Half the population is below average intelligence, and perhaps 25% (total guess) might be best suited to a manual or semi-skilled role. What are we going to do with them?
When similar things have happened previously, the once semi-skilled (eg) shipbuilder becomes a low wage driver or call centre worker. Many in an area didn't get those few roles, so became unemployed (and often depressed) for the rest of their careers. Some steel or shipbuilding towns haven't fully recovered even today.
Longer ago the farmhand could get any number of manual roles in the growing industries. Blacksmiths became car mechanics, fuel attendants and so on.
Also when it's only a number of regional cities affected, like with coal, steel or shipbuilding, it's much easier politically than when it's national.
If you were a 55 year old long haul trucker, you aren't going to be able to replace the income/benefits you had with a $7/hr (pre-tip) service sector job.
waitstaff isnt paid that much hourly. Its generally on the order of 2-3$ per hour.
edit: since im being downvoted i assume someone disagrees - here is a source:
from nolo.com:
>Employers must pay tipped employees at least $3.23 an hour in 2016, $3.38 an hour in 2017, and $3.52 an hour in 2018.
http://www.nolo.com/legal-encyclopedia/michigan-laws-tipped-...
Technically you can sue your employer if they wont pay you the difference if you dont end up making enough in tips to end up at or above minimum wage - in practice however, suing your employer is generally not a great way to stay employed
http://www.nolo.com/legal-encyclopedia/michigan-laws-tipped-...
Only way I know round UK min wage is to be self-employed, or one of the fake "self-employed" like some delivery drivers have had to become. Surprised the IR haven't slammed the door on that little scam yet.
That said, it's not uncommon to get at least minimum wage.
https://en.wikipedia.org/wiki/Tipped_wage_in_the_United_Stat...
Can they absorb another 10m (or however many there are) truck and van drivers who probably made quite a bit more? I know it won't be overnight, but it seems to be rapidly becoming a political rather than economic question.
Like must we learn to run at 20-25% unemployment instead of <10? We'd probably have to learn to stop viewing them as scroungers too and adjust welfare somewhat.
No, they aren't. Many "low-margin, framented service jobs" of the type you list are often effectively sub-minimum wage (possible because they are usually independent sole proprietorships renting facilities from the entity that looks like their "employer") highly-saturated already, increasing the proportion of the population trying to work them will further crash wages.
Who is eating at these restaurants that wasnt before? Why would they suddenly be hiring millions of people at restaurants?
Who is suddenly attending more fitness classes now that there is massive unemployment, to the extent that we need millions more fitness instructors?
Your suggestions dont make any sense whatsoever. If you had said Campbells soup company would be hiring you might be on to something, but in the face of millions losing jobs, luxuries like restaurants, fitness classes, etc certainly wont be seeing massive growth in demand....
Assuming intelligence is normally distributed, which I guess is a commonly accepted thing :-D
In the 20th century, the population of horses (in the US) started declining rapidly, from a high of over 20 million in 1920 to under 5 million in 1960. Industry decided the horse was unnecessary after thousands of years of history, thus they were slaughtered in short order.
The only difference between me and a horse from the market's view is that I do different jobs and consume human goods. To the extent that I am necessary it is because the market will need someone to move goods and services to, but left to its own devices it might well decide to sell weapons that I get killed with. Markets are honest, not smart.
Used to be, worse came to worst, you'd just go be a hired hand for someone: a farmhand, a servant, a soldier, a sailor, etc. It also used to be that four walls and a roof was a home and bread and what-you-can-grow was food. Our standards of living are different now, at least in developed nations. We also had social structures that included multi-generational communities. So the grandparents, older relatives, etc. would watch the children, help around the house, etc.
Also, people ate worse, got sick more, and died younger.
There doesn't need to be anything "fundamentally different" except that we finally reached the exponential part of technological progress, which up until now seemed like a linear process. Just like population growth until 1800s, or economic growth until the 1820s. Those two were pretty much linear and not very different from zero until they weren't.
I don't actually subscribe to this rationale, though. I'm just putting it out like this because it's pretty much what everybody says and I recognize that it's quite plausible, given the two first hypotheses.
Most processes involving people (and lots of others, besides) that look exponential at some point are really logistic, so even in that case, there's probably some equilibrium point somewhere in the future, though its possible that its many generations down the line from the point where the appearance of exponential change first occurs.
On the other hand, I'd like to say that it's also possible that some particular processes can follow exponential laws without any restriction. It might be somewhat hazy, but what if outside of a few measures (infant mortality, life expectancy, etc) economic progress is nothing more than a subjective measurement of how present consumers value past output?
I'm not saying anything new here, both Easterlin's paradox and the idea of a "hedonic treadmill" support the idea that more income doesn't necessarily equate into increased happiness. And specially in the case of economic innovation, which might not actually be technically interesting or require any "new physics" at all - just mashing some current technologies into a marketable product - it might never ever stop, and will just degenerate into an endless chase of ever changing fads. Past economies wouldn't be particular poor, just particularly quaint, and a repository of dead fads.
http://www.gwern.net/Mistakes?cx=009114923999563836576%3Adv0...
Here are a few prominent ones:
http://economics.mit.edu/files/5554 https://hbr.org/2015/06/the-great-decoupling http://www.economist.com/news/briefing/21594264-previous-tec... http://ftalphaville.ft.com/2014/08/28/1942571/david-autors-g... http://krugman.blogs.nytimes.com/2011/03/06/autor-autor/?_r=... http://www.asymptosis.com/are-machines-replacing-humans-or-a...
[1] Autor, Ford, Cowen, Krugman, Acemoglu, Brynjolfsson, McAfee just to name a few
I mean, one could probably say that the economy has balanced out after the great depression, after WW2, after the 2008 crisis, and so on. Many people did not.
If so, I missed that portion in my history classes.
EDIT: Bah. Too late.
"The economy" did not "balance out". "The economy" is not an active agent. The economy was politically managed -- for instance, via the Fed's original mandate to encourage full employment. What prevents similar management taking place today is ideological opposition to it.