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It's the economy, stupid


JohnSnowsHair
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I generally do not agree with Krugman, but this is a good article: https://www.nytimes.com/2021/04/15/opinion/andrew-yang-automation.html

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Yang’s claim to fame is his argument that we’re facing social and economic crises because rapid automation is destroying good jobs and that the solution is universal basic income — a monthly check of $1,000 to every American adult. Many people find that argument persuasive, and one can imagine a world in which both Yang’s diagnosis and his prescription would be right.

But that’s not the world we’re living in now, and there’s little indication that it’s where we’re going any time soon.

Let’s do a fact check: Are we actually experiencing rapid automation — that is, a rapid reduction in the number of workers it takes to produce a given amount of stuff? That would imply a rapid rise in the amount of stuff produced by each worker still employed — that is, rapidly rising productivity.

But that’s not what we’re seeing. In fact, the lead article in the current issue of the Monthly Labor Review, published by the Bureau of Labor Statistics, is an attempt to understand the productivity slowdown — the historically low growth in productivity since 2005. This slowdown has been especially pronounced in manufacturing, which has seen hardly any productivity rise over the past decade.

...

For what it’s worth, my guess is that Yang started preaching the dangers of automation without ever having looked at economic data; it was a story too good to check.

But even if we don’t think Yang is right about the problem, what about his solution? Is his universal basic income proposal a good idea?

No, it isn’t. It’s both too expensive to be sustainable without a very large tax increase and inadequate for Americans who really need help. I’ve done the math.

First, we really would be talking about a lot of money. The recently enacted American Rescue Plan gave most adults a one-time $1,400 payment, at a cost of $411 billion. These payments make some sense given the lingering economic effects of the pandemic, although other components of the plan, especially enhanced unemployment benefits, are playing a more crucial role in limiting financial misery.

But the Yang proposal to pay $12,000 a year would cost more than eight times as much every year — well over $3 trillion a year, in perpetuity. Even if you aren’t much worried about either debt or inflationary overheating right now (which I’m not), you have to think that sustained spending at that rate would both cause problems and conflict with other priorities, from infrastructure to child care.

 

I would go beyond his disagreement with Yang on productivity here and simply look at the job market. If automation was displacing workers at worrisome rates, both unemployment and labor participation rates would be dropping off. 

COVID aside, unemployment has has been historically low for much of the past decade. Labor participation peaked in the 90s at 67% or so, but had been below 60% in the 1950s and 1960s and pre-COVID was edging towards 64%. So one could look at labor participation, but there are a lot of reasons beyond automation I'd look to in order to explain reduction of labor force participation since 2000.

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18 minutes ago, JohnSnowsHair said:

I generally do not agree with Krugman, but this is a good article: https://www.nytimes.com/2021/04/15/opinion/andrew-yang-automation.html

 

I would go beyond his disagreement with Yang on productivity here and simply look at the job market. If automation was displacing workers at worrisome rates, both unemployment and labor participation rates would be dropping off. 

 

The problem is automation pushing people into low-wage work. It hasn't been enough yet to drop people out of the labor market en masse, but it has been enough to impoverish them, this and outsourcing combined, at least.

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41 minutes ago, JohnSnowsHair said:

I generally do not agree with Krugman, but this is a good article: https://www.nytimes.com/2021/04/15/opinion/andrew-yang-automation.html

 

I would go beyond his disagreement with Yang on productivity here and simply look at the job market. If automation was displacing workers at worrisome rates, both unemployment and labor participation rates would be dropping off. 

COVID aside, unemployment has has been historically low for much of the past decade. Labor participation peaked in the 90s at 67% or so, but had been below 60% in the 1950s and 1960s and pre-COVID was edging towards 64%. So one could look at labor participation, but there are a lot of reasons beyond automation I'd look to in order to explain reduction of labor force participation since 2000.

Good luck trying to explain any of this to the modern day Luddites who won't wear masks because of muh freedomz while frothing at the mouth about robots and illegals taking their jobs. Because, ya know, blaming others comes easier than learning how to weld or run romex cable.

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1 hour ago, EaglesRocker97 said:

The problem is automation pushing people into low-wage work. It hasn't been enough yet to drop people out of the labor market en masse, but it has been enough to impoverish them, this and outsourcing combined, at least.

More women are working today than previously.

There have definitely been regions of the nation where the job market has hollowed out. You could probably say the same about almost any economy in transition. Areas most dependent on laboring on farms and in factories have seen jobs for 20-49 year old men dry up without a sufficient number of service-sector jobs to replace them.

People need to migrate to where the jobs are. There are plenty of red states with large-ish metro areas where service sector jobs are available to replace low-skill labor jobs. If they're not capable of becoming high earners in a knowledge sector, there are jobs with decent wages to be found elsewhere. 

Plumbers, construction, hell even landscaping. When the upper middle class starts getting fat they start looking for places to spend their money. 

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12 minutes ago, JohnSnowsHair said:

People need to migrate to where the jobs are. There are plenty of red states with large-ish metro areas where service sector jobs are available to replace low-skill labor jobs.

But those service-sector jobs don't provide near the level of economic security that low-skilled manufacturing jobs did.

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3 minutes ago, EaglesRocker97 said:

But those service-sector jobs don't provide near the level of economic security that low-skilled manufacturing jobs did.

You ever think that those low skilled manufacturing jobs payed so well because the parents of the people that worked them literally killed their global economic competition?

The boomers had it on a level no one will have for centuries, but people don’t want to swallow that pill. 

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Just now, Bill said:

You ever think that those low skilled manufacturing jobs payed so well because the parents of the people that worked them literally killed their global economic competition?

 

Well, duh.

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This is why innovation is important. We need to build a new-age economy with new products, technologies, and services that can replace the jobs that went overseas.

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2 minutes ago, EaglesRocker97 said:

This is why innovation is important. We need to build a new-age economy with new products and services that can replace the jobs that went overseas.

Our economy allows among the most creative destruction of any western nation. We have millions of people engaged in jobs whose entire industry was created in the last generation.

This IS the new-age economy.

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35 minutes ago, JohnSnowsHair said:

Our economy allows among the most creative destruction of any western nation. We have millions of people engaged in jobs whose entire industry was created in the last generation.

This IS the new-age economy.


Compared to a lot of other industrialized nations, we're lagging. This is where we could help the situation by investing in things like green energy and 21st-century transportation networks. (I know, the people hear don't want to hear it).


I find it funny when people bring up the postwar economy to me, as if a guy who eats, sleeps, and breathes U.S. history doesn't understand the sources of postwar hegemony. I get that, and I don't think we're going back to that, but there must be a better path forward. We are stagnating.

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Since at least the disintegration of European guilds in the Early Modern period, the world has constantly grappled with the threat of social upheaval brought on by the loss of status and skill by those who formerly held advanced positions, as well as overpopulation, leading to the proliferation of 'footloose, idle masses' with no land or gainful employment to satisfy their basic physical and psychological needs. Innovation and invention ultimately has always provided the antidote to keep the "rabble" at bay, but in a post-colonial, post-modern world, we can't go back to the old methods of land acquisition and warfare to keep people occupied. We can't go looking for old jobs in new places anymore; we're going to have to create new ones.

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38 minutes ago, EaglesRocker97 said:


Compared to a lot of other industrialized nations, we're lagging. This is where we could help the situation by investing in things like green energy and 21st-century transportation networks. (I know, the people hear don't want to hear it).


I find it funny when people bring up the postwar economy to me, as if a guy who eats, sleeps, and breathes U.S. history doesn't understand the sources of postwar hegemony. I get that, and I don't think we're going back to that, but there must be a better path forward. We are stagnating.

Where? Green energy does not equate to innovation and creative destruction. Most western nations, especially in Europe, have protectionist domestic policies relative to the US. 

Yes, they have better public transportation and in some cases heavier state investment in green technology. But that's not the sum total of innovation; it's not even a LARGE factor.

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1 minute ago, JohnSnowsHair said:

Where? Green energy does not equate to innovation and creative destruction. Most western nations, especially in Europe, have protectionist domestic policies relative to the US.

Green energy has already been innovated, but revamping our energy sector would create new jobs and a new class of skilled and semi-skilled workers in the administrative, technical, and service roles associated with them. The expansion of the grid would create demand for manufacturing and delivering the raw materials and products needed to develop them, and the development of more efficient processes would provide avenues for R&D. High-speed rail would likewise create demand for engineering and construction, in addition to conductors, maintenance crews, financial managers, and bureaucratic institutions to manage its various sectors. We already have enough new technology to create millions of new jobs by simply applying it to the vast expanse of land that we have.

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2 hours ago, EaglesRocker97 said:

But those service-sector jobs don't provide near the level of economic security that low-skilled manufacturing jobs did.

economic security is a luxury. of course unskilled labor will be devalued over time.

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1 hour ago, Bill said:

You ever think that those low skilled manufacturing jobs payed so well because the parents of the people that worked them literally killed their global economic competition?

The boomers had it on a level no one will have for centuries, but people don’t want to swallow that pill. 

they took the greatest war bounty the planet has ever seen and ished all over it...

that era is the historical outlier, not a norm we can recreate

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5 hours ago, JohnSnowsHair said:

the historically low growth in productivity since 2005.

I blame Gen X. They would be 25-40 in 2005. Lazy bastiids 

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10 hours ago, 20dawk4life said:

I blame Gen X. They would be 25-40 in 2005. Lazy bastiids 

:angry:

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People don't care about the US economy. They care about cheaper flat screens. They care about having the newest phone or a pair of boots, or whatever else is trending.

They don't want to work for a living. They've never had to. Their parents gave them everything. Their parents made it comfortable to live at home without every having to contribute. They want to go to college on somebody else's dime, party their way through and get an amazing, high paying job.

They've never been asked to be responsible, to pull their weight or even clean up after themselves.

Watching my industry, IT (network, security) it is filled with incompetent morons who have no business being in IT. They don't know their job, they don't own a problem, they don't want to work and the work they do is flawed. Recently had to be part of letting a 10 year network engineer go; a Cisco certified expert with a string of certifications who had absolutely zero experience with Cisco CLI commands. I don't know how you can be in networking for that long and not picked up some of them. For that matter, how do you pass tests and finish with no skills? In a week, given the job of identifying all the equipment and ports used in a particular route, he couldn't get past the first two devices in the mix. He had no idea how to find out, despite being on an Internet connected computer.

The turnover is ridiculous because the people are morons with no work ethic. The go through school and learn nothing. They have years of on the job experience and no skills. One of our clients recently lost their server admin - he got a job for a security company. Turns out, he failed to even patch Windows servers in his year there. The AV rollout was less than 2/3rds done on the server farm of 40 servers - after 6 months. An entry level help desk guy with certification from a popular IT school was setting static IP addresses on wireless adapters in laptops.

It goes on an on. These days I am always astounded when I find a tech that not only knows their job, but takes an active interest in solving problems and sticking through to completion.

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3 hours ago, JohnSnowsHair said:

:angry:

Don’t get mad at me because gen x is lazy and we’re still feeling the results of how lazy they truly are. 

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Blaming boomers, Xers, rise in automation, etc. For what? What is the problem?

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2 hours ago, DrPhilly said:

Blaming boomers, Xers, rise in automation, etc. For what? What is the problem?

The problem is people want what they aren't capable or willing to earn. It's really that simple.

You want globalization? Open societies? Get ready to compete with the world. It's a lot of competition, and labor prices are going to collapse under the the pressure.

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21 hours ago, JohnSnowsHair said:

More women are working today than previously.

There have definitely been regions of the nation where the job market has hollowed out. You could probably say the same about almost any economy in transition. Areas most dependent on laboring on farms and in factories have seen jobs for 20-49 year old men dry up without a sufficient number of service-sector jobs to replace them.

People need to migrate to where the jobs are. There are plenty of red states with large-ish metro areas where service sector jobs are available to replace low-skill labor jobs. If they're not capable of becoming high earners in a knowledge sector, there are jobs with decent wages to be found elsewhere. 

Plumbers, construction, hell even landscaping. When the upper middle class starts getting fat they start looking for places to spend their money. 

Yes. Except "people” are afraid of a hard days work...

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31 minutes ago, SNOORDA said:

Yes. Except "people” are afraid of a hard days work...

Not the people I know or work with. 

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Pretty much every generation thinks the ones that come behind it are lazy and entitled. It's a rite of passage.

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6 hours ago, DrPhilly said:

Blaming boomers, Xers, rise in automation, etc. For what? What is the problem?

Lazy people in the way of hard working millennials 

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