer. I am not sure how many of you have applied for a loan at your local bank recently, but if you have, you may have noticed a lot “empty space” where all those bank employee desks used to be. Today your application is faxed, or e-mailed up to a centralized loan approval center where a few designated “loan officers” actually make those decisions. Seriously, why would the bank want to staff all those highly compensated suit-and-tie bodies in the local branch bank when instead they need only lower-paid staffers to assemble and pass along your loan paperwork to the few main office employees empowered to make those decisions?

It is true that technology itself spun has off new career paths – and I followed one of them. When I later worked for the state Department of Human Services as a Welfare Caseworker, much of the paperwork was eventually shifted over to software running on networked personal computers. This productivity change opened up a new career path for me as a Computer Network Technician… and at a nicely increased salary. But even technology is subject to productivity enhancements. Eventually the work I did in the local offices was “centralized” elsewhere; less and less of the work I did as a technician in the field was deemed necessary. By the time I retired I felt like my job was little more than as a “PC mechanic”.

The national and global economies are still reeling from the aftermath the Debt Ceiling Circus. Economists are talking confidently of Double-Dip Recession and postulating on how long it will take for the economy to pick up again. Of course the two major political parties are even now strategizing on how the prolonged recession will play out to their respective advantages in the upcoming election of 2012.

My longer term prediction is much darker: It won’t matter which party prevails. The economy will never get better more than marginally or temporarily. To me, the fate of our standard of living on this planet boils down to a simple math problem:
  1. World population will soon hit 7,000,000,000.
  2. Increases in productivity in every sector (agriculture, technology, finance, etc. will continue to require fewer people to perform them. The living standard of middle class will continue to shrink and economies based on consumer spending will founder.
  3. Income disparity between the very rich and the middle and lower classes will increase.
  4. The last of the “easily obtainable” natural resources have (or will have) peaked during our lifetime.
  5. Food will become more expensive as bio-fuels consume more of the food producing land and resources needed to produce it.
  6. Global climate change will continue to have a negative impact on all of the above regardless of whether people “believe” its happening or agree on what the root cause is.
I have stated countless times that I believe that my generation, the Baby Boomers, has lived during the best times man ever has, and ever will have, on this planet. I feel sad for my kids and my grand kids; they're going to have a Brave New World to contend with.


Anonymous said...

Although I think you are right, it is very depressing. I was listening to a financial advice show on NPR yesterday. They were giving the "new" financial advice of saving, spending less and focusing on needs rather than wants. Soon after hearing that, there was a piece on how our economy is down because the demand for goods is down, there are no markets for consumer goods, and people are saving rather than spending money. Our economy must shift off of its consumer spending base. Unfortunately, there are few options. Don't see it getting better, and would love to hear some good advice to get through it in good shape for our kids. I think they are on their own.

CiCi said...

If I would let it, this would be so depressing. Nothing will stop what seems to be a sure thing in the future. I feel sorry for my grandchildren. I wonder if in their lifetimes they will have to fight for basic food while the idiot politicians ignore and deny facts the middle and lower class face every day.
Hubby and I live on social security income and have put ourselves in the best situation we could find to live the rest of our lives in peace.

Rain Trueax said...

I fear you are right. It's a transitional time and we can blame whoever we want but in the end the times they are changing. To add to it wealth is becoming centralized in fewer and fewer hands. Greed has been rewritten to be a Christian value. Charity is an option. Where does it leave the majority of humans? I shudder to think. We may not even recognize the culture of the future.

Robert the Skeptic said...

BackRow I heard the same story on NPR. My ipression was the the Powers That Be are lulling us into accepting less so they can have more. On the other hand, I never thought a totally consumer-based economy was sustainable.

Unlike those "believers" who have a false faith that things will always turn out fine in the end. The economy will come back ant things will be fine again - Really; why, because they always have? In reality there has been a steady decline in middle-class income for decades when one adjusts for inflation. Even with the housing "bubble" owning a home is just about out of reach of most younger people.

One of the downsides about being a Skeptic is having a realistic viewpoint of situations - indeed accepting reality can be downright depressing.

TechnoBabe Now imagine a future of not having your Social Security, or having it greatly reduced. You know, if I were among the top 2% of the wealthiest Americans, I would want to be very well guarded and armed.

Rain I think you have hit the nail on the head. America will be a very different place in a few very short generations. I see this country looking a lot more like Mexico or India in the not too distant future.

DJan said...

There is nothing to add to this depressing scenario. I am hoping that you are right and we will not live to see the really awful times ahead. Perhaps they are a gateway to a place we cannot see from here. I can hope, can't I?

Anne said...

The only problem I see with your analysis is this: if people can't afford to consume stuff what will keep the rich rich? Don't they need an ever growing economy to generate value for them to acquire and enjoy? Perhaps their grandchildren will suffer a fate similar to ours.

Robert the Skeptic said...

DJan Hope seems to be all we have at the present time.

Anne Welcome. The super rich don't make their money off the consumer economy but through investments. For example:

45.4% capital gains (equitites, real estate, etc.)
22.1% interest, dividends, rent
18.8% wages and salaries
18.7% business income

Donald Trump, for example, has made most of his money through commercial real estate, so his wealth is basically from capital gains. Likewise Warren Buffett, his capital gains are through equities (stocks).

Basically an ever shrinking middle class or increase in poverty does not negatively affect the super rich.

John Myste said...

You are probably right, but that is depressing. Let me suggest an alternative:

Space will become useful to us and new markets, resources, and frontiers we have yet to imagine will open up.

What comes next would be hard to predict, as the game would start anew.

America as we know it, may not be a substantial player (or it could be), and our winding down experiment in democracy may be replaced with new, unadulterated versions in China, for example.

A capitalist society will tend to consolidate its classes as it matures, and perhaps there is no solution to fix it once that happens except for to start a new capitalist society that is more successful, less mature.

We reward merit and government becomes more and more of a business. Those who are capable control more and more. The system fails to adequately provide a place for the majority of its citizens, who are, in comparison to the most capable, "have-nots."

A burgeoning democracy, like what China would become, would be far away from capitalist maturity and could easily overtake our failing democracy.

Capitalism would start over.

Midlife Roadtripper said...

Wow, read this just before bed. Rather depressing. I want to have hope that each generation will figure out how to keep us going in a positive direction. Think of when everyone came off the farm to the Industrial Age. Surely we'll have more times like that - just in a different direction.

Just call me Pollyanna.

Anonymous said...

Where are all of these new jobs that Obama talks about Robert ? I haven't seen any of them and friends have asked me the same question.And greed has never been a Christian virtue ! People who practice greed are of every religious and non-religious stripe. Let's tell the truth here not bash Christianity.

Anonymous said...

The worst part about all of this is that some of the people who are getting screwed over the most are complicit via their deliberate ignorance in their own screwing over. How else does one explain the Tea Party; and billboards erected shortly after Obama took office in 2008 with the caption under a goofy smiling George Dubya stating, "Miss me yet?" Do these people suffer from Short Memory Syndrome or what?

If it was not for smart and informed bloggers like you, Robert, I would lose my faith in humanity.

Kay Dennison said...

I think Rain nailed it. The thugs are trying to turn us into a Third Would country. I fear for our grandchildren.

Robert the Skeptic said...

John I think space will become increasingly out of reach as the demands on earth take more of the funds we would be putting into space programs. Bye bye shuttle program.

As far as New Capitalism, I believe that has started and is slowly migrating back to laissez-faire capitalism where the "unseen hand of the market" that the Libertarians like Rand Paul promote ever more picks the pockets of the middle class.

JobHunter Yes, I agree it is depressing. But we can't come off the farm again into an industrialized age in America, that is exactly China's destiny today. Our time has passed and that industrialized society we once enjoyed has moved overseas.

Anonymous Thanks for visiting. I guess I would return the question and ask where are all the jobs the "jobs creators", as John Boehner refers to them, who received huge tax breaks, which were extended under Obama? The super rich have enjoyed huge breaks under Bush and now Obama with the tacit understanding that this would create jobs - Ok, the ultra-rich HAVE their breaks, so where are all the jobs??

I didn't mention Christianity anywhere in my post, another commenter did. But one of my criticisms of Christianity is that they believe they should be immune from criticism. Though I admit that Christians often do good works, What I think Rain is referring to is this "Prosperity Gospel" that appears so pervasive. From the article linked above: "Prosperity gospel” is the teaching that God will reward signs of faith with health and wealth." Watch "The 700 Club" for a few minutes as Pat Robertson urges people to send in money, following his plea with anecdotes of people who did and miraculously received new cars, homes, etc. It is pretty disgusting.

Dissenter Exactly. I previously posted a link to a poll showing that almost 45% or Social Security and Medicare benefits did NOT recognize they were receiving Government Benefits! Though I am not completely onboard with Obama's policies, he did not create the financial mess our economy is in, he inherited it. The alternative is to allow Conservative policies which effective dismantle government by villifying it in the public consciousness; thereby giving free reign to private industry.

People forget, Capitalism is an economic model, not a form of government. Communist China has embraced Capitalism, they are still a Communist country. Private businesses are not Democratic.

Nance said...

In 2007, I began to argue with my financial advisors. I predicted that the economy was headed into a downward spiral that would make investing a joke. I said in May, '08 that we would not recover for at least fifteen years, which was close to my realistic life expectancy, and that the old portfolio models would be useless.

They, on the other hand, predicted that the stock market would recover quickly. They made fun of my gloomy predictions and talked me out of going to cash. (I finally "won" the argument at the worst possible time--firing them, pulling out of the market-- and wound up consolidating those losses.

The hell is, in a sense we were both right. And there lies the seed of our eventual revolution.

I think the country's only hope--such a slim one--is the kind of adaptability and innovative thinking that we cockroach-like humanoids are so famous for. Who could have predicted the boom of the fifties? It hung on the outcome of Operation Overlord. Or Clinton's nineties, which hung on...what the hell was that hook and where'd we put it?!

Anomalies, really. Let's hear it for some fortuitous anomalies.

Robert the Skeptic said...

Kay I believe a lot of us are in agreement.

Nance I know you always try to remain optimistic and I find it truly endearing. However we now live in a country where HALF the population denies the Theory of Evolution, where schools are concentrating on ensuring students pass the standardized tests, and we obtain virtually ALL of our political education from corporate controlled mega-media.

Yes, we were bastions of innovative thinking - but that was then, this is now. And as I pointed out with new innovative technologies (Google, Facebook and other information services, even green technology) these industries don't hire a LOT of people, yet the population continues to increase. New solar cell technology, for example, where do you recon those will more likely be manufactured more cheaply, the US or China?

A certain number of NEW jobs need to be created each month/quarter/year to sustain our economy. We are waaaay under those job creation figures and I believe will continue to be so.

Dawn@Lighten Up! said...

I agree with you, although I am now depressed. Especially the bit about the environment. I so enjoy (not) my far-right friends on Facebook who post about NOT recycling and NOT giving a sh*t about the environment. Sigh.

Robert the Skeptic said...

Dawn I have mentioned this before - but when my daughters were young they asked me what the difference was between Republicans and Democrats. My response to them was:

Republicans want America to be a better place for them, their families and friends, and people like them. Democrats want the same thing... but for everyone.

The Conservatives I know are fairly self-serving, self-centered. So things like recycling don't resonate with them because it doesn't benefit them directly, it benefits others and they don't care about others. Pretty simple, actually... and pretty myopic.

Antares Cryptos said...

I agree, the baby boomers experienced a golden age, although I do not think it will be that dire.

Expect the worst, hope for the best.

Antares Cryptos said...

P.S. Did you see this?

Robert the Skeptic said...

Cryptos Dire? Well there certanily will be nothing like the times I grew up and flourished in ever again, of that I have no doubt. But I won't deny you your hope.

I'm going to hyper-link to your Jon Stewart Video. People should see this. Though the Free Marketers and the Privileged Class has always vilified the Great Undeserving. Oddly most of them also believe themselves good Christians as well.

Paul said...

Robert, Christians make a lot of mistakes just like atheists, Muslims, Jews, Hindus and Buddhists. My reason tells me that mistakes are a part of the human condition. As a Christian, I feel that criticism of me is justified if it is true and fair. To be perfectly candid I know some rational people who get off on criticizing Christianity and Christians unfairly when it's uncalled for. They are ones who cannot accept the fact that Jesus' message continues to resonate after 2,000 years despite the mistakes of some of His followers.

Robert the Skeptic said...

Paul We've drifted WAY off topic here. Nowhere in my post was there any mention of religion. Rain commented about Christians who tie belief to wealth. Anonymous felt Christians were being "bashed", I assume from Rain's comment. I responded to Anonymous that Christianity (all religions) are not immune from criticism. I don't see any other commenters discussing religion.

So, to bring the discussion back on-topic, please feel free to comment on the content of my post regarding the economy. I assure you, You will all have an opportunity to carry on a lively discussion about religion in an upcoming post.

Heidrun Khokhar, KleinsteMotte said...

I see that there are not going to be jobs for all the people in the world. What needs to happen is a shift from our current way of thinking about success and how to achieve it. Daily we are given market reports and dollar values and ups and downs that are the benchmark of success. But what if we changed that whole system? Maybe it's time for a revolution in the way we build a world economy? By 2050 75% of all people will live in urban places and need some means to exist. The current ways will not work because all is based on production and selling the goods. Soon we will not need high production because we are over producing. The problem can be solved by a whole new way of organizing how much to produce but it also means there must be a fair distribution of labour to all nations with fair equal compensation. Lifestyle changes are also needed so the the poorest are not left out. The problem is that the few who now control us all won't bend to alter that. Greed is a sad human trait and so far we have not been able to find a way past it. Maybe a gene will be developed that can help but then we enter another issue of who will be able to control the ways of that?? New world yes but brave??

Robert the Skeptic said...

KleinsteMotte There was a "Star-Trek" TNG episode where the crew of the Enterprise revived people from the 21st century who had been frozen cryogenically. One of the "thawed" people remarked about how much his portfolio would have increased over the centuries.

But Capt. Picard admonished him, society by then had moved far beyond having economics and money dictate people's function and passion in life. That is an almost impossible concept in today's society.