More Jobs, Less Work, Low Wages, Dark Future: Part 2

We looked at a paradox yesterday: While unemployment rose, average working hours fell, incomes stagnated, savings increased, and debt was repaid, Americans kept their wallets open and spent a decent amount of money. Those don't add up. What gives?

These are complicated topics where no single answer tells the whole story. You can probably think of a dozen explanations for the paradox. But to me, this one is the most fascinating:

Source: Federal Reserve, author's calculation.

Some background here. Transfer payments are income people receive from state, local, and federal governments -- things like Social Security checks, unemployment benefits, food stamps, welfare, and so on.

This chart is simple. It's the percentage difference between what people bring home, and what they bring home minus government transfer payments. The higher the line is, the more we're reliant on the government, and vice versa.

And it's pretty clear: We've been more reliant on transfer payments over the past four years than ever before. That helps explain why Americans found enough money to keep spending while income from work declined; Uncle Sam made up a lot of the difference.

These aren't small numbers, either. In 2004, the difference between real income and real income without transfer payments was 16.5%, or $1.4 trillion. Today it's 21.5%, or more than $2 trillion. That difference -- $600 billion a year -- works out to around $2,000 per American, per year. From 2000 to 2009, the amount governments spent on benefit programs increased 69% after inflation.

According to an in-depth report by New York Times reporter Binyamin Appelbaum, nearly half of Americans lived in a household that received direct government benefits in 2010. That's up from 37.7% in 1998. Another example of the growing safety net:

When the earned-income credit was introduced in 1975, eligibility was limited to households making the current equivalent of up to $26,997. In 2010, it was available to families making up to $49,317. The maximum payout, meanwhile, quadrupled on an inflation-adjusted basis.

As unemployment rose during the recession, spending on unemployment benefits increased as well. According to Federal Reserve data, around $30 billion was spent on unemployment insurance in 2007, before the recession began. It shot up to $145 billion in 2010, and still runs close to $100 billion a year today.

Part of the rise in transfer payments is due to simple demographics. As the baby boom generation ages, those eligible for Social Security and Medicare rises. Fifty-six million Americans now receive Social Security benefits. That's 10 million more than did in 2002. Between 2000 and 2020, the number of Americans age 55-64 will have grown 73%. Most will be eligible (or very soon be eligible) for Social Security and Medicare.

Virtually none of these increases were financed through higher current taxes on more productive workers. Adjusted for inflation, federal tax revenue in 2011 was 9.8% lower than it was a decade before. Taxes as a percentage of GDP hit the lowest level in the last half-century in 2010, and average effective tax rates are near the lowest they've been since the IRS began keeping track.

Those are the numbers, and they help explain why consumer spending held up while the wages generated from jobs did not. What should you make of them? I'd keep two things in mind.

One, being reliant on transfer payments means the economy is susceptible to decline when it comes to austerity. There's a fierce debate right now over when and how to curb the budget deficit. Someday, somehow, the deficit will need to shrink dramatically -- that much is clear. But too often lost in the debate is that what one person views as wasteful spending is another person's income, and that income can be key to supporting the economy, especially in the wake of a deep recession. Austerity and deficit-reduction don't occur in a vacuum. Europe is learning this the hard way right now.

A second related point: The fact that such a massive amount of government money is spent on transfer payments shows why deficit reduction is so difficult in the first place. News flash: most people like getting checks in the mail, and they're loath to give them up. There's disagreement over deficits and debt, but the majority of government spending is on programs that are popular and defended by both major political ideologies. And the more reliant we are on transfer payments, the harder it is to wean off of them. "Even critics of safety net increasingly depend on it," Appelbaum wrote.

He then asked a small-business owner and self-described opponent of government largess named Ki if he could imagine retiring without Social Security or Medicare. "I don't think so," Ki said. "No. I don't know. Not the way we expect to live as Americans." And there's the problem.

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Follow him on Twitter @TMFHousel. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (46) | Recommend This Article (54)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 26, 2012, at 4:10 PM, davaidesign wrote:

    Bravo, Sir! Among all the "What will move the Dow today" and "How to play X earnings" garbage increasingly littering MF you can still find a gem like this.

  • Report this Comment On April 26, 2012, at 4:21 PM, stevedahnke wrote:

    Cue the attacks on "socialist spending" from folks that didn't really read this article.... 8)

  • Report this Comment On April 26, 2012, at 4:48 PM, JimmyZangwow wrote:

    So, when comes the tipping point? Do we go through a readjustment like 1929-1933, eeking our way to a value equilibrium with all the pain that goes along with it?

    Is it a virtual certainty if transfer payments increase as a portion of peoples' income?

    Thanks for the article.

  • Report this Comment On April 26, 2012, at 5:41 PM, DJDynamicNC wrote:

    "Taxes as a percentage of GDP hit the lowest level in the last half-century in 2010, and average effective tax rates are near the lowest they've been since the IRS began keeping track."

    I just wanted to highlight that before the inevitable onslaught of complaints about welfare states and safety nets and "indolent children" and so on.

  • Report this Comment On April 26, 2012, at 5:43 PM, DJDynamicNC wrote:

    It's a bunch of extra work, but if you've the time and ambition, Morgan, I would be very interested in seeing a similar graph for the major European countries and the Eurozone as whole, for comparative purposes.

  • Report this Comment On April 26, 2012, at 5:43 PM, Darwood11 wrote:

    Good article.

    "Austerity and deficit-reduction don't occur in a vacuum." Absolutely.

  • Report this Comment On April 26, 2012, at 6:15 PM, ynotc wrote:

    I am not counting that Social Security will be around when I retire. This is one of the reasons I read The Fool.

    The real problem it that people want to rely on others. What happened to self reliance?

  • Report this Comment On April 26, 2012, at 6:30 PM, ybnvsfool wrote:

    "Taxes as a percentage of GDP hit the lowest level in the last half-century in 2010, and average effective tax rates are near the lowest they've been since the IRS began keeping track."

    ---Only because the unemployment rate is so high, social insurance, retirements receipts and excise taxes are at all time lows. Add that to the anti- business high regulation environment and guess what - Tax revenues as a percentage of GDP falls.

    The only thing that would be worse for our economy would be for taxes as a percentage of GDP to be at an all time high! Because that would mean that real GDP has contracted even more. Add that to a stealth tax of QE1, QE2...QEx (print more money - making every dollar we have worth less), and you could really put the good ole USA in its place.

    I really feel sorry for those on fixed incomes and our youth with this type of economic policy.

  • Report this Comment On April 26, 2012, at 6:40 PM, bean1999 wrote:

    When I was young oh so many years ago, I was taught that, because I was not a trust fund baby or born with a silver spoon, I would need to make my own way. I needed to get an education and paddle my own canoe in this world. However I was also taught that when it came time to retire I would need a three legged stool of social security, company pension, and personal savings.

    Over the past decades, corporations have played fast and loose with promised pensions so that many of them have become government wards as well.

    I have been doing my part by building the savings leg of my retirement stool but it will not be enough to live on all by itself unless I manage to purchase the next Apple or Google at $5. Fool on!

  • Report this Comment On April 26, 2012, at 6:47 PM, xetn wrote:

    So, first, the government convinced everyone that they "deserved" government entitlements, and now, everyone believes they can't live without them.

    This is one of the areas where China is killing the US job market. China has no entitlements, no minimum wage, and no unemployment compensation. There is nothing like ObamaCare either. Either you work, or you starve. There are people selling stuff on the sidewalks for extra income or just income. They are doing this without a license and when the police show up, they disappear only to re-appear in another area.

    The Chinese, from what I have observed, are very entrepreneurial, and very committed to self employment. China is also almost a total cash society. Many do not have bank account, almost none have credit cards and many purchase everything without any credit, including cars.

  • Report this Comment On April 26, 2012, at 6:53 PM, ybnvsfool wrote:

    Ever thought of how much your FICA donations would have been worth had the government not already spent them? Better yet, what if you could have invested that money in Treasuries, CD's or some other safe investment? Mine would have been worth about 7 times what the government is going to give me or perhaps not give me.

    So tell me, what about the fast and loose promissed pension of the government? Was it worth it.

    The only solution is for you to do for you and yours. The government can not and should not be depended upon for your hapiness. But he government should not get in the way of it either.

  • Report this Comment On April 26, 2012, at 8:12 PM, JGBFool wrote:

    It's clearly the fault of the parents of the Baby Boomers. If they had not been so prolific, then there wouldn't be so many people receiving Social Security and Medicare right now.

    Repealing Medicare Part D could save the country (or at least delay it's financial doom), but doing so would also cause a bunch of career politicians to lose their jobs. Unfortunately, most career politicians realize they aren't qualified for life in the private sector.

  • Report this Comment On April 26, 2012, at 8:16 PM, JGBFool wrote:

    xetn-- so the Chinese government ISN'T socialist?

  • Report this Comment On April 26, 2012, at 8:20 PM, CaptainWidget wrote:

    When you adjust for inflation, the absolutely highest amount of tax revenue ever was in 2008.

    http://www.truthfulpolitics.com/images/u-s-federal-governmen...

    Tax revenues are down because, surprise, the government is discouraging people from working and starting businesses after the worst recession in 50 years. But as a general trend, federal revenues are going inexorably up.

    Xetn nailed it. The government created a problem to which they profess to be the cure. People have been convinced they're incapable of surviving without the government. I find it offensive personally and sad that my fellow Americans would take the bait.

  • Report this Comment On April 26, 2012, at 9:07 PM, Estrogen wrote:

    The slow boiling of the frog, but the frog is the USA!

  • Report this Comment On April 26, 2012, at 11:31 PM, vidar712 wrote:

    When I read a previous article about how many jobs are being automated, I extrapolated that all jobs would one day be automated. This led to the conflict that without jobs no one would be able to buy the goods being produced. This would mean that we needed a different mechanism for redistributing currency. Some entity would need to send money to people, just for being alive. Or, in other words, Communism.

    Thanks to McCarthy, America is afraid of communism. But this article shows that the transition from Capitalism to Communism is already underway.

    Capitalism and Communism are though of as polar opposites. I love the irony that making Capitalism more efficient (through automation) appears to be leading towards Communism.

  • Report this Comment On April 27, 2012, at 12:14 AM, CaptainWidget wrote:

    <<When I read a previous article about how many jobs are being automated, I extrapolated that all jobs would one day be automated. This led to the conflict that without jobs no one would be able to buy the goods being produced. This would mean that we needed a different mechanism for redistributing currency. Some entity would need to send money to people, just for being alive. Or, in other words, Communism.>>

    Respectfully, how would you automate art? Or how would you automate customer service? How would one automate increases in productivity? By definition, automation cannot be self-bettering, or it would be defeat the purpose of replicate tasks (replication =/= improvement).

    All of these things need to be done by humans. Automating mundane tasks is desirable. It makes the necessities cheaper, and frees up people to do other more rigorous tasks which they would rather challenge themselves on. Automating in the current landscape is necessary. With raising minimum compensation for employees, it's simply economically unfeasible to have a person standing there to do the job. That drives innovation long run, but short run it sure as hell puts someone out of a job.

    I'd call a day where cheap/free robots do all your necessary daily tasks, giving you 16 free hours per day to chase your dreams "utopia". Of course that will never happen. But if we aspire to that day, the only way to make it happen is free market increases in productivity. The only way to equitably distribute resources through communism effectively destroys the incentives to pursue those advances in technology.

  • Report this Comment On April 27, 2012, at 12:24 AM, TerryHogan wrote:

    @ DJDynamicMC

    It's not the fact that taxes are low relative to GDP that is the problem. It's the fact that government spending relative to GDP is so high. I think you'll find that it is now the highest as a percentage of GDP that it's ever been barring WWII.

    What if all that money parked in treasuries were put to more productive use by private industry? Can you say "Crowding out?".

  • Report this Comment On April 27, 2012, at 1:15 AM, sliderw wrote:

    Do transfer payments include tax breaks for people and companies? I bet not. Still, each dollar of tax breaks increases the deficit as much as each dollar of transfer payments!

  • Report this Comment On April 27, 2012, at 1:22 AM, sliderw wrote:

    Republicans want to cut welfare for the poor. Democrats want to cut welfare for the rich. I say let's cut welfare for everyone -- rich, poor, and in between. If everyone shares the pain, the pain per capita is less. Just don't cut too much too quickly that it kills the economy!

  • Report this Comment On April 27, 2012, at 2:22 AM, kyleleeh wrote:

    I'm with CaptainWidget on this one, Automation decreases the need for unskilled labor but it increases the need for skilled labor. Ford and GM have fewer people screwing hubcaps on an assembly line these days, but the number of Engineers, programmers and IT technicians on their payroll is much larger then it was in the 50s.

  • Report this Comment On April 27, 2012, at 7:07 AM, rtichy wrote:

    @ xetn -

    There's a phrase you might have heard at the dinner table -- "There's people starving in China..."

    Working to not starve is not really an indicator of great work ethic, just survival instinct. Crime is a survival instinct at that level, too.

    Real socialism, like they have in China, (not the fake kind people blame democrats for) produces starving people, even if there are successful businesses built on top of them. (Like Foxconn.)

  • Report this Comment On April 27, 2012, at 7:22 AM, terroh8er wrote:

    Tax breaks are not even close to being equal to transfer payments in terms of the deficit. Social programs have created a class of hopelessly unproductive people who siphon money away from those who know how to grow the economy. Without these payments, the majority of them would be paying into the system rather than taking money away from it. The money needs to be re-invested by those who have shown they can earn it. The economy will grow and you'll get more revenue, if that's your thing. Looking at absolute dollar values will not tell you the whole story.

  • Report this Comment On April 27, 2012, at 8:33 AM, Gracpogue wrote:

    I think it's important to remember that many of those transfer payments are money that the recipients first gave to the government in the form of ss/medicare tax. It seems that lumping those types of payments in with food stamps and welfare is becoming the trend. My folks receive ss and medicare, but it's not a government handout, they paid into those programs their entire lives! I have to assume that all the money I've been paying into those programs is really just extra income taxes because I probably won't get any of it back. So that considered, I don't even want to try and figure out how much I've been paying in "taxes" all these years.

  • Report this Comment On April 27, 2012, at 9:06 AM, kspes wrote:

    The actual amount in corporate taxes that the government collects (“the effective tax rate”) is lower than those of Germany, Canada, Japan and China.

    http://www.thefiscaltimes.com/Articles/2011/02/09/10-Big-Cor...

  • Report this Comment On April 27, 2012, at 9:25 AM, kspes wrote:

    " I have to assume that all the money I've been paying into those programs is really just extra income taxes because I probably won't get any of it back."

    I remember saying the exact same thing 35 years ago. Yet here we are.

  • Report this Comment On April 27, 2012, at 10:45 AM, DJDynamicNC wrote:

    "The real problem it that people want to rely on others. What happened to self reliance? "

    What happened to community?

  • Report this Comment On April 27, 2012, at 10:58 AM, kspes wrote:

    Which is it you want? Self reliance or community?

  • Report this Comment On April 27, 2012, at 11:10 AM, DJDynamicNC wrote:

    "Either you work, or you starve"

    Do you think that people who CAN'T work should also starve?

    If so, well, that's awful, but at least you're being consistent.

    But I find that typically this argument - that people should be forced to work or else starve - is followed with exceptions. "Well, if you're handicapped, you shouldn't have to work." Things of that nature.

    The problem with that is that what you're doing is converting it from an economic argument to a moral argument, and then framing it in your own moral terms. People SHOULD starve UNLESS they measure up to whatever criteria you have decided makes them worthy of food, whether that be working, or being sufficiently disabled that they are graciously "allowed" to eat, or so on.

    But if that's the case, and it's a moral argument anyway, then you should know that we've already accepted that system anyway! Right now you have to work to live, unless you meet certain criteria that we as a nation have decided should give you the ability to eat; we just have more expansive boundaries for that moral delivery than you would like, so you argue for a reduction in those boundaries, whereas I argue for an expansion in them. But in both cases it's a moral argument, which is why we never agree no matter how many sound points either of us may land economically. You think of your argument as defending freedom, I think of mine as defending humanity, and both are completely subjective interpretations that then inform our economic positions. We can't agree on a path towards solutions because we don't agree on what counts as a problem.

  • Report this Comment On April 27, 2012, at 11:11 AM, DJDynamicNC wrote:

    "Unfortunately, most career politicians realize they aren't qualified for life in the private sector."

    Actually, most career politicians go on to make a killing in the private sector.

    Money is influence is money, and ever the cycle shall turn.

  • Report this Comment On April 27, 2012, at 11:15 AM, DJDynamicNC wrote:

    "What if all that money parked in treasuries were put to more productive use by private industry? Can you say "Crowding out?"."

    I could say crowding out, but is there any evidence that crowding out is actually occurring?

    The three biggest government expenditures are Medicare/Medicaid, Social Security, and Defense. Do you really think that 500$ checks to old people is crowding out business investment? Do you really think that Medicare spending is crowding out business investment, and if so, why is the health care sector expanding so rapidly? Do you really think that buying freedom bombs for Afghanistan is crowding out private investment?

    Meanwhile, Europe cuts and cuts and cuts. No crowding out there! How's it working?

    There is every evidence that the problem is a lack of aggregate demand due to deleveraging and almost no evidence of crowding out currently. That doesn't mean crowding out can't happen, and during a boom, expenditures should be cut to bring the deficit under control. But right now is most assuredly not a boom.

  • Report this Comment On April 27, 2012, at 11:28 AM, DJDynamicNC wrote:

    "I'd call a day where cheap/free robots do all your necessary daily tasks, giving you 16 free hours per day to chase your dreams "utopia"."

    You and I might call it utopia. Most people would call it "unemployment." How do you expect people to survive if all the mundane tasks are done by robots, while still living in a capitalist society? We are not all artists. The wealth generated by automation would accrue to those who own the means of production, as it always does, but they would no longer have to share any of it with their labour force. If you are counting on human good will, you are quite the optimist - I have great faith in human good will, but it is tempered with a recognition that history happened the way it did for a reason.

    Also, as a philosophical aside, I will point out that there's really nothing stopping art from being automated; most of it is done by machines under human direction now anyway. I'm a human chauvenist, but I recognize it for chauvenism. We are multi-function, cheaply produced biological computers.

    Two questions, then:

    1) Would you accept a gradual transition to communism as automation becomes more widespread and menial tasks become obsolete (and if so, what's your cut off for when to begin this transition)

    2) What is it about humanity that makes us uniquely qualified to create art as opposed to a computer (or, for that matter, another species)? would be very interested in your philosophical perspective here, I'm fascinated by this stuff. :lol:

    Also, apologies for once again dive-bombing the thread and responding to every post at once.

  • Report this Comment On April 27, 2012, at 11:59 AM, jrj90620 wrote:

    People worship big govt,look to govt as their savior, and try to get as much as they can from govt,while giving as little,in taxes,as they can.Results in govt deficits.All deficits show up in the value of the fiat currency.The greater the deficits,the faster the fiat declines and real money,gold appreciates.Got GOLD!

  • Report this Comment On April 27, 2012, at 12:03 PM, setht23 wrote:

    @DJDynamicNC

    "1) Would you accept a gradual transition to communism as automation becomes more widespread and menial tasks become obsolete (and if so, what's your cut off for when to begin this transition)"

    What I think will eventually occur as humanity simply has less work to do as more and more becomes automated is either: a steadily declining number of hours worked, or sharply increased taxes so those with jobs can support those who don't have them. I don't think Communism will occur as there is too much evidence that government is bad at business.

    An analogy that comes to mind is that of the Roman Empire where as more and more slaves were captured as Rome expanded it's borders more and more free persons didn't have jobs and lived off the dole. Maybe we'll get our very own robot Spartacus!

  • Report this Comment On April 27, 2012, at 12:03 PM, jrj90620 wrote:

    I would estimate,conservatively,that for every Dollar govt takes in,after overhead,fraud,inefficiency,etc.,they give back,to the economy,maybe .50.So,in my opinion,govt is a great wealth destroyer.The larger govt grows,as a % of the economy,the more wealth is destroyed,and the poorer a country becomes.Govt doesn't create wealth,they destroy it.We need to greatly downsize govt.

  • Report this Comment On April 27, 2012, at 12:05 PM, jrj90620 wrote:

    Maybe the answer is for everyone to own stock in companies.Then they would benefit,even if companies become more efficient and require less labor.

  • Report this Comment On April 27, 2012, at 2:01 PM, kspes wrote:

    How about 40 acres and a robot?

  • Report this Comment On April 27, 2012, at 5:04 PM, CaptainWidget wrote:

    <<You and I might call it utopia. Most people would call it "unemployment." How do you expect people to survive if all the mundane tasks are done by robots, while still living in a capitalist society? We are not all artists. The wealth generated by automation would accrue to those who own the means of production, as it always does, but they would no longer have to share any of it with their labour force. If you are counting on human good will, you are quite the optimist - I have great faith in human good will, but it is tempered with a recognition that history happened the way it did for a reason.>>

    I was careful to not JUST mention art. Customer service, the majority of the US economic activity, cannot be automated. By definition. A robot cannot fulfill your needs beyond an automated method.

    Progress CANNOT be automated. By definition. Automation is just repetition. Repeption is the antithesis of improvement. To improve automated processes, humans need to be involved.

    And art as well. Just because artists use automated means does not mean that automated means can make art. Photoshop has never once offered to take photos for me, nor selected the appropriate filters to make the photo look cool. That's not it's job.

    I think you've drunk the marxist kool-aid. Work will never be automated. Humans will always have desires above and beyond their current material posessions or level of productivity, and inside of that gap exists real, productive work. Once humans stop desiring, all work can be automated. Until that day (never) it'll be fine.

    But let's fulfill the thought argument. Say that robots COULD do all those jobs. They could automate everything, fix themselves, and increase productivity, consistently making their production better and cheaper. Who would that benefit the most? The consumer of course. The robot that your parents passed down to you would fix it's self, build new robots for you, and go to work for you, giving you all the money you would ever need. In this utopia, savings would be so high and costs would be so low, a few bucks saved by your parents parents would afford you all expenses for the rest of your life. This utopia would be afforded by savings and productivity, not spending and make-work jobs....

    Productivity is the goal, not "getting a job". More jobless people would do well to live that mantra.

  • Report this Comment On April 27, 2012, at 5:10 PM, CaptainWidget wrote:

    <<Two questions, then:

    1) Would you accept a gradual transition to communism as automation becomes more widespread and menial tasks become obsolete (and if so, what's your cut off for when to begin this transition)

    2) What is it about humanity that makes us uniquely qualified to create art as opposed to a computer (or, for that matter, another species)? would be very interested in your philosophical perspective here, I'm fascinated by this stuff. :lol:>>

    Oh, to answer your questions

    1) No. Why should the genius who invents a $100 robot that lasts 1000 years and can do every single tasks a human can do, but 10X faster, be forced to share his capital with the community? It's theft, plain and simple. And if this genius suspects that his invention and subsequent capital MAY be stolen from his by the community once he invents his robot, what is his incentive to ever build that robot?

    The only way to distribute capital "equitably" destroys the incentives to create that capital. Redistribution is the ultimate discouragement to productivity.

    2) Pragmatism. Find me a computer that creates art. There's no philosophical argument, it's just practical. Computers don't create art because computers don't create art. It's a self fulfilling statement.

    The crux of the argument wasn't about art though. I was careful to mention art first, and customer service and productivity last. Because those are the real biggies.

  • Report this Comment On April 27, 2012, at 5:37 PM, TMFBiggles wrote:

    @ CaptainWidget -

    I'm curious. Have you ever called support at a major corporation lately? Ever checked out at a grocery store? Customer service is becoming very automated.

    I would also take issue with your definition of what automation is. Automation is not "repetition." It's the augmentation or replacement of human labor with computerized / mechanized systems. Many jobs are highly repetitive and are open to automation, including customer service, which in many cases is little more than the application of a flowchart-based process. Do X after A, then check if Z is applicable, if not go to B and check Y... so on, so forth.

    Google "computer created art" without quotes. There are numerous examples of it, from Ray Kurzweil's programmed symphony way back in the day to modern stuff that is in many cases just as good (if not better) than the dreck most modern artists produce. Art can be created by algorithm, and has been on many occasions. Heck, modern blockbusters wouldn't be possible without the application of many computer-based graphical rendering systems. Seen a movie in the last 5 years? Computer art on the big screen.

    Productivity has historically been driven by the augmentation of human labor with more and technology. To say otherwise is to ignore the sweep of human history from the pyramids through the Industrial Revolution to the modern era. Replacing human exertion with mechanical or computational labor has been at the heart of productivity growth for many centuries. Without automation, machines, and computers you would be tilling fields or pouring cast iron into a massive vat or something, working for 16 hours a day 7 days a week until you got maimed or killed on the job. It's quite stunning to me that you're typing on a computer to a bunch of complete strangers from an air-conditioned (I hope) space and failing to recognize the critical role computers and automation play in enabling you to do so.

    I disagree with more or less the entire argument you presented, but these are just the biggest points I wanted to make.

  • Report this Comment On April 27, 2012, at 5:45 PM, DJDynamicNC wrote:

    Fair answers.

    I'd like to point out first your heavy use of "never" and "always." Be very careful when discussing things that you think can't ever possibly happen. They probably can.

    You follow this up by saying "show me a computer that creates are." Well, show me a computer that displays 3-D graphics that was made in the 1970s. You can't, because they didn't exist - then.

    Customer service is already being automated - you've never called your cable company and had to push 1 for English? For that matter, an operator is a customer service job - and one that's long since been automated. Not only can customer service be automated, it's not even very hard. I don't have any problem visualizing a world in which many, even most customer service jobs have been completely automated. Checkout cashier is customer service - and self-checkout lanes are becoming quite common. So I do not find your claim compelling, but am open to being convinced.

    You also say "once humans stop desiring, all work can be automated." I would say a more accurate phrase is "once humans stop desiring more than can be delivered by automation, then all work can be automated." You believe that that will never happen, and to be honest, I think you're right, but I think MOST humans will be perfectly satisfied by what automation can deliver, and quite soon.

    After all, aren't you the one always saying that if the government provides for people's basic needs they'll never do anything more for themselves? Why would it be any different if robots do the provision?

  • Report this Comment On April 27, 2012, at 6:44 PM, CaptainWidget wrote:

    The automated menu you use before you get to an operator is not customer service, it's just funneling you into the most efficient customer service agent for your particular needs.

    Checking yourself out isn't automated customer service. It's self service. I'm doing the job that used to be done by a $4 an hour kid. So they're essentially getting a quarters or so worth of free work out of me. But it's not as if a computer is now doing that job.

    And computers don't create blockbusters, 3D vector graphics, or anything of that nature. If you leave a computer to it's own devices, it'll sit there and do nothing. Humans create those things, using computers as tools. Saying that computers create art is no more consistent than saying that paintbrushes create art. They don't, human beings do.

    <<It's quite stunning to me that you're typing on a computer to a bunch of complete strangers from an air-conditioned (I hope) space and failing to recognize the critical role computers and automation play in enabling you to do so.>>

    False attribution. No where did I downplay the importance of advances in productivity, specifically computers. You invented that strawman to attack on your own. I specifically encouraged advances in productivity. I can find the quote for you if you like.

    I simply recognize and pointed out that, without humans, those productivity tools sit idle. We can now pick an orchard of apples with 1/100th of the amount of human labor as compared to 100 years ago. But if you don't have that 1% of human labor...the job doesn't get done. A CNC machine has reduced the amount of effort to create complex steel fittings by 1000 fold. But if it doesn't have a programmer, nothing gets created. The world runs on humans, not on automation. Period.

    <<After all, aren't you the one always saying that if the government provides for people's basic needs they'll never do anything more for themselves? Why would it be any different if robots do the provision?>>

    It wouldn't be. People are becoming softer by the year because life is getting so much easier thanks to productivity advances. In a world where robots did all your work for you, most people would be a pathetic waste of carbon.

    The big difference is with the goverment pampering you, they had to steal that money from someone else to put you in diapers. My robot nanny, at least in theory....in my hypothetical utopia......someone before me bought, paid for, and voluntarily passed down to me.

    And again, my point is not about the pragmatism of utopia. It's not realistic, ever. At the point in human existence where life is so easy no work needs to be done to maintain your daily necessities, humans will go find a new planet to colonize, a new mountain to climb, or a new depth of water to search. That's what people do. As a species, we're never going to sit around like milk cows chewing our cud and waiting for our new milking. Someone will find something new to do. And they'll need some help. And in that process, they'll use excess capital to create a few new jobs *end discussion*

  • Report this Comment On April 28, 2012, at 1:34 AM, kyleleeh wrote:

    I have to agree with Captain on this one again. TMFHousel has even pointed out in previous articles that most job creation doesn't come from small businesses but rather new businesses. People will always come up with something new that spurs demand for a new set of skills until it too gets automated or becomes obsolete and something news comes along again. Automation prevents complacency...and that's ultimately a good thing.

  • Report this Comment On April 29, 2012, at 8:41 AM, wjcoffman wrote:

    This is one of those articles, with comments, that consume way too much of my gray matter. Just tell me what investment is necessary to avoid being a victim of Government intervention in my future.

    Ahhahhhaaa!

    Anyway:

    (1) "Atlas Shrugged" by Ayn Rand

    (2) Where's my $2,000? I don't seem to qualify directly (based on [lack of] income) or indirectly (sell a product that those who get the $2K buy)?

  • Report this Comment On April 30, 2012, at 10:57 AM, kspes wrote:

    I can easily see proximity code readers in our future for each item we leave the store with. That would be automated.

  • Report this Comment On April 30, 2012, at 1:24 PM, seattle1115 wrote:

    @wjcoffman: "'Atlas Shrugged' by Ayn Rand"

    There are two novels that can change a bookish fourteen-year old's life: "The Lord of the Rings" and "Atlas Shrugged." One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1872500, ~/Articles/ArticleHandler.aspx, 11/28/2014 9:45:43 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement