economy, joblessness, technology, wealth disparities

In the early 1900's America was deep into mechanizing and automating agriculture.  From year 1900 to year 2000 we improved our efficiencies in agriculture such that the amount of the US workforce employed in agriculture dropped from 42% to 2%. One might argue that this was one of the causes of high unemployment in the years following the crash of 1929 - people who knew how to farm found that the farms didn't need them anymore.  However, eventually service jobs and manufacturing jobs appeared and these took up the slack.

source: http://www.ehow.com/facts_5314052_summary-qualifications-customer-service-jobs.html

Take a look at this chart on how our jobs have changed over 170 years:

source: http://www.minnpost.com/macro-micro-minnesota/2012/02/history-lessons-understanding-decline-manufacturing

Over the past 60 years the same thing that happened to agriculture has been happening with industry (industry = manufacturing + mining + refining + construction) -  efficiencies are being improved and less of our workforce is needed to do these jobs.  Today, only 20% of our workforce is hired in industry.

Less than 12% of the US workforce is currently hired in manufacturing jobs.  Even if there were no imports of manufactured goods from other countries - all the manufactured goods we consume could be produced with only 15% of our workforce.  

Today, with only 2% of our workforce employed in agriculture we export more food than we import. 20 years down the road from now I fully expect we'll be able to say "today with only 2% of our workforce employed in manufacturing we export more manufactured goods than we import".

77% of our jobs are now service jobs. Its about the same in Europe, and in most all advanced industrialized nations. 

As our technologies further improve who's to say that service jobs won't succumb to the same fate as agriculture and manufacturing jobs?  Is this part of what's going on in Europe? - their unemployment is currently about 12%.

Computers and robotics capabilities are becoming good enough that they are now doing things that just a few years ago were jobs that could be done only by people.  There are now prototype robots to do the work of caregivers. Several big computer/information processing outfits are currently in a major race to be the winners in supplying systems for cars-that-drive-themselves. Google already has a fleet of driver-less cars that are on the road 24 hours per day in Nevada. Once it's established for cars, trucks will soon follow, and whoops!, there go the truck driver jobs. As computer software is improved we need less accountants and less tax preparers. A number of big schools are starting to offer Massive Open Online Courses (MOOCs) - with these we need fewer teachers.  Look around, there are technologies being applied every day that are making things easier for us - ie: taking away our work, our jobs.

I'm convinced it's entirely possible many of our service jobs will disappear too - and this may be just around the corner. Joblessness could soon become a much bigger problem than it already is.  In contemporary times an individual's wealth, value and position in society are largely determined by his job - his means of earning money. What would happen if unemployment were to rise to 30% and above?  Would 30% of us then be denied having any sigificant wealth, value and position?  We could train the unemployed and help them get jobs, but for every one hired it could just be that another gets canned and becomes newly unemployed.  Do we ration out the jobs so that everyone gets a bit of the pot - say by restricting people to work no more 30 hrs/week?  Could a system like this serve as the new system for distribution of wealth?  Who would control such a system?

Something that comes with advanced technologies - enhanced possibilities for individuals to make huge fortunes.  In many companies the numbers of employees has been shrunk and the smart executives have become more valuable. So they are paid more. Movie stars, writers and performers today sell their products across the entire world, and today there are less middlemen, so the artists and writers earn more. Same for movie producers, and game producers. I believe technology driven streamlining of this type is one of the key reasons the incomes of the very rich have been growing at rates considerably exceeding those of the middle class, and the incomes of the middle class have been growing at rates considerably exceeding those of the lower class. Take a look at this chart:

source:  http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States#Indicators

• Note 1:  This graph shows the income of the given percentiles from 1947 to 2010 in 2010 dollars.  (Percentiles indicated in the center of the graph.  (Example to explain percentile: the 20th percentile curve represents individuals who have incomes that only just exceed the 20% of the lowest income individuals.)  The vertical scale is logarithmic, which makes constant percentage growth appear as a straight line. From 1947 to 1970, all percentiles grew at essentially the same rate; the light, straight lines for the different percentiles for those years all have the same slope. Since then, there has been substantial divergence, with different percentiles of the income distribution growing at different rates. For the median American family, this gap is $39,000 per year (just over $100 per day): If the economic growth during this period had been broadly shared as it was from 1947 to 1970, the median household income would have been $39,000 per year higher than it was in 2010. This plot was created by combining data from the US Census Bureau^[48] and the US Internal Revenue Service.^[49] There are systematic differences between these two sources, but the differences are small relative to the scale of this plot.^[50]
• Note 2: inflation has been taken out of this chart - the numbers are in 2010 $.  
• Note 3: The 2 columns of numbers in the right margin are the cumulative growth 1970-2010 and the annual growth rate over that period.  

You might think that income and paroll taxes are being used to even the playing field. But the fact is that over the past 40 years tax collections have moved in the reverse direction - the very wealthiest have seen the greatest tax reductions: 

source: http://en.wikipedia.org/wiki/File:Federal_tax_rate_by_income_group.png

So, as we go the future:

• there could well be a lot more joblessness;
• it looks like there will be larger wealth disparities (jusy a continuation of the trend of the last 40 years);
• the tax rates for the super rich are at their lowest levels in 40 years.

With the combination of these three things we could be moving into a period of high discontent...   Maybe we should spend some time thinking, discussing and acting on the disparity issues now, rather than just waiting until deep discontent is upon us.