Is there no solving the U.S. unemployment problem?
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The government’s dismal report on May private-sector job creation has been casting a long shadow -- a sign of just how badly many Americans (or at least, economists) wanted to believe that employment was finally coming around.
My colleague Don Lee’s weekend story about new college graduates’ employment blues joins what has become a major debate, which is whether we are facing a secular rather than just cyclical problem: What if the U.S. economy, for all its celebrated dynamism, simply isn’t capable anymore of generating a meaningful number of good jobs -- not now, or even years from now?
Lee writes:
The Bureau of Labor Statistics projects that seven of the 10 employment sectors that will see the largest gains over the next decade won’t require much more than some on-the-job training. These include home healthcare aides, customer service representatives and food preparers and servers. ‘People with bachelor’s degrees will increasingly get not very highly satisfactory jobs,’ said W. Norton Grubb, a professor at UC Berkeley’s School of Education. ‘In that sense, people are getting more schooling than jobs are available.’
Economist Mark Thoma wondered on his blog this week, “Where will the good jobs come from?” and conceded he couldn’t offer a satisfying answer.
The idea of a deepening U.S. structural employment problem is rooted in part in the depressing data on the soaring numbers of long-term jobless since the recession began in 2007.
That has given more of a voice to pessimists (or, they would say, realists) like Martin Ford, a Silicon Valley entrepreneur, author and blogger who believes that the pace of technological advancement has reached a level that will render many more American workers not just unnecessary but probably unemployable, period.
On Fortune magazine’s website this week Ford wrote:
As technology continues to accelerate, the number and types of jobs that can be automated is certain to expand dramatically. It’s not just factory workers that can be replaced by robots and machines: Rapidly improving software automation and specialized artificial intelligence applications will make knowledge worker and professional occupations requiring college educations and advanced skills increasingly vulnerable. Yet even economists who think unemployment will be high for five or more years hold onto principled but ill-defended beliefs that unemployment will eventually return to normal levels, just because it always has. But what if this time, something’s really different? Technology isn’t going to stand still while we wait for the job market to recover. As jobs of all kinds get automated at an increasing pace, it may turn out to be extraordinarily difficult to find our way back to an acceptable unemployment rate.
Not surprisingly, Ford has been mocked as a modern-day Luddite. Classic economic theory is that technological achievements ultimately are good for nearly everyone, even the workers they may temporarily displace. Economist Robin Hanson has derided Ford’s views as “intuitive folk economics.”
Obviously, the combination of technology gains and economic globalization (i.e., the rise of China, etc.) have destroyed many U.S. jobs over the last decade, while creating others.
Ford’s view is that America has reached the endgame, and that Schumpeter’s ‘creative destruction” of innovation and progress will mean far more destruction of old jobs than creation of new ones.
But if Ford’s right, isn’t capitalism as we know it reaching the endgame?
-- Tom Petruno