The Sad Statistic That Trumps the Others
nytimes.com
nytimes.com
I guess interpreting things pessimistically is good journalism, but if we're consistent I don't see why we would not apply the same rationale here. Businesses feel more confident about the future now, so they are resuming work that has lower marginal benefit, decreasing productivity relative to hourly wages.
It seems a bit inconsistent to interpret both positive and negative changes in productivity pessimistically. I would expect one to be interpreted positively and one negatively, unless we are currently at some optimum amount of productivity and a change in either direction is bad. I can't think of a mechanism by which this would be the case, so I'm inclined to write off this article.
Previously, jobs were being shed and productivity was rising.
Now, jobs are still being shed and productivity is declining.
Oh, and it's not the highest since the Great Depression either -- there was a spike to 10.8% in 1982.
http://www.google.com/publicdata/explore?ds=z1ebjpgk2654c1_&...
Isn't data wonderful?
Data is not wonderful when it is used to confuse and deceive rather than enlighten. Data becomes a tool of enslavement when a word like "unemployment" takes on an operational definition that does not reflect the public perception.
Participation, of course, is a tricky beast. Sometimes people stop participating because they're despairing over being able to find a job, but they also retire, or get pregnant, or go back to university or (if immigrants) their home countries.
He presented no statistics at all, you presented statistics that are clearly entirely ignoring a important figure.
Neither of you seem to be at all interested in seeking the truth, each just advancing their own personal agenda.
meh.
When in reality, those statistics have been cooked. Those numbers don't include people who have given up looking, the underemployed, part-time workers, or even suicides.
The Bureau of Labor Statistics is part of the problem. Their measurements are deceptive.
At any rate, all the actual data linked in this thread points to the view that unemployment is not at its peak since the great depression. Unless you post something credible to refute that, I'm going to assume that I was right about this point and that your hypothesis is unsupported.
Sadly I blame the UAW, for then and for what's happened to Detroit since, but it still happened. It was grim. Sadly, a UAW like solution solves some problems but creates some bigger ones including just killing off the whole industry it tried to 'organize'.
Yeah that appears to happen when you inflate the money supply yet continue to measure in productivity using cash paid in devalued funny money. Prices in funny money are inflating by over 30% a year right now so of course salaries have to go up to prevent the hapless workers from starving. Productivity is doing great though in terms of real money such as gold, where the cost of labor has dropped significantly.
The article conveniently avoids discussing that and distorts other relevant information. For example, when they say "The United States spends more per capita on health care than any other country, yet without producing measurably superior results.", it is pretty misleading since it suggests results are comparable despite the high spending. It should instead read "while producing measurably inferior results compared to nearly all modern economies".
"The United States spends more per capita on health care than any other country, yet without producing measurably superior results."
That situation is always easy to obtain: Just do a sufficiently poor job at measuring the results.
The tiny, short-term drop in the quantity he quotes says nothing, not even as much as zip, zilch, zero, about his claim of "trump" and lower productivity for the world. For such a claim, we'd need some data over a longer term and for much of the world and not just for the US. And we'd need more than the data: We'd also need some good candidate explanations. His article has no such and no references to any such.
Instead, with so little data, some of the best data is striking and not in the article:
Look at 'productivity', for the US and the world, in 'information technology'. E.g., it was not so long ago that 1 billion bytes of disk was in a box about the size of a large SUV and would really set you back, and now can get 1 billion bytes in main memory for about $5, retail. For just disk, about $100 will buy about 3 trillion bytes. It may be that of the 1 billion byte boxes, they never sold in total as many as 3000 for 3 trillion bytes. There was a time with reports that FedEx had, in total, 7 trillion bytes of disk. Now that's about $300 in a mid-tower case for about $100, actually, a whole computer with four processor cores for less than $1000. Did someone mention 'productivity'?
Think about telephones: I well remember paying monthly telephone bills of well over $100. Not anymore! Think of mobile phones, useful in many trades, e.g., electricians and plumbers, nearly anyone who in their job spends a lot of time in a car: A mobile phone used to be just some radio in, say, a police car; then a mobile phone was about the size of a brick; then a mobile phone would fit in a shirt pocket; now a mobile phone is a quite capable computer, Web browser, video camera, movie player, electronic funds transfer device, etc.
Think about tire life: It used to be that 10,000 miles was good tire life. Now can routinely get 80,000 miles. Better chemistry for better tires!
Cars are safer with more air bags, body designs better in crashes, anti-lock brakes, stability control, various warning systems, etc. So, auto insurance rates should go down, and that's 'productivity'.
Carbon brake disks are coming to cars, and the disks can be guaranteed for the life of the car. "Look, Ma: No more brake jobs!".
Think about car engine life: With all the computer controls, get much less gas and water in the oil and, thus, get much longer engine life.
Think about the changes in house building materials and tools: Now can put up a house for many fewer worker hours. And house insulation: Have much better insulated roofs, walls, doors, and windows, with much less air leakage, for much lower HVAC bills.
Seen a cargo ship lately? They are HUGE, carrying oil, natural gas, or containers, with much better cost per ton-mile.
Bandwidth should count: Kept track lately? Now can put several trillion bits per second on one wavelength, some dozens of wavelengths on one long-haul fiber, maybe 144 fibers in one cable, and several cables along a road, pipeline, high voltage electric line, river, coastline, etc.
Remember the 'T-1 leased line' from Ma Bell? That was 1.5 million bits per second (Mbps) for over $1000 a month. Now for less than $60 a month I have 15 Mbps download speed and 2 Mbps upload speed. For another $65 a month I can get a static IP address, 101 Mbps download speed, and 15 Mbps upload speed. We're talking at least 10 times the data rate for about one tenth the cost for a 'productivity' increase of 100:1, before counting inflation. We were talking about 'productivity', right?
Heck, now robots are cheap enough that even the Chinese are converting from manual assembly to robots.
A guy had some chest pains. In the hospital they did an angiogram, found a clot in a coronary artery, sucked it out, and sent him home the same day. To get home he drove his own car. Did someone mention "productivity"?
I still have a nice sack full of gorgeous Nikon camera equipment. But it uses just film. It's still okay, but now a digital sensor can have 48 million individual sensors, four for each pixel, that is, two for green and one for each of red and blue in a little square, giving 12 million pixels giving an array of 3000 by 4000 pixels. So, no film developing! Anyone mention 'productivity'? Maybe ask Kodak?
Have a question about something, from how to get stains out of cloth to how to configure SQL Server, etc. Okay. Do a Google search and find blogs, fora, PDF files, etc. Or go to Wikipedia, Quora, or HN. Used to be had to drive to a library, maybe even a university library. Anyone mention 'productivity'?
Ask the USPS about 'productivity': They have discovered that the Internet has replaced a significant fraction of their mail volume, so significant that they are in financial trouble and having to close some post offices.
Work in some technical field with a lot of math, say, math, physics, engineering? Try to get the typing done? Hope you never had to do that; commonly the typing was more work than the technical work. Now with computers, Knuth's TeX, laser printers, and PDF, the typing is reasonable and routine. The productivity gains here are some factors of 10; for technical writing, we're talking another Gutenberg.
Gotten a printed bank statement in the mail lately? I get my bank statements as PDF files over the Internet. 'Productivity' anyone?
It used to be that a bank had to physically sort the checks and have someone visually read the check and manually key in the amount. Not anymore! Now at a retail site, the 'check' is mostly just nonsense, just my receipt, and the transaction is all electronic. The amount is keyed in at the cash register for the first and last time. 'Productivity'? anyone?
My driveway is steep, and last winter I needed tire chains to get out but had no tire chains. But the Internet worked! So, I ordered some tire chains from Amazon, got them, put them on, and drove out! I didn't have to get towed out or drive to an auto parts store for the chains. We were talking about 'productivity'?
Intel is now down to 14 nm line width (Atom processors), and has stated that they see their way clear to putting 1000 cores on a processor and having them work together effectively. We were talking about what, 'productivity'?
Let's see: The key to productivity is automation. Now the key to automation is computer control. Computer control is based on computer hardware, which keeps falling rapidly in price, and computer software. The ability to develop software has increased enormously with progress in, e.g., Windows and .NET. We just now have the computers, disk storage, operating systems, middle-ware, languages, libraries, networks, and Web services for some astounding progress: We should be at the beginning of by a wide margin the greatest increase, in percentage and absolute terms, of productivity in all of history.
Now what was it we were talking about, hmm, 'productivity'?
The missing link in your story is that the secretaries and phone operators and librarians put out of work cannot afford retraining and cannot get loans to retrain. So they are converted from middle class wage earners to the ghettoized poor.
Without a social safety net, gains in productivity only benefit a small minority. The middle class is being cannibalized by your kind of thinking.
Minimum wage laws mean it is illegal to pay someone a fair wage for menial work. Ergo, the uneducated no longer have jobs. The work must still be done, but as it is illegal to hire a person we automate the process.
Higher education is free. Libraries, Internet, ... MIT has all curriculum on line for free, along with many other schools. Certification is what's expensive, and so long as people are willing to commit to stupid huge loans the prices will keep going up.
As an instructor I am astounded at the percentage of students who just will not do the work. It's not that they cannot afford retraining - there is a host of funding options, and if you're paying list price you're doing it wrong - it's that they want certification without education.
The safety net is being abused. Between outlawing viable poverty and wanting benefits without effort, only a small minority are willing to be productive and gain the benefits thereof.
The reason people have trouble learning is because they are victims of mass culture. When a child is raised on corporate propaganda from age 1 how do you expect him or her to be intellectual?
You phrase these things in moral terms and indicate that the failure lies with those in poverty. But we intellectuals discovered long ago that those in poverty behave in predictable, controllable ways.
Garbage in, garbage out. The public schools have become corporate propaganda systems and the Universities have lost all sense of public duty.
The poor can't educate themselves. They need an enlightened class to protect them (using government) from the powerful forces of propaganda.
You sit in your ivory tower and blame the victims, when you have no idea what it's like to be raised by a television and modern public schools bought and paid for by special interests.
Children are impressionable and stupid. Your classes have to compete for attention with the greatest propaganda machine the world has ever known: the U.S. corporate media.
Or it's "the great wasteland".
Or it's the "message" in "the medium is the message".
But heavily it's the old tried and true of the humanities culture, 'drama' as in 'formula fiction', especially as in the 1000 year old 'morality' plays.
So, I'm reluctant to believe that more of the 'humanities' culture will have a solution.
Or, with high irony, in main results, if not in all intentions, the 'humanities' are a great enemy of humans!
In some ways it's a BAD situation.
But, in 'productivity', that is, economic results per dollar, that remains. It's just that increases in 'productivity' don't always mean an increase in standard of living, quality of life, better society, etc.
All I addressed was productivity, not standard of living, 'the social contract', 'financial security', a 'better society', etc.
You are absolutely correct that much of the technology that has increased productivity has hurt a LOT of people. And it is very true that our society needs to do something about this situation.
And, moreover, if count the cost of the 'safety net' for the people put out of work for the technology, then it may be that, with also the cost of the technology, sometimes there is a net loss in 'productivity'.
For another example, Google, Craig's List, etc. are putting out of work a LOT of people in the classified ads departments of newspapers. Heck, the Internet is putting a lot of newspapers and magazines out of business: Newsweek just sold for, what, $1 to someone who wanted to run it as a personal interest instead of a business?
I haven't gotten a newspaper or magazine on paper in years, and last week I finally hauled out three really heavy, big, green plastic bags of old magazines.
Still, in the long term, larger picture, and in the sense of the article, 'productivity' marches ahead. We don't like all the downside, but, still, we don't really want to go back. So, we need to find better solutions for how to move ahead.
Sure, it's too easy to see that too soon we will have to give everyone a basic 'stipend' so that anyone who wants more can work and make much more. Doing this and keeping a 'productive' society will NOT be easy.
Or, what happens when Robots, Inc. makes a robot for $1000 that can do the work of over 90% of the current jobs?
Still, the article and I were writing about JUST 'productivity' and not at all about your, justified, concerns about 'quality of life'.
Your scenario of giving people a stipend seems politically unlikely. The trend, which shows no signs of abating, is for the American standard of living to simply diminish unrecoverably. This has been happening for 40 years.
The average American's lifestyle is moving toward the average Chinese lifestyle. That trend will continue without political intervention.
Political intervention will not occur as long as the intellectual class (e.g. you and all the people you influence with your adept analysis) remains politically neutral in their spare time.
No, again, I just addressed the point of the article, 'productivity'. To move on to address the 'social', etc. results from getting more productivity via information technology would have been 'off the subject'. Or, raw productivity remains important.
For your concerns about China, I'm not much concerned. My biggest concern would be that they will be able to compete more for some of the 'world-market' goods such as oil. But, the US doesn't have to be short of oil: We are just awash in shale oil and coal, both of which can be made into gasoline, at roughly present prices. And longer term, with bioreactions, possibly endothermic and driven by electric power from nuclear reactions, we need not be short on energy in any important forms.
For the US 'standard of living' in, say, GDP per person, one decade at a time, I see that increasing at a nice rate and not falling. Yes, GDP per person is an 'average', and taking the average raises some issues: So on the one hand is someone out of work who made $50,000 a year, and on the other hand is someone who gets a vacation for three months in the south of France in a hotel at $2000 a day. So, how to 'average' that?
Or, after $100 million, who would even walk across the street for another $1 million, yet a poor person would crawl across the street for $1000, $100, maybe $10. So with a high GDP per person, we can have more people not willing to walk across a street for another $1 million while we have others stuck with very low fraction of the GDP.
Broadly, a society awash in cheap robots should not have nearly all the humans destitute and on the streets but with really well off humans being served by the robots!
Really, that desirable future needs more, actually MUCH more, economic productivity because the GDP per person now is not nearly high enough.
So, one issue is increasing the GDP per person; another issue is what to do with the increases.
Here's a first-cut, fairly automatic resolution: Currently an information technology entrepreneur can start a business, get a large increase in productivity, keep the revenue and earnings, and put out of work a lot of other people. Well, as people go out of work, the safety net will cost more and taxes will increase. Then the entrepreneur will not deploy the technology unless the revenue can cover BOTH some earnings AND the taxes for the safety net. So, technology that does get deployed will increase productivity enough to pay for both the technology AND the people put out of work. Or, instead of the Google founders being worth maybe $15 billion each and putting out of work thousands of people in, say, newspaper classified ad departments, the Google founders will pay higher taxes and the safety net for the former newspaper workers will improve. Our politics and society might move to such a situation without ever really agreeing that 'technology should pay for the jobs it kills' or some such.
For the politics, I'm against stupid government that makes things much worse, and we've had WAY to much of that. It would be negligent for me not to mention the real cause of the housing bubble that caused The Great Recession: My view is that the bubble was caused by stupid government, by Obama (when he was a Senator), the Black Congressional Caucus, and Barney Frank telling Fannie and Freddie to back junk paper. It was NOT caused in any significant sense by Wall Street, 'complex' financial instruments, AIG, or the bond rating agencies. I do agree with Greenspan that he was a significant cause.
I do want my slice of the pie to get bigger but from making the whole pie bigger, not from taking from someone else, but this desire does not translate very directly into any feasible, effective 'political action'.
Beyond politics, a crucial issue is, yes, good government and, then, MORE, actually MUCH more, economic productivity. Only with more GDP per person can we have the safety net as strong as we want it. Or "The problem with socialism is that it too soon runs out of other people's money.". Right. So, one solution is enough more economic productivity so that the other people won't run out of money. Simple enough.
Then there will be other problems: The political system can split into (1) the people working and (2) the people in the saftey net. Then the people in (2) can so choke the geese in (1) who are producing the golden eggs that in every sense standard of living stagnates. Indeed, that is a common description of just what is going on in most of the more socialistic European countries.
Yes, a worker makes a big 'investment' in education, training, experience, etc. in their career. In accounting terms, that investment is an asset on their personal, financial balance sheet. Then when they lose their job, they have to 'write off' that asset. That 'write off' shows as a big loss on their income statement for that year. So, who covers that loss? The person and no one else. And, you are correct: We are short of capital to replace that asset on that person's balance sheet. So, the person is now 'under capitalized' and like such a business that has shut down and left a building with a leaky roof, broken windows, and weeds in the parking lot. Not good.
Before the economy gets going again, we may have to open 'camps' where people live in dorms and eat in common cafeterias.