Wow. Way to completely write out of the story the PEOPLE who fought tooth-and-nail to get those raises, WaPo....
http://en.wikipedia.org/wiki/Lowell_Mill_Girls
Of course, acknowledging the real struggle might seriously impact the whole "things will get better by themselves, just keep sleeping" argument of the piece...
This article makes much more sense when viewed in the light of Amazon's current PR problems due to their treatment of poorly paid warehouse workers. They are desperately trying to automate as fast as possible, and this piece tries its best to spin it as a win-win for everyone.
http://www.washingtonpost.com/blogs/the-switch/wp/2014/01/16...
Another employer offers Fred $3, and so on, until Fred is making ($10 - opportunitycost).
In other words, Fred being way underpaid according to the value he produces is an unstable situation.
Technology will likely not stabilize.
Would a web designer from 1996 have a job in today's market? In the same vein, it would be like saying the autoloom would still work today, obviously it would, but no one would use it to produce goods to sell commercially.
I just love those articles that state that "we have no problem" because "everything just settles out at the end", while forgetting that one of the mechanisms for everything to settle up is a huge share of the population dying. It's survival bias acting at slaughter time.
Another way to look at it as go visit Fort Williams in New York, they have a display of 18th century clothing. Look how tiny it was. It's a dramatic illustration of how hard life was in pre-industrial America.
Next visit some Civil War museums and look at the uniforms on display. They're about halfway between colonial sizes and modern sizes.
It has, however, stabilized locally for periods of time in one area of industry or another.
And it is likely to do similar things again.
http://www.becker-posner-blog.com/2014/01/secular-stagnation...
> It is difficult to imagine productive activities that cannot be automated—mining, construction, many medical services, house cleaning: the list goes on and on.
> A decline in the demand for labor, caused by automation, will result in lower wages, without necessarily producing an increase in employment (work effort will not grow if there is no work), let alone an increase in national income.
However, as he also states, "with no truck drivers to pay, the cost of truck transportation will fall, and price will follow". In my view, this will further reduce the main necessities of living (food, hygiene products, energy) which will in turn allow people to live with much less money. Therefore, the poverty levels should fall, as well. It is not hard to imagine the government paying enough social welfare so that everyone can afford basic stuff. Actually, government could also just buy enough robots and produce all the necessities itself.
labor currently takes around 65% of gdp[1]. Owners of the automation will take some of that gain ,so at best we'll see 50% reduction in prices.
According to one calculation, a $10K per person over 21 is a possible basic income proposal[2]. So for family , after adding the 50% deflation, each family will receive $40K in today's dollars.
$40K is close to the median family income in 2012($53K). And we still haven't factored non-automation based innovation.
[1]http://en.wikipedia.org/wiki/Wage_share
[2]http://nextbigfuture.com/2013/11/a-basic-income-of-about-100...
For example computers are effectively free now, they are widely available on Craigslist for under $100 and capable smartphones are bundled into most cellular plans. Flat screen TVs, for all their perceived excess, halve in price each year. However houses and cars still cost $100,000 and $10,000, even used. What's beginning to haunt me is that soon there will be no money in so many industries that people think of as lucrative now: computing, transportation, services, etc, yet the things that constitute the core infrastructure of our society only appreciate in value. You'll be able to get what you want, but not what you need.
My prediction for America in 10 or 20 years, assuming there is no intervention soon, is that corporations will replace the state as the primary wealth manager and that nearly the entirety of the population, probably 400 million people by then, will have no wealth to speak of. People will be struggling to find high paying jobs because raises will be a thing of the past once automation progressively lowers costs each year. There will be a profound sense of being "locked in", running a perpetual rat race where work that used to be worth $100 per hour slips to $50, then $25, and so on until even the most trying work is not profitable, and stabilizes on some rate set by fear, perhaps $10 an hour. With everyone making this across industries, we'll have neo-communism. Your boss won't be able to afford a home, and neither will his or her boss. But go high enough up the ladder and houses will be gifted out as perks.
Then there will be some kind of revolution, it's tempting to think we don't know what form it will take, but if it's to be successful it will be a peaceful one. Basically we'll all look around and wonder why we're all working so hard in the most productive economy that's ever existed, and we'll throw out the bosses by deciding not to participate in the activities that they depend on. Suddenly everyone will have a substantial level of public wealth, you'll instantly own the home you're in, and it will be unclear whether you'll still pay a mortgage. The way it works is that the people and policies that help society are carried over post revolution, and the ones that hinder it are cast aside.
I kind of hope I'm wrong about all of this, but I know in my heart I'm not. We're living in the last heyday of the industrial age, "enjoy" it while it lasts. We can even pretend that we don't know what the post-revolution age will look like, but that's not true either. Everyone's standard of living will go up to what it would have been without oppression. Only this time it will feel unthinkable to coerce people into doing work you would disdain to do yourself, so robots will fill that role instead of other ethnicities, genders or foreigners. It may very well be the last revolution before we're a spacefaring society.
In fairness, and because this got so long, I just want to say that this is only one possible future, and that we may very well adopt robots on a personal level like the PC (hydroponic gardens, off-grid homes and cars built of recycled materials, a sharing economy like Airbnb for everything) before then and the next generation may follow a completely different path. I just think this is the most likely forecast, based on the evidence I see around me now.
This seems to be a counterpoint to his thesis: Technology does indeed create unemployment if all demand has already been satisfied.
His point should thus be stated with a caveat: Technology does not destroy jobs as long as demand increases along with the increased supply. In order to know whether robots will steal our jobs, we have to first determine whether human demands are already being met or not, and it seems plausible to me that they nearly are today (though the inverse also seems plausible).
I think a better moral for the story is to expect technology to have significant local effects on employment in particular industries (either up or down), but the evidence for the economy as a whole seems to be much more neutral.
That said, there are some omissions. The American Colonies / Early United States were labor-constrained. The economy was growing rapidly, and there simply weren't enough warm bodies to meet demand (discussed in Smith, Wealth of Nations, Book 1, Chapter VII). Wages were high, supplies of finished goods were limited, and the benefits of industrialization were high. This contrasted with England in which factories drew masses of labor from the countryside, city populations exploded (Liverpool, Manchester, and Birmingham grew from small towns of 4,000 - 6,000 in 1685 to major cities of 393,000 - 552,000 by 1881, see Arnold Toynbee's Lectures on the Industrial Revolution), and working conditions in general were abysmal.
Which suggests other reasons why picking the Lowell factories as the analysis point is somewhat misguided. Toynbee's Lectures paint a markedly different picture of how industrialization proceeded in the UK.
The challenge now is that virtually all basic needs of survival ... and then some ... are satisfied. Does this mean that there's no additional demand or demand growth possible? No. But ... the situation's markedly different from the late 18th century.
Too: the dawn of the Industrial Revolution was a period in which there were vast untapped natural resources -- virgin land (or, if you prefer, newly cleared land by way of the aboriginal genocide and pandemics) in the Americas, forests, untilled prairies, and of course, untold gigatons of coal, oil, and gas in the ground. William Stanley Jevons noted that increased efficiencies tended to increase consumption of resources by increasing their marginal utility (the so-called Jevons Paradox)
We're looking at a constrained resource environment going out, which may well invert the logic of Jevons Paradox and see fewer resources consumed with increasing efficiency. Which would mean that automation would idle, not employ, hands.
There will be industries and jobs enabled by today's technologies, that we can't picture today. My bet is on biotechnology. We know only a very small amount about the systems of life.
We can't pretend that a new tool for humans to use is equivalent to a fully autonomous robot which can think for itself beyond any human capacity. Those two things are fundamentally un-alike.
There's no reason to assume that replacement forms of employment will automatically appear when needed.
Given the right prices, this sort of technology can make sense even if it doesn't actually "save" labor at all -- replacing one efficient skilled person with two inefficient unskilled ones for the same output makes business sense if the skilled labor is more than double the price.
Today's market has a lot of disparity in labor prices like this, especially when you look at it globablly. So it's entirely possible for new tech that doesn't actually save labor in terms of output per worker to find a niche.
At the same time, it's also possible for tech to do the inverse, and replace three expensive unskilled workers with one skilled one who commands double the wage.
So in terms of income inequality, at least, it's not entirely clear where technology will take us.
It's not stealing if I don't want it.
