By Walter Sorochan
Posted May 23, 2016; Disclaimer
There is a lot of talk about loss of jobs in United States due to outsourcing manufacturing plants overseas. And conversely, politicians claiming that they will bring back jobs that were previously lost. This article explores both of these issues and searches for the truth. Jobs have become a hot topic.
The Painful Evidence is that Middle Class Jobs Are Disappearing: "The Wall Street Journal, reporting on a Georgetown University study, concludes that "many middle-wage occupations, those with average earnings between $32,000 and $53,000, have collapsed." Collapsed. High-wage occupations in technology, medicine, and finance are booming, and so are low-wage occupations in food service, retail, and personal care. But middle-income positions are fading away. The only one of the eight fastest-growing occupations that pays over $32,000 per year is nursing. Manufacturing, once the backbone of mid-level employment, continued to decline in 2015. The Bureau of Labor Statistics determined that 18 percent of all displaced workers in 2011-13 were in manufacturing." Buchheit: Jobs disappearing 2016 Osborne: Future of Employment
The jobs that kept the middle class out of poverty — education, construction, social services, transportation, administration — have seen a decline since the 2009 recession, especially in the northeast United States. At a national level jobs gained are paying 23 percent less than jobs lost. Federal Reserve Bank
While middle class jobs are disappearing today, the prediction for the near future is that professional jobs will also change or be displaced. Richard Susskind and Daniel Susskind, in their book: The Future of Professions, predict the decline of today’s professions and describes the people and systems that will replace them. In an Internet society, we will neither need nor want doctors, teachers, accountants, architects, the clergy, consultants, lawyers, and many others, to work as they did in the 20th century. Instead, ‘increasingly capable systems’ — from tele-presence to artificial intelligence — will bring fundamental change in the way that the ‘practical expertise’ of specialists will be made available to society in the future. The authors challenge the ‘grand bargain’ — the arrangement that grants various monopolies to today’s professionals. They argue that our current professions, doctors, teachers, accountants, architects, consultants, lawyers and many others are antiquated, opaque and no longer affordable, and that the expertise of their best is enjoyed only by a few. In their place, they propose six new models for producing and distributing expertise in society. Susskind: Future of Professions 2016
Auto makers early in this industry displaced manual labor with robots on the assembly lines. [ The photo on the left depicts robots at an auto assembly line ] Since then, other industries have displaced repetitive manual and even low pay service workers with robots. Skidelsky: Rise of robots 2013 In 2015, food service employee expecting to get a $15 per hour wage, may get a temporary increase in wages only to be displaced by a robot.
Below is an example of jobs being lost to robots:
There are two differences now between the economy and jobs of the past and today: "(1) In the past technology created middle-class jobs, manufacturing jobs, white-collar jobs, HIGHER-PAYING jobs. Now the jobs are at the extremes, either high-level or low-level, with tech-related jobs on the higher end and service-related jobs on the lower end. And (2) Globalization has outsourced middle-income jobs, not only from rich to poor countries, but also from one developing nation to another, as, for example, from China to Vietnam. The World Economic Forum suggests that we're "on the cusp of a Fourth Industrial Revolution" in which "smart systems" in our homes, factories, farms, and entire cities will help get our work done." Buchheit: Jobs disappearing 2016 And many will be working at jobs for five years or less instead of working 20 or more years at a job.
Oxford University researchers Carl Benedikt Frey and Michael A. Osborne in their daunting landmark study forecast what is to come. "They estimate that 47 percent of U.S. jobs are at “high risk” of being taken over by robots in the next decade or two. And we’re not talking about just production and service jobs requiring more low-level skills. Affected jobs include accountants, physicians, lawyers, and architects, loan officers, tax preparers, paralegals, and even roofers are at risk. Even more susceptible are low-skill-level jobs such as retail cashiers and salespeople, telemarketers, toll booth operators, and postal workers. Even professional drivers (truck, bus, taxi) are at risk. Automation in the future will mainly substitute for “low-skill and low-wage” jobs."
Repetitive labor jobs are already here being replaced by robots. The illustration on the right shows a robot carrying food to a person in a Chinese restaurant. Such automation has not yet caught on in United States, but it is only a matter of time.
Restaurant workers at McDonald's are seeking a minimum wage of $15 an hour and increased benefits. Meanwhile, the ex-president and CEO of McDonald’s (MCD) company, Edward Rensi, said on May 26, 2016, that a $15 minimum wage would cost jobs as it would lead to greater automation. Rensi explained: “I was at the National Restaurant Show yesterday, and if you look at the robotic devices that are coming into the restaurant industry — it’s cheaper to buy a $35,000 robotic arm than it is to hire an employee who’s inefficient making $15 an hour bagging french fries — it’s nonsense and it’s very destructive and it’s inflationary and it’s going to cause a job loss across this country like you’re not going to believe.”
Applying this information in 2016 to United States where the official unemployment rate [ click for more information ] is projected closer to ‘full employment’, there are still a host of Americans not working at descent paying jobs — more than one-third of the population, in fact. Although widespread automation is set to wipe out millions of jobs, legislators, business, and political leaders seemingly have zero idea of how to deal with the fallout. Below is a graph on the left projecting jobs [ % ] most likely to be lost in the next 10 to 20 years; while on the right are jobs most likely to survive [%].
What’s most troubling about all these future changes is that advances in technology and computerization have outpaced our ability to find new uses for labor and people. In other words, automation has replaced people at a faster rate than the demand for products and services has grown .... meaning the demand for skills has lagged. Since the number of workers with higher education degrees has exploded, many of these higher-skilled workers are accepting jobs traditionally performed by less educated, low-skilled workers. The minimally-educated, low-skill worker is subsequently pushed further down or out of the workforce entirely. Stebbins: jobs disappearing 2016
By 2018, roughly 78 percent of all available jobs will require education beyond high school. These projections of high, middle and low skill jobs are fairly consistent across all states. Brookings Institute: Fewer jobs 2014
The true unemployment rate, if discouraged and part-time workers are included, is double that of the official rate. It's probably much worse. Alliance for a Just Society estimates that there are 7 job seekers for every $15/hour job opening. Buchheit: Jobs disappearing 2016Work when people are displaced by robots and machines: What will we do 30 or 50 years from now? What will meaningful work be like then? Julian Berkinshaw mentions that "80% of people aren’t actively engaged with the work they do." That is, the work they do is meaningless to them! This threat is unspoken and it affects today's uncertainty that workers have.
That the work place will change and that work will be organized in a different manner [ collaborative manner ]
A brief review of the articles on the subject on the internet failed to find any real serious discussion on these issues; except the article on the right that Sweden appointed a Minister of Future to explore the future of jobs and work. Most articles address the nature of work and how businesses will change work. But no one in United States is addressing how unemployment and lack of real work will affect the mind-set of people without meaningful and purposeful work. That is, billions of people who may be out of work. How can our economy provide meaningful work on a long-term basis? What will we do with billions of unemployed in the world?
So, the future looks dim .... continuing, massive world-wide unemployment. Rosenberg Not enough jobs 2015 And no solution as to how the unemployed will be able to take care of themselves in the future. No one, as yet, has come up with a plan of what to do with billions of people who will have no jobs! Unemployed do not pay taxes that is a source of revenue for the government. Political candidates and governments are ignoring this reality and instead, misleading people with promises to bring back millions of jobs. This is a future world problem of greater importance than climate change!
But "man does not live by bread alone!" Humans need meaningful work. Meaningful not to make money, but to have food, shelter to survive, feeling a sense of worth and accomplishment, dignity and self-respect, and perhaps help make others better. Technology and robots may not always be a very good solution as a replacement for human work. And this is a moral issue that eventually must be addressed by everyone.
We all need to prepare for the uncertain days ahead. Start living by assuming responsibility for yourself and not expecting Uncle Sam to take care of you. You cannot continue to bury your head in the sand and just go to a football or baseball game and drink some beer and expect that somehow the magic genie will pop out of the bottle and solve your future unemployment problem. Ask yourself: What can I do if I do not have a job?
You can do something whether you do or do not have a job: There are dozens of options to consider, and you don’t have to pick just one. For example: Rosenberg: Fixing your job skills 2014 [List incomplete]
You can start by doing research as needed; gathering information takes time but it can be done. The real magic lies in the next step: Breaking your 'living in a dream' meager dependent on others existence and acting.
Nothing changes until you act. Everyone is uncertain, and everyone is scared, but only those who climb into the lifeboats will make it safely away from danger. Mere thinking, arguing and making excuses will solve nothing. You have to act.
Blatant lies and deception by politicians: Politicians and presidential candidates are making wild, unqualified claims that they will bring lost jobs back home from overseas. But these jobs are lost. And even if these jobs were brought back these would probably be replaced by robots or much lesser pay. The information above supports these observations.
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Admin, "Jobs Disappearing at Accelerating Rate – Is Yours at Risk?" Current. Aug 10, 2014. Admin: Fewer jobs 2014
Anelauskas Valdas, "The Sinking of American Labor 1990's," Adapted from Textbook: DISCOVERING AMERICA AS IT IS, Chapter 9 Anelauskas: Am labor 1990s
Buchheit Paul, "Our Jobs Are Disappearing," Common Dreams, February 01, 2016. Buchheit: Jobs disappearing 2016
Casey Doug, "The US Government Is Bankrupt," Casey Research, January 13, 2012 Casey: US bankrupt 2012
Harari Yuval Noah, "AI will create 'useless class' of human, predicts bestselling historian," The Guardian, May 20, 2016. Harari: Useless humans 2016
Mucci Alberto, "Sweden's Minister of the Future Explains How to Make Politicians Think Long-Term," Motherboard, November 26, 2015. Mucci: Sweden's Minister of Future 2015
Noblitt Julie, "Tim O’Reilly and the WTF Economy: A Conversation About Tech and the Future of Business," Society of Consumer Affairs Professionals [in Business] or SOCAP, October 14th, 2015. Noblitt: Future of business 2015
Osborne Michael A. and Carl Benedikt Frey, "The future of Employment," University of Oxford. Osborne: Future of Employment
Powell Bob, “Unemployment: Official, Effective, Real,” September 12, 2006. Powell unemployment 2006 There are different estimates of the number of unemployed and the unemployment rate (in percent). This paper explains the differences and adds other categories that might well be described as unemployed.
Rosenberg Paul, "The American Productive Class Is Withering Away: What Is to Be Done?" Casey Research, October 10, 2014. Rosenberg: Fixing your job skills 2014
Rosenberg Paul, " There will never be enough good jobs again," Free-Man's Perspective, June 17, 2015. Rosenberg Not enough jobs 2015
Skidelsky Robert, The Rise of the Robots," The center for Global Studies, Febtuary 22, 2013. Skidelsky: Rise of robots 2013
Stebbins Samuel and Michael B. Sauter, "Will your job disappear?" USA Today, March 6, 2016 Stebbins: jobs disappearing 2016
Strawson Galen, "Sapiens: A Brief History of Humankind by Yuval Noah Harari – review," The Guardian, September 11, 2014 Strawson: History mankind 2014
Susskind Richard and Daniel Susskind, The Future of the Professions: How Technology Will Transform the Work of Human Experts, Text, April 25, 2016. Susskind: Future of Professions 2016
Unemployment rate: The government wants to put a good face on the economy via employment and this is done by using a U-3 formula to give the lowest unemployment number. The high number of unemployed uses U-6 formula. So who is lying and who is telling the truth if there is one?
Bob Powell, explains the different estimates of the number of unemployed and the unemployment rate (in percent). The official definitions in brief:
Even the Department of Labor's expanded unemployment measure doesn't fully capture how difficult the job market is for American workers. It doesn't include self-employed workers whose incomes have shriveled. It doesn't look at former full-time staff employees who have accepted short-term contracts, without benefits, and at a fraction of their former salaries. And it doesn't count the many would-be workers who are going back to school, taking on more debt, in hopes that an advanced degree will improve their chances of landing a job.
Millions of people have given up on finding work and others forced into working fewer hours than they'd like. The statistics above hardly tell the real story of unemployed Americans.
So .... what is the official unemployment rate? A quick refresher on how the unemployment rate works: The government only counts people as “unemployed” if they are actively looking for work. Everyone else who isn’t working is considered out of the labor force entirely. According to the federal government way of counting heads, approximately April 2016, the unemployment rate held at 5.0 percent; this rate fluctuates annually somewhere around 5 to 7%. But if you count those who have been laid off and are unable to get a good paying job, it is somewhere around 20 to 30%. This figure can vary with different age groups, such as black youth unemployment rate being about 50%.
Many semi-skilled workers have lost their jobs on the one hand while many new skilled university graduates are finding it difficult to find employment in their field. Both are considered unemployed [ jobless ]. No one knows the exact number of unemployed. A quick refresher on how the unemployment rate works: The government only counts people as “unemployed” if they are actively looking for work. Everyone else who isn’t working is considered out of the labor force entirely. The federal government estimate of the unemployed includes only those who are getting unemployment benefits for six months. Once the unemployment benefits stop, these persons are then re-classified as no longer unemployed. So, if a worker who was earning $30 per hour in a factory gets laid off, he becomes unemployed until he gets a job at McDonalds earning $ 12.00 an hour. Then he is classified as employed even though he does not earn enough money to live on!