Lots of productive professionals are probably willing to pay $8-10/hour to have their homes cleaned, meals cooked, and errands run. I certainly am.
The robots don't do that stuff yet. Yet there are millions of people who claim they can't find work. Something doesn't add up.
ie - The people we are talking about... you probably wouldn't hire.
Obviously there are some subsets that mostly work at this price level (cleaning, landscaping, etc.) but there's a reason personal assistants are expensive.
Which, I remind you, is a significant portion--probably the majority--of humanity. To make a world that I'd want to live in, you're going to have to find a place for them besides the glue factory.
Perhaps lower class Indians are simply superior to lower class Americans? Or perhaps the incentives are merely different?
Ignoring frictions, you expect that even the worst of those employed as live-in maids, cooks, or servants are probably comparable to the best of the 10% of Indians currently unemployed. And the burgeoning Indian middle class has collectively decided that those currently unemployed Indians are too expensive to employ as help (or anything else). So they don't get employed.
As labor becomes more and more capital reliant, management costs are going to increase. At some point those management costs will exceed the costs of substituting labor with capital. That labor will then be replaced with capital. And just as companies have to be effectively bribed to employ the mentally retarded today, there's a class growing ever larger whose cost of employment exceeds the amount of value they generate.
In contrast, there are plenty of jobs in the US that could be profitably done by a human at $9.25/hour - domestic services are just one example. This begs the question - why don't unemployed Americans fill these jobs like Indians do?
Finding somebody you would trust to have in your home is difficult. The paperwork involved for payroll and taxes can be complex and time consuming. Above all, domestic service just doesn't add enough value to make it worthwhile. I can drive my own car, cook my own meals and clean my own house, all without it seeming like an undue burden.
The situation is probably different for a family with two career-oriented parents and school-aged children. But it's unlikely that displaced factory workers have the skills and temperament necessary to take up work as an au pere.
Perhaps most importantly, it seems like a huge step backwards to re-establish a menial serving class.
You can also say the same thing about people from a lot of third-world or poorer countries: China, Mexico, small eastern europe countries, etc etc.
Hmm, maybe that is the case?
Dodging the issue of different cultures entirely, I could see such a situation arising if we assume that in the recent past India has been less of a meritocracy than America. Competent workers, therefore having less social mobility than their counterparts in the relatively more meritocratic country, would tend to stay in the lower class more frequently, seeding the lower class population with more competent workers. Meanwhile competent workers in the meritocracy would move upwards, draining the lower class of competent workers.
I have no idea if it is fair to say that India has been more or less of a meritocracy in the past than America.
Its the same problem as with lots of other jobs though. Clients want to hire people with experience, not just anyone. Cleaning services get most of the work, since they can often pay to replace belongings that might get broken or ruined.
You're not just discovering a new area of possible employment. The people who can afford to pay to have their houses cleaned, their errands run, their yardwork done, have long done so. If you aren't currently employing anyone and are bringing in a nice income, you're the exception.
Who exactly is unwilling to work as domestic help?
Pretty much anyone, at $10-12/hour.
People who can afford to pay $35-40/hour have their houses cleaned by a maid, but there is nothing special about this price point. If we have a lot of un-utilized labor who are willing to clean houses for less than $35/hour, prices should fall.
Since prices have not fallen, we must conclude that our unemployed are unwilling to clean houses except for high wages.
(Or possibly demand for domestic services is completely inelastic, but that's unlikely. I'd certainly have my house cleaned more often if it were cheaper, and I know many people who can't afford it at $35/hour but could at $10/hour.)
http://www.bloomberg.com/news/2011-04-28/mcdonald-s-hires-62...