Little Raven
On Walkabout
Recently, when talking to one of my friends, he brought up his belief that America was on the cusp of the "post-employment economy." I was unfamiliar with this particular turn of phrase, and asked him to elaborate. He then defined it this way: the American economy enters a stage at which it can no longer create jobs fast enough to support our traditional ideas about employment. It’s not simply a matter of unemployment being uncomfortably high for a while. It’s a stage at which we as a society are forced to change how we approach work, and the lack thereof, because our old ideas are simply no longer viable.
So, are we there yet? We’re certainly in the middle of a bad recession, but that by itself does not constituent post-employment. 10% unemployment is painful, sure, but as long as it’s a short-term condition that will disappear with the inevitable economic recovery, then we’ll be fine.
We might not be fine.
And things are about to get worse. Public employment is getting ready to take a huge hit, as local and state government attempt to stem the tide of red ink that is drowning them. Cities and states will almost certainly have to shed hundreds of thousands of jobs over the next year or two, since unlike the Feds, they can't print money. Public employment as a percentage of the total workforce has grown considerably over the last 30 years, but that's about to change in a big way.
But it's not all bad. GDP is growing. We're producing more than we ever have before, and we're doing it with fewer and fewer people. We outsource more, we automate more, and we just plain get more work out of the people that are employed. If you just look at the total, our economy is doing fine...unlike the Great Depression, where GDP tanked. Those who are working are, in general, doing ok, and some are doing very, very well for themselves indeed. If you're among the elite with proper skills and talents and the network to support them, now is probably a better time to be working than ever before...everyone loves a superstar. If you aren't, well, we just don't need as many people as we used to. And odds are, we'll need even fewer people in the future.
Maybe that will change as the recovery really gathers steam. But maybe it won't. In the traditional labor pyramid, you have lots and lots of relatively unskilled workers supporting the less numerous skilled workers higher up, and finally the few CEOs and other captains at the very top. We still have that basic structure, but automation and outsourcing have been steadily grinding away at the bottom layers for decades, and the loss rate only seems to be increasing. The traditional answer for this has been that we'll retrain everyone to put them into the top part of the pyramid, and in theory that's fine, but it hasn't really worked out in practice. People can be retrained, to an extent, but it's a relatively slow and expensive process, and we never seem to know exactly what we should be training them for. And at a 0.9% rate of job creation, it's largely moot. There's no point in retraining someone if there won't be a job waiting for them.
Right now, we're busy telling ourselves that this is just a particularly nasty recession and everything will be fine once the recovery really picks up. In the meantime, we extend unemployment over and over and over again. And Senator Bunnings latest stunt notwithstanding, we'll no doubt renew it again this week. But how long can we keep doing that? How long should we keep doing that?
So, is America staring a new era in the face? And if so.....what do we do about it?
So, are we there yet? We’re certainly in the middle of a bad recession, but that by itself does not constituent post-employment. 10% unemployment is painful, sure, but as long as it’s a short-term condition that will disappear with the inevitable economic recovery, then we’ll be fine.
We might not be fine.
We need to produce over 100,000 jobs a month just to keep up with population growth. And we're currently sitting in a jobs hole that is over 8 million jobs deep. To get back to 5% unemployment at 0.9% growth will take decades...assuming, of course, that there are no further hiccups.
And things are about to get worse. Public employment is getting ready to take a huge hit, as local and state government attempt to stem the tide of red ink that is drowning them. Cities and states will almost certainly have to shed hundreds of thousands of jobs over the next year or two, since unlike the Feds, they can't print money. Public employment as a percentage of the total workforce has grown considerably over the last 30 years, but that's about to change in a big way.
But it's not all bad. GDP is growing. We're producing more than we ever have before, and we're doing it with fewer and fewer people. We outsource more, we automate more, and we just plain get more work out of the people that are employed. If you just look at the total, our economy is doing fine...unlike the Great Depression, where GDP tanked. Those who are working are, in general, doing ok, and some are doing very, very well for themselves indeed. If you're among the elite with proper skills and talents and the network to support them, now is probably a better time to be working than ever before...everyone loves a superstar. If you aren't, well, we just don't need as many people as we used to. And odds are, we'll need even fewer people in the future.
Maybe that will change as the recovery really gathers steam. But maybe it won't. In the traditional labor pyramid, you have lots and lots of relatively unskilled workers supporting the less numerous skilled workers higher up, and finally the few CEOs and other captains at the very top. We still have that basic structure, but automation and outsourcing have been steadily grinding away at the bottom layers for decades, and the loss rate only seems to be increasing. The traditional answer for this has been that we'll retrain everyone to put them into the top part of the pyramid, and in theory that's fine, but it hasn't really worked out in practice. People can be retrained, to an extent, but it's a relatively slow and expensive process, and we never seem to know exactly what we should be training them for. And at a 0.9% rate of job creation, it's largely moot. There's no point in retraining someone if there won't be a job waiting for them.
Right now, we're busy telling ourselves that this is just a particularly nasty recession and everything will be fine once the recovery really picks up. In the meantime, we extend unemployment over and over and over again. And Senator Bunnings latest stunt notwithstanding, we'll no doubt renew it again this week. But how long can we keep doing that? How long should we keep doing that?
So, is America staring a new era in the face? And if so.....what do we do about it?
