Elevated unemployment will always be with us now.

Discussion in 'Economics' started by noob_trad3r, Jul 6, 2012.

  1. 14.8% is our U6 unemployment. I do not see us going back to 1999-2000 levels.

    Our economy has structurally changed in the 21st century and we have a surplus of humans with no place to employ.

    Automation of jobs and offshoring of others is here to stay.

    The only way out is something equivalent to a brushfire that culls the excess growth/supply of people.

    Something like
    #1 A grand war that involves a draft in the US and many lives lost. (i.e. WW II)

    #2 Something like a black plague or 1918 spanish flu.

    The US will probably need to enact a one child policy like in china as well.
  2. Break down that unemployment number and you will find the segments of society that really shouldn't be having any children, much less one or more. There are other segments that should probably have more children, too.

    But, yes, automation of things that used to require human labor will continue to be the biggest displacer of workers there is.
  3. d08


    Just retrain the assembly workers as robotics engineers.

    In reality though, it's looking bleak for the west.
    China has it pretty much right though, as opposed to the western countries who favor the breeding of low intelligence "consumers" to prop up the economies - this will definitely come back to bite when these same masses won't have enough funds to do the only thing they know - consume.
    You're already seeing it in Spain, Greece. Zero entrepreneurialism as people are just cozy collecting the government check and going to the occasional job interview, in the meantime spending their days at cafeterias with friends.
  4. I think we are due a virus and the poor living conditions will bring it on.
  5. and to think the catholic church is against birth control of any kind. the planet does not need any more people.
  6. achilles28


    The "too few jobs/cull people" meme is wrong, and based on a general ignorance towards the mechanisms of economic growth. Where does economic growth comes from? Productivity. How do Governments encourage production? Land, labor and capital? NO.

    Land, labor and capital never get together to begin with unless entrepreneurs - the job creators - are assured a generous return on their investment. In other words, they must be guaranteed to reap what they sow. Put another way, the Government must ensure individuals keep a good portion of what they earn/invest/create. Otherwise, much fewer of those entrepreneurs will earn, invest and create = job/wealth destruction.

    What are the various ways Government acts to confiscate capital?

    1) Excessive taxation
    2) Excessive regulation
    3) Expropriation
    4) Currency devaluation
    5) Corruption in courts, the legal system and regulators.

    Each of the above act like a tax, which increases business operating cost and therefore profitability. In America, taxes and regulation are huge, dollar weakness is accelerating, and the legal system and regulatory environment is rife with corruption. This environment acts as a gigantic headwind to business start-ups > innovation > declining prices (wealth creation) and therefore > employment. The current environment acts as a massive overhead cost the new entrepreneur must bear - both in known costs (taxation, regulation) and unknown costs (currency devaluation and out of control litigation/bought off regulators). The net result is far fewer entrepreneurs create new business because they ROI needed to justify the venture, isn't there, and unknown risks - mainly regulatory - are simply too high.

    What is the solution? For America, it's simple:

    1) Cut personal, corporate, capital gains and dividend taxes dramatically.
    2) Downsize the Federal, State and Local Governments, dramatically.
    3) Deregulate across the board and eliminate most regulatory mandates.
    4) Repeg the dollar to gold, or re-institute strong dollar policies.

    To summarize, the number#1 reason why most advanced countries aren't growing (besides offshoring, which indeed is a major problem, and could be easily fixed through the reintroduction of tariffs), is bloated Government, taxes and regulators that act as a deadweight to investment and growth.
  7. While I don't doubt that a lot of what you said would help, the issue of automation creating "demand destruction" vis-a-vis human labor is actually a bigger issue than government, in some respects.

    Even if investment and growth-oriented policies were embraced by governments in the West, the investments would be in capital, not labor. A significant number of human beings are simply priced out of the labor market at this point. And, increasing investment in labor automation, due to the nature of the virtuous cycle of productivity improvements in automation technologies as computing power grows, would only exacerbate the issue.
  8. clacy


    Ya, it's the Catholics fault...... lol

    Besides Latin America, Catholic birth rates are not what is adding to the world population.

    Growth in Africa, Asia and the Middle East is where the babies are coming from.
  9. achilles28


    That's what they said when Ford invented the car, Bell the telephone, Thomas Edison electricity, and HP the personal computer. All of those revolutionary technologies made workers obsolete in one industry, but fueled growth in the emerging tech industry, along with unrelated sectors...

    Again, not to be rude, your argument is based on a general ignorance of how wealth is created and how innovation in one industry, leads to cost savings, and industrial expansion in other sectors. Take for the example the invention of the Model-T. It was slated to destroy the horse and buggy industry, which involved breeders, keepers, blacksmiths, leather tanners etc. Countless jobs would be lost!! And they were. Except the manufacturing of vehicles absorbed much of those displaced workers, and the cost savings derived from use of motor vehicles and the revolutionary impacts it had on transport, drove down the costs of physical consumables in all sectors, and allowed for greater economies of scale in the production of other goods. This meant consumers could buy more per dollar in their pocket, which they did, on other industries, like clothing, travel, food, housing. And then those industries experienced a subsequent boom which net-net, employed far more people than the horse and buggy industry ever did! That's how it works, in a nutshell.

    Now take your example about automation. Robotics will displace a big chunk of workers, increasingly so, in industry. True. On the flipside, an entirely new field in design, engineering, IT and fabrication will emerge. And full-scale industrial automation (along with competition) will drive down production costs to an extremely cheap level. The price level, like it did upon the emergence of electricity, the car, the steam engine, computer, will decline, markedly. The net result is consumer wages buy far more stuff than they did before, which is spent on more manufactured products, food, clothing, shelter, travel, education, healthcare etc, which drives expansion in those sectors, and net-net employment goes up. And producers/manufactures sell more stuff at a similar margin (due to the reduction in manufacturing costs) = higher profits!!! This is how wealth is created...

    The next thing you'll say is - what about a Terminator scenario where AI robots can do virtually all tasks for human beings, and there's no jobs left for us? That's the point. Humans don't work for works sake. We don't work so we can have a job to do. We work so we can buy things in exchange for our labor. In the T2 scenario, the machines could produce everything humans need, so there wouldn't be any need for us to work, to begin with! That means paradise. Nobody has to work > nobody has to be compensated for work > most everything is free, or cost pennies.... The real problem with that scenario is not so much that humans dont have jobs. It's political. Government and Corporations won't want to share the wealth. If humans have everything we need, there's no real method to control the people, and most people, would get real interested in politics, since they've got nothing else to do, which represents competition for the power elite at the top, who enjoy ruling over us.
  10. Yes, if Obama would just pass tax cuts today, why, it would:

    - snow in NYC tomorrow
    - allow nonwhites to attend that whites only Christian gathering in Alabama of which crosses are to be burned
    - tells us whether Cobb got the kick back up to reality or is he still in limbo
    - a new superhero is born rather Hollywood remaking the same crap

    #10     Jul 6, 2012