Huffingtion Post (via 24/7 Wall Street) examines a serious problem facing working people: occupations that will no longer exist. As technology and processes improve, companies have been able to do away with people who perform tasks that can be automated.
The article cites the U.S. Postal Service as one example of a company that has been impacted by new systems. As more people use email and online systems for paying bills, there is less and less need for postal carriers and workers to process the mail. While this example is good, it does not address even more frightening scenarios for the job market.
What if businesses no longer needed to hire people to drive or wait tables? In the past few months, I’ve read articles that suggest that both of these occupations could go the way of the unicorn. Rather than have a waiter present the daily special and take orders, diners would make their choices on a tablet, and expeditors would bring the food/clear the tables. I don’t know if this system is practical given the waiter’s role in sales and customer service, but the system is plausible, especially for restaurants where service is less of an issue than price. I’ve also read articles that claim driving jobs will be gone by 2050 due to computerized vehicles. Imagine if all the people who held jobs as drivers and waiters were suddenly unemployed. I frequently criticize companies for paying low wages, but that is preferable to having an economy where machines do all the work.
What can we do? I don’t know. We can fight moving jobs to other countries through legal actions like tariffs and by economic nationalism (Made in the U.S.A.). I don’t know how you fight technology and progress. If a company can improve its business through innovation, it will do so. If it doesn’t, a competitor will do so. The problem of lost jobs (occupation extinction) is serious, and – like climate change – too many people are ignoring it.
Nick Hanauer makes no bones about being wealthy. He also understands that consumers need money to buy the things that make people like him rich. He’s written a great open letter to his fellow “zillionaires.” It’s long, so I’ll just link and let you take it from a billionaire with great common sense.
The former Secretary of Labor takes on those who claim that a raise in the minimum wage would be a “job killer.” Instead, Reich, a trained economist, points out a simple fact: economies grow when people spend. People living on $7.25 an hour can only cover essentials, and often can only do so with the help of safety net programs, which are being cut. Reich points out that Walmart could have raised the wages of its $9 an hour employees to $15 by using the money spent buying back stock on salary.
If we want more jobs and higher wages, we need more spending (and less billionaire greed). Raising the minimum wage (and extending unemployment benefits) would give working class people discretionary income. As they spend more, companies will need more workers to make and sell things. Reich is outlining common sense. Opponents of the minimum wage have no good data to support their claims, so they rely on fear-based rhetoric like “job killer.” They used the same language to demonize the Affordable Care Act. I’m with Reich and President Obama: “America needs a raise.”
Three cheers to Common Dreams for giving thinkers like Reich a platform that is not found in the corporate media (which includes PBS).
I heard an interesting report on the radio today via CNBC. The good news is that ADP estimates that the U.S. economy added nearly 240,000 in December. Here’s the bad news: Retail sales are down. What I found most interesting was CNBC’s interpretation of this situation: “People have jobs, but not enough money.”
Not enough money. Progressives and liberals have been beating the drum about the economic consequences of inequality for several years. Conservatives still cling to their sacred truths about deficit reduction and tax cuts, neither of which have done much to spur the economy. What about alternatives, such as raising the minimum wage or passing a jobs program or doing more to promote manufacturing in the U.S. The solutions are out there. The rich and their allies have done a great job of concealing them or repackaging them in a way that makes working people vote against their interest. CNBC captured the problem: “Not enough money.”
Check out this short (150 second) video in which former Labor Secretary explains inequality. It could be argued that his explanation is not inclusive, but it helps us see where too much of our money is going. The video shows how job loss is connected to corporate schemes to make more money for investors. It is worth your time.
Is it fair that workers are producing more wealth for their employer and not seeing a share of that wealth? Writing in Daily Kos, Meteor Blades reports on some alarming data from the Department of Labor. Productivity is increasing at an annual rate of 3% while labor costs are down and wages are stagnant. Blades does a great job of historical analysis, showing that wages began to contract long before the “Great Recession” of 2008.
This sad story is another reason why workers need to be in a constant job search. If your current employer is asking for more and not rewarding you, it’s time to test the market. For many workers, that will be the only way to get a significant raise.
Writing in Daily Kos¸ Laura Clawson analyzes what today’s national minimum wage of $7.25 is really worth. Adjusted for inflation, the minimum wage has declined to the level it was at in 1950. Clawson adds that many jobs paying this wage are part-time with unpredictable hours. What’s worse is that many of the loudest voices in the Republican Party are challenging the very concept of a minimum wage. What kind of country are we living in when poverty wages are equated with “freedom”? As I said in a recent blog, America is bankrupt – morally bankrupt.
[“Sabbath” is this blog’s Sunday feature that looks beyond jobs and careers.]
The Week Ahead
This very well could be the week the U.S. government defaults on its debt. If that happens, experts say the world economy will be harmed. So why don’t Republicans in the Congress do what their predecessors have done, which is to increase the debt limit? Politics. The GOP and its Tea Party wing have become so desperate in their hatred of President Obama that they are willing to do anything to ensure that his presidency is a failure. I am not being partisan in saying this. Why did the same members of Congress – Boehner, Cantor, Ryan – raise the debt ceiling under President Bush and allow two wars and the new Medicare program to be put off the books if they cared so much about the debt and spending? The simple answer is that Republican leaders in the House only care about politics, and they see default as a path to power. They believe the public will come to blame the President for the consequences of a default, which could include an instant jump in interest rates and a quick trip back into recession.
I’m not a great fan of President Obama. He’s been too soft in all of his dealings with the Republicans. He negotiates by starting with the compromise and then giving away even more. In some way, the GOP’s action could be based on this behavior: They’re sure he will give in again. So far, the president has been steadfast in refusing to compromise, asking to be treated as other presidents have been in the past. The problem is that the current group of Republicans is unlike any politicians we have seen in their ability to invent a reality to fit their rhetoric. They are also very flexible in shifting from demand to demand, moving from healthcare to spending and now a mix of spending and social issues. Many Democrats are gloating that this is the end of the GOP. I’m not so sanguine. If their action drives a weak economy into a tailspin, neither party will benefit, at least initially. Then when the problem isn’t solved fast enough to fit a media news cycle, all blame will be shifted to Obama and the Democrats. Even if the GOP caused the problem, the Democrats didn’t fix it. This seems to be a very high stakes game of chicken. I fear there will be a very ugly crash, and it will begin later this week.
Huffington Post has a great story about the growth of income inequality in the U.S. It includes an animated map that shows changes over the decades. Anyone who doesn’t think this issue is a problem needs to have an explanation for this map. As I said in a recent post, this trend of new income going almost exclusively to the top 1/% and top 10% cannot continue.