Sunday, June 3, 2012

Permanent Unemployment?

As technology advances, more and more jobs are deemed obsolete.   That may be one factor behind the nagging unemployment rates of today.

Back in 1978, when I worked for General Motors, the assembly line was a place that was run by people.   Early experiments in robotics were just being tried out, and the Union was none too happy about it.

But improvements in technology can't be thwarted, just to suit the buggy-whip makers, and today, an auto assembly plant uses less than half the manual labor it once did.   Particularly noxious jobs, like spray-painting cars, are done by robots.   And critical work - such as body welding - where the room for error is zero, also use robots.  Yes, men (and women) still wrestle together sub-assemblies and install some parts.  But increasingly, robotics is supplanting human labor in many endeavors.

But the effect is not limited to blue-collar workers.   White-collar workers have been obsoleted at the same time.  In an era before computers, armies of low-level clerks kept ledgers and books.   Armies of secretaries typed letters.   And mail room clerks sorted papers and delivered them to offices throughout a company building.

With the advent of early computers, clerks were replaced with punch-card operators - a new job, but fewer required, and with different skills.  Today, no one keeps ledgers like that, and few people have the math skills to even take on such a low-level job as clerk.   Punch-card operators were replaced with data entry clerks, who were replaced with... nothing.  Even data entry is automated with scanners and bar codes.  And the skill level of the average worker is lower than ever.

But this is not a bad thing.  Computers are often better than people, at doing clerical and accounting work.  And today, you can go online and manage your money, without having to wait for the bank to open at 9:00 AM.  And increasingly, banks are pushing us into this mode of operation.  The cost of tellers is simply too high.

On the management side, shrinkage occurred too, as the number of white-collar workers dropped.  During the recent downturn in the U.S. Auto industry, it was said the problems at Ford,Chrysler, and GM were due to the Unions alone.  However, all three companies were bloated with white collar workers - more than necessary for companies with shrinking market shares and brands being spun-off.

I wrote before how, at GM, even back in 1979, many salary employees were working at little more than sinecures - jobs with no purpose or meaning, other than to provided a paycheck.   This was not a sustainable business model.

So what happens to the buggy-whip makers, the key punch operators, and the men with shovels?  Some on the Left would argue that we should denounce automation to provide everyone with jobs.   Others, on the Right would argue that the increase in productivity will mean more wealth for all - and that  new jobs will be created to replace old ones.

And to some extent, this latter argument is true.   Even with an increasing population and increasing automation, a surprising number of people are still employed.   Granted, lately it seems that more and more of these jobs are in the low-paying service sector.  As a result, more and more people have gravitated toward the professions - overflowing these fields to the point that prices are finally coming down.  Mega-Law-Firms who bill $1000 an hour are finding that clients are migrating to cheaper firms that charge less than half as much - and that in litigation, the fellow who bleeds to death more slowly, wins.

But what will happen in this economy?   Will we need Office Managers and HR people to manage non-existent office workers?  Probably not.   And a lot of people who had high-paying jobs that really required little more than management skills, may find themselves out of a job - for good.

In each wave of technological advancement, there are always going to be a group of people near, but not at, retirement age, who will find their job skills obsoleted, and yet they are not quite ready to retire.   And as technology increases its pace, these cycles will become shorter and shorter in time.   While it may be typical to be laid off at age 55 today, perhaps in a decade, the age will be 45, or less.

It took a long time to go from horse-and-buggy to the primitive assembly line producing cars.  But even less time for these assembly lines to be automated.  And while the adding machine and ledger ruled the business world for 100 years, the IBM mainframe took over for another 50.  The PC, now 25.   Whatever is next, it will cycle even more quickly.

In theory, again, this should be a good thing for Humanity in general, as it should increase overall wealth, and allow us to work less and get paid more, as machines do our work for us.   And to some extent, this is true.   The average middle-class American today has much more, in terms of tangible wealth and standard of living, than 50 years ago.   In my lifetime alone, we have gone from a nation where the number one health problem among the very poor has gone from malnutrition to obesity.

It is just today we feel put-upon more than in the past.   Jobs are not stable, they do not pay well, and benefits are non-existent.   The world is in flux, and this is not comforting.   30 years in the coal mine and a gold watch just isn't in the cards.   But then again, who wants to work 30 years in a coal mine?  I surely don't.  Give me one of these clean, neat, new technology jobs, anytime.

So what does this all mean to you?   Well, you should expect to be laid off in your 50's, if not before.  If your job skills become obsolete, your pay too high, and your benefits onerous to your company, they will look for ways to "downsize" you.   And you can put on a funny costume and protest at a tea party (against immigrants) or at an "OWS" orgy (against Wall Street) but nothing will come of that.  The government can't mandate that obsolete jobs be created.

You can try to retrain yourself for a new job, but this is, of course, very hard to do as you get older.   Or, perhaps, if you saw this all coming - and you should, as I just told you it is going to happen - you might think about putting your financial house in order from the get-go, so that disruptions to your career are not something that come to you out of the blue, leaving you unemployed and sucking air trying to pay off a monstrous mortgage and other debts.

Again, it comes down to the individual, not the State.   Advances in technology are pretty much a given - you can't legislate away automation or the Internet.  And both are changing how we work and what types of work we do - for the better.   But these changes mean that more responsibilities are placed on your shoulders - responsibilities to make wise choices.