The following link contains a must-see chart.
Economist's View: How Bad is the Job Situation?
There's also a video offered by Goldilocksisableachblonde within the comments that is a must-see. I have embedded it below. It is a short video with a few animated graphs that should make your jaw drop.
Capitalism Hits the Fan
One reason I turned bearish was because real wages peaked in the 1970s and I was not optimistic about real wages heading into the future. I still believe that, now more than ever.
Here's another related link.
ReplyDeleteJobs of the Future, Part 3
Whoaaa, self linkage!
ReplyDeleteAs in the last post, robots = better productivity = better margins - workers = better bottom line = higher stock price and no jobs. Sounds like a winning idea.
You all mocked me when I said the next bubble was going to be robots BTW.
GYSC,
ReplyDeleteThere's no robot bubble! That implies that robot technology is unsustainable and will end with a crash. Right?
Robots will not be nearly that willing to give up control once they have it. ;)
Horse bubble! That's what you can talk about though. Warren Buffett once said that a smart man would have shorted horses once the car was first produced.
Here's the scary part.
1. Horse Transportation -> Automobile Transportation
2. Human Workers -> Robot Workers
How does one short human workers though? It certainly issn't by offering them nearly unlimited credit on the hopes that they would buy expensive real estate.
I am sure the HFT algos will figure a way to short humans before long.
ReplyDeleteChemelil eyes automation in bid to boost efficiency
ReplyDelete“We have given automation of our boilers the priority,” said Managing Director Edward Musebe.
...
The automation of Chemelil is expected to trigger similar cost-cutting measures in other factories that have not done so and will most likely result in reduction of employment opportunities especially for unskilled labourers.
Specialist skills help slow drop in employment
“Undue wage escalations increase the use of labour-saving alternatives such as automation and mechanisation, thus reducing the economy’s overall labour intensity and aggravating unemployment.
Factory Jobs Return, but Employers Find Skills Shortage
During the recession, domestic manufacturers appear to have accelerated the long-term move toward greater automation, laying off more of their lowest-skilled workers and replacing them with cheaper labor abroad.
...
The jobs, which would pay $18 to $23 an hour, require considerable technical skill. On an afternoon last month, Christopher Debruycker, 34, was running such a machine, the size and shape of a camper van parked on the factory floor.
Mr. Debruycker, who has been an operator for 15 years, had programmed the machine to carve an intricate part for a flight simulator out of a block of aluminum, and he monitored its progress on a control pad with an array of buttons.
“We need 10 more people like him,” Mr. Peterson said.
10? Wow! That should make a serious dent in the 15 million currently unemployed!
GYSC,
ReplyDeleteI am sure the HFT algos will figure a way to short humans before long.
Understatement of the month!
Trading Goes Hi-Tech as Machines Take Over
The programs are faster than humans, and also smarter -- they learn from their mistakes and adjust strategy accordingly, which considering the recent past, is something humans sometimes just don't do very well.
Actually, with the rise of China, people took over many machine jobs. In China you can find people manually bending steel tube whereas when production of the same item was in Taiwan, a hydraulic machine was used. That is changing now of course, as China invests in capital.
ReplyDeleteI wonder if real wages started to stagnate when international trade took off. As wages across the globe now start to converge, we will end up in another state where wages can grow again as there are less opportunities to arbitrage. (This is in the mid-term future not tomorrow.)
The fact is that factories started in China only a few years ago, now start to move to Vietnam or Cambodia in search of cheaper wages...that is an amazing testament to the free flow of capital now, and that China is not going to rule forever.
cobacoba98
cobacoba98,
ReplyDeleteI agree. The idea that the Chinese factory worker will ever reach the level of prosperity American factory workers once had is a myth in my opinion.
Heck, I wouldn't even bet on their fruit pickers competing with ours. Check this out.
Fruit picking
As labor costs are still quite expensive in fruit picking, robots are being designed that can replace humans for this kind of work.
It is hard to imagine that anyone can say with a straight face that fruit picking labor is quite high, but relative to what robots might someday do I suppose it is.
"The idea that the Chinese factory worker will ever reach the level of prosperity American factory workers once had is a myth in my opinion."
ReplyDeleteThey might once global wages converge, but by that time, there may be many robots doing the jobs, so a "factory" worker may just be a programmer or maintaining robots...but you know, unless its very high volume and needs high accuracy, like auto welding, I am not sure we will get full automated by the time wage convergence occurs.
Just another anecdote for you: major furniture company in China (originally from Taiwan) is opening a new factory in Bangladesh - who's after Bangladesh? Ethiopia?
Oh, and I read somewhere that after the migrant worker Bracero program was cancelled in the 60's they came up with a robot to pick tomatoes...not exactly an intuitive first produce item to be picked by robots. I think people still have to plant the plants though. Watering is now automated of course.
ReplyDeleteMy mother saw some migrant workers in the field on a hot day and declared they should be paid 20 bucks an hour...LOL, well if society was so generous, then robots would take their jobs pretty quickly. Then they could enjoy unemployment.
coba
coba,
ReplyDeleteThey might once global wages converge, but by that time, there may be many robots doing the jobs, so a "factory" worker may just be a programmer or maintaining robots...but you know, unless its very high volume and needs high accuracy, like auto welding, I am not sure we will get full automated by the time wage convergence occurs.
Absolutely. I did not word what I was trying to say correctly. Let's just say that I don't picture 400 million highly paid Chinese factory workers at any point in the future.