On Wed, Jul 28, 2010 at 6:31 AM, Keith Hudson
<[email protected]> wrote:
> At 06:14 28/07/2010 -0700, Sandwichman wrote:
>
> *So which will it be, cake or death?
>
> So Keith will have the death. Anyone for cake?
>
> Not death, but certainly near-death (deflationary recession) for quite a
> long time while: (a) China and some others catch up with the West in so far
> as they are able to -- given declining, more expensive, energy
supplies: (b)
> a new economy based on a new scalable energy technology emerges.
>
> Keith
>
>
>
> On Tue, Jul 27, 2010 at 11:46 PM, Keith Hudson
> <[email protected]> wrote:
>> At 18:41 27/07/2010 -0700, Sandwichman wrote:
>>
>> July 27, 2010
>> Shouldn't High Unemployment = Less Work To Do?
>>
>> -- by Dave Johnson
>>
>> Superb diagnosis but poor with its three main suggestions. See below:
>>
>> This post originally appeared at Campaign for America's Future (CAF)
>> at their Blog for OurFuture. I am a Fellow with CAF.
>>
>> Simple question: have we reached a point where machines and computers
>> leave us with less work to do? If so it can mean a lot of people are
>> left without jobs and incomes, losing their homes and health, while
>> the rest have our wages dragged ever downward. Or we can make some
>> changes in who gets what for what, and every one of us ends up better
>> off.
>>
>> Cake or death? Which will it be? (*explained below)
>>
>> Somewhere around one in five of us is un- or under-employed while at
>> the same time so many of the rest of us, still employed are stressed,
>> tired, doing the work of those laid off. With too few employed many
>> stores, restaurants, hotels and many other businesses are falling
>> behind. As Bob Herbert puts it today, "Simply stated, more and more
>> families are facing utter economic devastation: completely out of
>> money, with their jobs, savings and retirement funds gone, and nowhere
>> to turn for the next dollar." The government has stepped in with
>> stimulus to pick up some of the slack in demand but that can't go on
>> forever and we need to find long-term solutions.
>>
>> Is it structural?
>>
>> There are signs that the jobs crisis may now be structural, or built
>> into the system. This means that the usual solutions are not going to
>> "restart the engine" and trigger a return to an economy that had where
>> almost everyone can find a job, (even if it is a menial, boring
>> time-suck).
>>
>> Our unemployment emergency may really be about less work to do. Hale
>> "Bonddad" Stewart writing at 538.com, Labor Force Realignment and
>> Jobless Recoveries concludes, (click through for gazillions of charts
>> and full explanation)
>>
>> The "jobless recovery" is in fact a realignment of the US labor
>> force. Fewer and fewer employees are needed to produce durable goods.
>> As this situation has progressed, the durable goods workforce has
>> decreased as well. This does not mean the US manufacturing base is in
>> decline. If this were the case, we would see a drop in both
>> manufacturing output and productivity. Instead both of those metrics
>> have increased smartly over the last two decades, indicating that
>> instead of being in decline, US manufacturing is simply doing more
>> with less.
>>
>> So it may be that machines and computers are doing more of the work
>> that people used to have to do.
>>
>> Robert Reich sees signs of structural unemployment as well, writing in
>> The Great Decoupling of Corporate Profits From Jobs,
>>
>> ... big U.S. businesses are investing their cash in labor-saving
>> technologies. This boosts their productivity, but not their payrolls.
>> [. . .] The reality is this: Big American companies may never rehire
>> large numbers of workers. And they won't even begin to think about
>> hiring until they know American consumers will buy their products. The
>> problem is, American consumers won't start buying against until they
>> know they have reliable paychecks.
>>
>> So what do we do?
>>
>> Maybe we need some changes in who gets what for what. Right now we
>> have an economy that is structured to send most of its benefits to a
>> few at the top, while the rest of us -- the help -- sink ever downward
>> into less and less security. People with power and wealth benefit when
>> they figure out how to cause other people to receive lower pay -- or
>> just lose their jobs. Eliminating jobs brings bonuses to the
>> eliminators -- a perverse incentive if ever there was one. If someone
>> can figure out how to cut your pay and benefits or just get rid of you
>> ("eliminate your position") they get to pocket what you were making,
>> and you get nothing (and conservatives say you're lazy). If you don't
>> own the company you're out of luck.
>>
>> In the past this perverse incentive was mitigated by people banding
>> together in governments and/or unions and forcing the wealthy and
>> powerful to share. But modern marketing science has been successful at
>> making people believe that government and unions are bad for them.
>> This was also mitigated by the ongoing need to find people to do the
>> jobs that needed to get done. But with continual improvements in
>> technology this need is reduced. We're living the result.
>>
>> Also, this perverse incentive structure assumes an infinite pool of
>> customers to sell to, ignoring that the transaction of benefiting from
>> eliminating a job also eliminates a customer. But modern business has
>> become so efficient at job elimination that this comes into play. Who
>> will be able to buy theTVs that the employee-eliminating factory
>> makes, if all the employees are eliminated and have no income?
>>
>> These are structural problems that we can change. Let me just
>> brainstorm a few possibilities for structural changes into the mix
>> here:
>>
>> # Today when they replace a worker with a machine, the few at the top
>> get another chunk of income, the worker gets nothing. But suppose a
>> worker got to keep some of the economic benefit from getting laid off!
>> Suppose that if your company replaces you with with a machine you get,
>> say, 15% of the cost-savings as ongoing income. Heck, getting laid off
>> would be a good thing, like winning a prize. After you get laid off a
>> few times you only have to work part time. Get laid off enough times,
>> you can retire.
>>
>> No young person* wants a part-time job. Besides pay, he wants to belong to
>> a
>> group, have a role in it and spend most of his time with it. (*I've
>> written
>> "young" person because he's the crux of the modern problem -- the swelling
>> number of people who will never have a job in today's increasingly
>> automated
>> set-up.)
>>
>> # Suppose we just shorten the workweek? What if we change from a
>> 40-hour workweek to a 30-hour workweek? Economist Dean Baker has been
>> offering ideas for workweek reductions for some time:
>>
>> The other obvious way to provide a quick boost to the economy is
>> by giving employers tax incentives for shortening their standard
>> workweek or work year. This can take different forms. An employer who
>> currently provides no paid vacation can offer all her workers three
>> weeks a year of paid vacation, approximately a 6% reduction in work
>> time.
>>
>> Very few people in interesting and/or well-paid jobs will consent to share
>> it permanently. And they don't want a short working week either.
>>
>> # Suppose the corporations and wealthy were taxed at the rate they
>> were taxed before all the deficits and income inequality started, and
>> the government just sent everyone a check, which served as a base
>> income? Then everyone's wages would be higher because desperate people
>> wouldn't be fighting over the few jobs. So then the better those at
>> the top do, the better all of us do.
>>
>> None of the very very rich pay a penny in tax in most advanced countries
>> already. Most of the very rich pay far less tax than they should.
>> Corporations and the wealthy always find ways of relocating themselves to
>> avoid or minimise tax. The only way to stop this would be a totalitarian
>> world government able to pry into every minute detail of a person's income
>> and activities. As even "ordinary" nation-state governments can't keep
>> their
>> own financial houses in order then preventing tax avoidance is impossible.
>>
>> These are just a few ideas for restructuring the economy in ways the
>> help all of us instead of just a few at the top. Please add your ideas
>> in the comments.
>>
>> We have a choice. We can continue with the system we have, and most of
>> us -- the help -- will just get poorer and poorer while a few at the
>> top take home more and more. Or we can change who gets what for what,
>> and everyone comes out ahead.
>>
>> Money doesn't just pile up doing nothing. It either gets lost in foolish
>> speculation and goes into others' pockets, or it's spent on goods and
>> services (by which others are given an income) or it's invested sensibly
>> (also producing jobs), or it goes to a public charity, or it goes to
>> children who in turn do any of those four things. Money constantly
>> recycles,
>> either within minutes or over several lifetimes. If you want to recycle
>> money quicker -- which, of course, is highly desirable these days -- then
>> incentives must be given to those who have the money. Preventing them
>> getting it or keeping it in any way they like means that governments would
>> have to be a great deal cleverer or a great deal more totalitarian than
>> they
>> presently are or ever have been. In actual practice governments which try
>> to
>> do these things destroy themselves with inevitable internal corruption.
>>
>> Keith
>>
>>
>> *So which will it be, cake or death?
>>
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>>
>>
>> --
>> Sandwichman
>>
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>>
>> Keith Hudson, Saltford, England
>>
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>>
>>
>
>
>
> --
> Sandwichman
>
> Keith Hudson, Saltford, England
--
Sandwichman
