On Economic Trends: The Disappearing Labor Market

We really don’t have a good economic model for what’s happening now. I’ve got my own, but I doubt that I have all the facts. I’ve taken some of the things that Krugman has written about and some that Stiglitz has written (actually Stiglitz quoted ME once; I had published a paper dealing with economics on the International Mensa Forums two years ago), and there are a couple of other economists. But there’s no real consensus.
I’ve come to believe that the root problem is capitalism itself. Let me defend that before you scream too loudly.
Capitalism seeks ever higher profits, ever greater efficiency. That’s what the ‘market’ requires. If efficiency lags, then the capital flows elsewhere; Krugman would agree with this, I think.
What this really means is that human labor is first depressed in value by exporting of jobs, then by the ultimate export, having the jobs done by machine. Even China, home of cheap labor for a generation, is now mechanizing factories.
This puts people out of work. Where do they go?
Historically, when the Industrial Revolution began, they left the land and took jobs in industry, manufacturing goods. When mechanization hit the remaining farms (in the US, as an example), farmworkers left the land and moved to cities and worked in industry again.
But now the industrial jobs are rapidly disappearing. There are service jobs, but they pay little, in most cases not enough to live an independent life.
The few jobs left in manufacturing are increasingly high-tech, many of them involving computer control or robot maintenance and engineering. Not for the uneducated, in other words.
Even construction, long a place for unskilled labor, is changing. Where once half-a-dozen men with shovels and rakes and tampers filled potholes, now three men in a machine do ten times more potholes and do them better.
Force all those former employees to find work in domestic service-industry jobs and all you do is depress labor prices even more.
What to do with our excess labor? I’ve said that it can only be employed in making items for trade, and that will work for a time. What isn’t made for the domestic market can be made for the export market.  But the trend is clear: humans are being forced out of the labor market.  That’s the real economic problem.
And we don’t have any place left for them to go and nothing for them to do.  And no idea among politicians or even economists that this is the early stage of a trend that will only get worse.
There’s a real shortage not of managerial talent or clerical support; that group is overstaffed. The shortage is in engineers and scientists and technologists who can work with the engineers to build their designs. There are jobs for such right now…but colleges aren’t graduating enough of them. Instead, they concentrate on things that may make the student feel good, but without requiring the sheer work that a degree in math or science or engineering entails. Ethnic studies? Even education as a major? Not much work required. As an example, note that many education majors take classes that are deliberately dumbed down; math for education majors, science for education majors, etc. Education departments encourage this; it requires a Dean’s approval to count a MAJOR course toward a degree or teaching field instead of the ‘for education majors’ courses. I know…I did that. I took the full-on biology, physics, and geology courses. I didn’t go beyond second-year physics classes, essentially still elementary level but different, astronomy instead of physics II. At that point the math requirements would have meant dropping other things, biology or geology. And the GI Bill wouldn’t have paid for classes that weren’t required for me to graduate within 4 years, so I went with the broad education approach rather than the concentrated approach that would have led to a physics or math minor.
So economists and universities and politicians aren’t really addressing the trend. Industry is taking the first steps to do this; they’re offering training courses to prep people for unfilled jobs.  This isn’t yet widespread, but I suspect it will grow.  Meantime, some foreign specialists are immigrating to take the jobs that Americans aren’t qualified to do because of lack of education.  China and India and even Japan and Korea are providing the MD’s and the engineers and scientists that our universities aren’t providing.  And, since those divisions are expensive, universities continue to emphasize ethnic studies and gender studies and social studies…cheaper; more grads.
Comments?

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