The future of work
People who celebrate the monthly jobs report getting better nowadays often forget to mention a few facts:
- the new jobs are often temporary or part-time, with low wages
- the old lost jobs, which we lose each month, were often full-time with higher wages
I could go on, and I have, and mention the usual complaints about the definition of the unemployment rate. But instead I’ll take a turn into a thought experiment I’ve been having lately.
Namely, what is the future of work?
It’s important to realize that in some sense we’ve been here before. When all the farming equipment got super efficient and we lost agricultural jobs by the thousands, people swarmed to the cities and we started building things with manufacturing. So if before we had “the age of the farm,” we then entered into “the age of stuff.” And I don’t know about you but I have LOTS of stuff.
Now that all the robots have been trained and are being trained to build our stuff for us, what’s next? What age are we entering?
I kind of want to complain at this point that economists are kind of useless when it comes to questions like this. I mean, aren’t they in charge of understanding the economy? Shouldn’t they have the answer here? I don’t think they have explained it if they do.
Instead, I’m pretty much left considering various science fiction plots I’ve heard about and read about over the years. And my conclusion is that we’re entering “the age of service.”
The age of service is a kind of pyramid scheme where rich people employ individuals to service them in various ways, and then those people are paid well so they can hire slightly less rich people to service them, and so on. But of course for this particular pyramid to work out, the rich have to be SUPER rich and they have to pay their servants very well indeed for the trickle down to work out. Either that or there has to be a wealth transfer some other way.
So, as with all theories of the future, we can talk about how this is already happening.
I noticed this recent Bloomberg View article about how rich people don’t have normal doctors like you and me. They just pay out of pocket for super expensive service outside the realm of insurance. This is not new but it’s expanding.
Here’s another example of the future of jobs, which I should applaud because at least someone has a job but instead just kind of annoys me. Namely, the increasing frequency where I try to make a coffee date with someone (outside of professional meetings) and I have to arrange it with their personal assistant. I feel like, when it comes to social meetings, if you have time to be social, you have time to arrange your social calendar. But again, it’s the future of work here and I guess it’s all good.
More generally: there will be lots of jobs helping out old people and sick people. I get that, especially as the demographics tilt towards old people. But the mathematician in me can’t help but wonder, who will take care of the old people who used to be taking care of the old people? I mean, they by definition don’t have lots of extra cash floating around because they were at the bottom of the pyramid as younger workers.
Or do we have a system where people actually change jobs and levels as they age? That’s another model, where oldish people take care of truly old people and then at some point they get taken care of.
Of course, much like the Star Trek world, none of this has strong connection to the economy as it is set up now, so it’s hard to imagine a smooth transition to a reasonable system, and I’m not even claiming my ideas are reasonable.
By the way, by my definition most people who write computer programs – especially if they’re writing video games or some such – are in a service industry as well. Pretty much anyone who isn’t farming or building stuff in manufacturing is working in service. Writers, poets, singers, and teachers included. Hell, the future could be pretty awesome if we arrange things well.
Anyhoo, a whimsical post for Thursday, and if you have other ideas for the future of work and how that will work out economically, please comment.
mathbabe 
Cathy, I think we will eventually become pets, not smart enough for jobs – so the future of work is not ours. Or maybe we become integrated. Resistance is futile.
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Whatever the future of work, it has to take into account the growing level of income inequality, the rise of automation, and a third thing: the rise of the elderly population! The first two seem to be related, since lower-class workers keep being pushed out of jobs that get automated into jobs that are generally lower paying, at least in the short term. But the third is also related:
http://www.economist.com/news/leaders/21601253-ageing-economy-will-be-slower-and-more-unequal-oneunless-policy-starts-changing-now
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My parents took a cruse on the Yangtze River a few years ago. They saw a cargo ship being unloaded by dozens of men, box by box, by hand. My dad asked someone why they didn’t use a crane. The answer was simple: if they used a crane, what would these men do for work?
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“I try to make a coffee date with someone (outside of professional meetings) and I have to arrange it with their personal assistant”
I wouldn’t do this – I would go out with someone else who considered me important enough to talk to.
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Since you mentioned doctors, the concept of doctors exclusively for the 1% does not really work. The problem is that doctors need to see lots of patients in order to get good, especially when it comes to treating rare disorders. School does not provide nearly enough training for a doctor to reach the top. Personal physicians for the 1% end up like Micheal Jackson’s doctor.
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In the book Social Credit published in 1924 C.H. Douglas predicted that in 100 years all the goods needed by mankind would be produced by 2% of the population. His question was how do the other 98% survive and his solution was Social Credit. We as a society really need to take another long hard look at that idea.
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I also tend to think that we’re headed for a service/circus economy, where you either make your peanuts through performing tasks for the relatively well-off, or by selling entertainment cheaply to the masses of unemployed who, if nothing else, at least have plenty of “leisure time” to spend.
Of course, we have to take into account the likely decrease in dense fuel availability that we’re looking at in the near future. Conventional oil production peaked in ’04, tight oil will peak by 2020, and after that it will become harder to just maintain the infrastructure we have, much less improve it. Same goes for all those robots making all that crap..er..stuff. Check out the Archdruid Report for the details, John Michael Greer seems to have a pretty realistic take, and certainly a perspective that we should be taking into account when considering the future prospects of our society.
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The demands of well paying work already require IQs > 1σ above the mean – which translates to < 15% of the general population. For the rest it will be a mob-mollifying iteration of Bread & Circuses built on three legs – Guaranteed Universal Income, legalized recreational marijuana, and free, immersive, online digital entertainment. Enjoy! There has never been a better time in history to be poor. 🙂
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Sorry, I made it sound like you hadn’t already mentioned the rise of the elderly population. But that Economist article is still interesting.
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I think you are right to raise the big issue about the future of work and I like your generally optimistic tone. An interesting book on this topic is “The Second Machine Age” by Brynjolfsson and McAfee.It looks at the exponential pace of change in information and communication technology suggesting that this is now set to produce truly dramatic changes in the development of robotics with potentially dramatic impacts on patterns of employment. They analyse the issue with the concepts of “bounty” and “spread”. Bounty is all the “stuff” that will be produced with less and less effort or more worryingly labour. The question then becomes how is the bounty spread amongst the population. Current trends suggest this is a process of concentration where more and more bounty goes to a smaller and smaller proportion of the population. Despite recognising these trends Brynjolfsson and McAfee remain optimistic and provide a series of policy and long term recommendations. Whilst I share their optimistic disposition I am not as optimistic about the transition to the next age which I suspect might be quite painful. I really recommend the book wholeheartedly though.
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This aspect of how technology will change employment rarely comes up in mass media, but when it does the response seems to be that the “market” will find a way. The pundits will point out how people flocked into the cities/factories, telephone and elevator operators found other gainful employment, etc. What they never acknowledge is that their examples are from only a 100-200 year period and even if we limit ourselves to recorded human history that is a relatively brief period. The pundits seem to think that the bubble that we have lived in for the past few generations is a natural state of being.
Now you suggest a service economy, but I would suggest an entertainment (in the broadest sense) economy. Whether it is handmade artwork, live concerts, pedicures, etc., that is the only way that I have come up with to soak up the “excess” labor that increasing automation would seem to create. Unfortunately, I don’t think that will actually work either.
On the plus side though, this would be at least vaguely compatible with our current capitalist economy and we might be able to slide into it without major political upheaval.
Addressing the problem directly by direct transfer of good from the owners of capital to the masses would theoretically work, but I don’t see it as being politically viable.
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“…they have to pay their servants very well indeed for the trickle down to work out. Either that or there has to be a wealth transfer some other way.”
I’m waiting for the part where you talk about how this part is (or isn’t, as the case may be) happening.
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“The age of service is a kind of pyramid scheme where rich people employ individuals to service them in various ways…”
We had this before. It was called the Manorialism/Villa System. Most people didn’t like it. The people at the top didn’t like it because they had to share to more of their wealth then they wanted and the people at the bottom didn’t like it because the majority of their productivity was siphoned off by the people above them in the pyramid.
US GDP is $1.9E13 for reference.
If we made the US a pyramid system with 1 person at the top and a households earning 45k at the bottom and each house hold in between supporting 10 other households you end up with $4.5E40 which seems like a lot.
Lets say its 100 people at the top and each household other then those at the bottom supporting 100 other households. Thats only 4 levels of society. The total yearly income for everyone is $2.5E24.
This is with the households at the top earning exactly the amount they need to pay the households below them.
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I don’t follow your math. With a branching factor of 10, I get 4.5E12 needed for the 100 million households at the bottom of the pyramid. Since each level gives everything it receives from above to the level below, I’m calculating GDP by simply multiplying that number by the number of levels (8 by my calculation). That gives me 3.6E13 for GDP. Well above our current GDP, but nothing like your numbers. If I switch to a branching factor of 100, I end up needing only 4 levels and end up at current GDP.
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I basically agree with the general scheme of your vision. The upper levels of society will always organize themselves around “seeing ’em jump” since, as Tom Wolfe pointed out, that is the ultimate goal of privilege. I suppose technology allows for more layers of unproductive labor for jumping, but it seems unlikely that jumping robots will catch on soon.
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http://gender.stanford.edu/four-big-ideas-future-work
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The situation in Europe:
http://www.nakedcapitalism.com/2014/07/technology-displacing-jobs-european-case.html
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Speaking of economists and their lack of solutions…. Well some have ideas about how to deal with the coming jobless economy and none more so that Guy Standing, a British economist who spent 30 years working with the ILO (Int’l Labor Org) which is a UN affiliated agency. He left critical of their lack of response to the issued raised in this posting. To learn more about him and his ideas see here -> http://righttobelazy.com/blog/2014/07/%E2%80%9Cthe-proletariat-is-dead-long-live-the-precariat%E2%80%9D-2/
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piketty has a lot to say on this subj & has been very prominent. yes agreed with earlier comment that wealth inequality is a key way to understand the current & future. currently there seems to be very little political will to confront political inequality possibly due largely to “policy/politics capture” by the wealthy. the future is increasingly grim unless this fundamental structural issue is confronted. technology has exacerbated wealth inequality. the framing of “bounty” vs “spread” is a useful thought/paradigm. its interesting how Marxian thought is quite preoccupied with it.
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