Jobless recoveries and productivity

We who are alive today are not likely to see another productivity explosion to match the 1990s, driven primarily by the initial wave of computerization of most business information activities. (Okay, never say never... maybe if we get cold-fusion or room-temperature super conductors, but it would have to be something stunning.)

But though the stock market loves productivity (which increases profits) the formula for productivity is not necessarily worker-friendly.

How much stuff you can get done per worker-hour = productivity. (Other things being equal, the less labor the more productivity. If you can find a way to make the same stuff with fewer workers then firing people increases your productivity. And, of course, if you can find a way to make more stuff with the same workers that increases productivity.)

Ideally business would like to have no workers at all. If you can find a way to generate profits with fewer of them you will be on the cover of Business Week with a halo.

It is estimated that 10% of all American productivity gains during the Clinton presidency occurred within the Walmart corporation. How scary is that?

If you follow the stock market you know that one thing that almost always makes a stock price go up is an announcement that the company fired a bunch of people.

I am all for technology and efficiency and even for globalization, but for three decades the American worker has faced a perfect storm of Reaganite policy and advancing tech-driven productivity. And our bizarre employer-based health insurance system is another profound incentive to automate.



Deep thought for the day:

The economy does not create jobs except as a last resort. Ford exists to make cars, not to create jobs. McDonalds exists to serve burgers, not to create jobs.

It is necessary for any company to exist in a society of employed people so they have money to consume the company's products. But that big-picture reality is a "tragedy of the commons" because each individual company would be delighted to eliminate their employees.

(The tragedy of the commons, also called the tragedy of the greens, is an Adam Smith thing about how any public area where animals can graze will be over-graved to the point where the grass dies and nobody can graze their animals there anymore. But it is rational for each individual farmer to abuse the common land because if he doesn't somebody else will.)

The economy sheds and creates jobs as matter of routine. In fact, the economy has to create a set number of jobs to keep pace with population growth.

The economy creates jobs because human beings are needed to perform certain profit-creating tasks.

Any corporation that could buy monkeys to do the same work would. Fortunately for us monkeys, and even computers, cannot do everything people can do.

But no corporation has job creation as a goal. Hiring someone is, from the perspective of any individual business, a necessary evil.

"But no corporation has job creation as a goal."

Do you realize that in many instances business lending is largely driven by job creation?

to provide places for people to work.

Goldman Sachs doesn't give a shit if someone they lend money to provides jobs. The only thing Goldman Sachs cares about is the interest and principle payment.

There are different groups that do lending. I can substitute Goldman for Citi Group, Bank of America, or my local credit union.

The government or a non-profit is the only entites that when it lends money there is any type of social purpose tied to it.

What are you trying to prove: that these banks actively engage in lending related to business startups and operations? Really?

Are you familiary with the SBA?

:rofl:

http://www.sba.gov/

You just proved my point.

"The Small Business Administration (SBA) is a United States government agency that provides support to small businesses."

You know nothing about finance, economics, or business or how the government regulates or interacts with them.

and you provided me a link showing me that the SBA was a government entity.

:rofl:

You have to convince people they have to purchase that crap to keep up with the Joneses, thus necessitating working more hours or being more "productive" so you can pay for that unnecessary crap. It's bullshit. I bet we could produce the food, shelter, and clothing that everyone on earth needs to have a reasonably comfortable life with everyone who is capable of working putting in 20 hours a week.

I posted this article here recently and I'll do it again here: http://www.orionmagazine.org/index.php/articles/article/2962/ It's about how consumerism was largely manufactured by corporate titans and how efforts to create more jobs and increase leisure time were thwarted. It's long but worth it.

And it's long past time that certain jobs were mechanized. I find it hard to believe that we can make robots that perform the most complex tasks imaginable but can't come up with one that picks lettuce. But why bother with that innovation when there are desperate people who will pick the lettuce 12 hours a day in the hot sun for $5 an hour and the hovel you provide them to live in?

How scary are remote controlled robots? Check out the movie "Sleep Dealer".

People who demand a right to be paid for doing something slower, and less accurately, than a machine can have had it worse.

As far as a business "without workers", no business could exist like that, businesses need people to find efficiencies and remove excess workers (ironically enough). What they *don't* need are "workers" who define themselves by a lack of innovation, efficiency, improvement... the clock punchers, those who don't bring any value to the business other than being a machine made of meat.

Seeing working-class stiffs as mere cogs in the machine instead of individuals that are ends unto themselves, with a RIGHT to a decent standard of living.

Well, maybe farmers. :P

People certainly have an implied right to be compensated fairly, but I don't buy into the argument that education, intellect, and ideas are useless, because all labor is somehow equal, that skill and quality are irrelevant, and that a genius wrench turner is the same as a wrench turner who slows the line down. Very same thing is true of all other machines.

If only the Abacus union had gotten strong enough, we wouldn't have displaced all those people with calculators and computers?

In an ideal society increased productivity would lead to everyone having to work less. But the way our economy works instead leads to less people doing the same amount of work. This has been counterbalanced by encouraging people via advertising to buy more and more stuff to keep people employed. This situation is not sustainable nor stable as technology continues to advance exponentially.

"In an ideal society increased productivity would lead to everyone having to work less."

Totally agreed. To match my grandfather's standard of living when he was my age (37), I only have to work 4 hours a week. He walked to work, only had one phone at work, one phone in the house, and bought clothes maybe once every few years, got a television once he was 30... he's on his 4th television now.

"This has been counterbalanced by encouraging people via advertising to buy more and more stuff to keep people employed."

There's a whole sub-culture of people choosing to opt-out of such a lifestyle. They work less, buy less, spend less, and live pretty happy lives.

"This situation is not sustainable nor stable as technology continues to advance exponentially."

Moore's law marches on, some folks try to reap the benefits by living as multi-millionares could live 70 years ago (and working that much more), others reap the benefits by living simple lives, working much, much less.

the fact still remains that once growth appears on the horizon, business owners know that the best way to make money is to position themselves to be better equipped to take new market share when it appears.

Its kind of like the overtime scenario. An office with 10 employees each making $20 an hour can run at any level of productivity but at some point, the work will start to pile up whether that be from exhaustion or from to much work. The company can stand to have up to 30 hours of overtime per week until people stop taking that overtime or until the work goes past that point. Once that happens, hiring makes sense.

"productivity" is why we are the number one manufacturer in the world. We produce more stuff with less people than any country in the world. that's why we are so modern. That's why we have so much wealth.

If your ignore both sides of the productivity model, you would naturally become anti automation, anti mechanization. If you really sit down and think about that you will figure out that no 3rd world country in the world is better off than we are because they fended of the threat of productivity.

FDR was an "Old Democrat", unlike the "New Democrats" (DLC/Centrists/Half-Republicans) that currently run our Party.