One of the key aspects of human efficiency is making decisions based on facts, data, and nonideological logic. This is a critical aspect of having an efficient government and political system. In this post, we will continue to look into the issue of jobs in the U.S. The lack of jobs in this country is a growing problem which is having a serious impact on the middle class.
The president ran on a platform of bringing jobs back to the U.S. This sounds good but the more you look at the facts, the more you realize that this is just one part of the overall issue. In reality, data from The Reshoring Initiative indicates that although the U.S. was losing an average of over 200,000 net jobs a year ten years ago, the net jobs coming and going are now about equal. This problem is turning around as we become more productive.
In reality, the major issue of lost jobs is due to productivity gains. A study by Ball State University indicates that about 88 percent of job losses in manufacturing recently are due to productivity growth and only about 13 percent are due to trade, or overseas production. Productivity results when we manufacture things more efficiently which reduces the need for workers.
Some industries are impacted more than others by robots and automation, such as the auto industry. For example, General Motors produces more cars than it did in the 1970’s with about one third of the 600,000 workers that it had.
And the problem will likely get worse. A study by PricewaterhouseCoopers found that 38 percent of U.S. jobs could be lost due to automation and robots by the 2030’s. However, some of these jobs may change to higher skill level jobs rather than disappear.
However, this results in another serious problem – increasing wealth inequality. According to research by MIT, robots have had a large negative effect on the wage gap and employment in some areas. As with most things today, the stockholders will benefit and the employees will suffer which will lead to even greater wealth inequality.
With all of the recent talk about robots and the associated job loses, the discussion has turned to: What can we do about it? We need to remember that automation and robots lead to increased productivity which improves our standard of living. These are all good things. The same can be true with jobs. Just think of lying on a beach, doing nothing, and getting paid while a robot does your job. This is not what happens but this is the way that we need to approach the problem.
Universal Basic Income (UBI) is likely the best solution to resolve this issue. In effect, this is a guaranteed paycheck that would allow workers to be more financially secure between times of employment given the lack of available jobs and the associated uncertainty in the future. Of course, there will be detractors who will point to the abuse of such a system.
The more progressive European countries such as Switzerland and Finland are already considering UBI and no doubt other countries will be the first to develop and implement such a system. However, the need to do something is already becoming evident in the surging death rate among poorly-educated, middle-aged whites due to distress related to the jobs situation.
Unfortunately, the Treasury Secretary recently commented that the threat due to robots and automation was “not even on our radar screen,” and was likely “50 to 100 more years away.” I wonder what is on the radar screen?
The goal of these posts is to provide the true story behind issues that we are facing in this country. We can no longer allow ideology to make decisions for us when facts and data prove that we should be doing thing differently.
Next: Employees and Shareholders