Saturday, January 1, 2011

Growing unemployment from tecnology

One of my main fascinations at the current time is the rising unemployment across most of the developed nations.  My contention for years has been that automation is the primary driver.  At some point technology begins replacing jobs faster than the same technology creates new opportunity for people.

If you look at many of the big jobs of the post war era, jobs that could support families, ones like auto workers, steel workers, port workers, rail and electrical workers, most of these fields have seen a huge reduction in the number of workers needed.

Today steel needs less than 1/5th the workers that it needed in the 1960's to produce 1 tonne of steel.  So you get the strange situation of old steel towns which appear as ghost towns, and the assumption is that the mill has shut down.  But in actuality the mill is still operational and producing the same output as it was 50 years ago.

In addition to physical automation there has been vast automation for white colar workers.  Even in the 1980's there was armies of clerks at all the major corporations who were managing information.  Filling out invoices, filling out forms, getting signatures, filing copies, keeping track of accounts and so on.  This is why every morning tens of millions of people travelled from their homes into city centers and worked in office buildings.  Each worker working in a cubicle, with hundreds of other cubicle drones on his floor, and a building tens of stories high.

But today most of the information is handled electronically with computers effortlessly updating accounts, and effortlessly filing the information.  So you have a few people working in a server farm out in suburbia.  This is a big reason why the downtown centers of cities have hollowed out. 

In some of my coming posts I will look into what it means for our society and economy with tens of millions of these middle class jobs permanently disappearing.  That is something to realize, these jobs are never coming back.  For decades after farm automation took over during the 1930's, politicians tried to revive the 'farm economy'.  But they never were able to get the rural economy going, they were not even able to stop the loss of jobs from continuing in the farm sector. 

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