INNOVATION, the elixir of progress, has always cost people their jobs. In the Industrial Revolution artisan weavers were swept aside by the mechanical loom. Over the past 30 years the digital revolution has displaced many of the mid-skill jobs that underpinned 20th-century middle-class life. Typists, ticket agents, bank tellers and many production-line jobs have been dispensed with, just as the weavers were….
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The article above is an interesting “must read” for anyone with a job. While I agree with the overall premise of the article they have missed a few significant points.
First, as productivity and technology improves over the next decade, what will happen to all of the “white collar jobs” that our economy used to, and to a certain extent, still supports. Will there be another advance, either technological or otherwise, that will eat up excess labor force as it did in the 21st century? That is a difficult question to answer. While I am looking incredibly hard to find some sort of a catalyst, as of right now, I don’t see anything. Maybe it will and maybe it won’t. However, the article is missing a few other points.
Robotics & Outsourcing: Having lived in Asia for a few years, I am here to tell you that outsourcing will take a large bite out of US labor force over the next few decades. Why should I hire an American and pay him at least $15/hour when I can pay a Filipino worker (who is just as good) $2.50/hour. This is basic economics. Plus, robotics are advancing so rapidly now that in many cases the cost of labor is being pushed into the $2/hour territory. I believe you would agree that such a cost will be pushed even lower over the next decade as the cost of technology drops further. Will anyone be able to compete with $0.50/hour robots?
Finally, there is the question of the US Economy. As I have stated repeatedly on this blog, the state of the US Economy is dismal at best. The unemployment rate is being under reported. The recovery we have experienced thus far has been driven by nothing more than speculation and massive credit infusion. When it ends and the bear market starts, the unemployment rate will surge again. Sadly, I do not see any outcome to reverse my position.
I know I have asked more questions than I have answered. Yet, a clear trend is evident. There is a tremendous amount of pressure on the US labor force. All of it is negative and none of it is going away anytime soon. If anything it will intensify over the next two decades.
So, is 30-40% unemployment rate possible? While it seems extreme, I wouldn’t rule it out. Anything is possible. Some sectors of Greek and Spanish economy are already there. One thing is for sure. Make yourself as valuable as possible so your job cannot be axed.
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Is 30-40% Unemployment The Future?