Topic: Recession Imminent - page 6. (Read 11410 times)

Currently, many unemployeed are those young people just graduated from colleges.

I think "continous learning" even worsen the picture: Those who are in the job expand their automation technology to a higher and higher level through continous learning. Since they are learning all the time during their whole career, this just means no new employee can catch up with their speed and the knowledge gap between them will be larger and larger

I'm not saying that you have to be a technical/scientific/financial genius. How may people know math and are literate now compared to 100 years ago? How may people are working comparatively easier jobs now as retail clerks, using their math and reading skills, than 100 years ago, when most manufacturing jobs only required that you follow the same basic repetitive steps? Sure, we'll always have some people that either refuse to, or can't, learn or grasp anything complex, and we'll likely always need them to do things like janitorial, security, or even retail/fast food work, but you'd have to at least agree that most people out there can at least take a few college level classes to get SOME slightly advanced skills? Even high school level education is useful for things like data entry, transcribing/proofreading, basic accounting, etc (things machines can't yet do). Those jobs that require eyes, brains, and someone on location will likely never go away.

Not all people are born equal, only small amount of people will become highly skilled workers. Given a random example of 10,000 people, there will always be 100 of them much clever than others due to optimum growth of their brain when they are still in the belly of their mother

You can observe this very clearly in the IT industry: Almost every one can go to school and get a computer science degree, but only a few of them will really understand how a computer works and make their own computer system (like Gates/Jobs/Linus) etc... some of the other guys understand part of the whole picture, thus become an expert in a specific area, and many many other guys only understand the general knowledge, it's these many many other guys could not find a job

I'm not saying the product/service are oversupplied, it is the productivity is enough high but the demand is not evenly distributed

Robots can produce one yacht for each people in the world, but not everyone can afford it, simply because they do not have income since robots got their job. And a common sense is that if you do not have high productivity, then you do not have enough product to exchange for what you want.

I start to think this has something to do with the ownership of the productivity, those who owned robot get very high productivity, while those who don't get this ownership will have low productivity thus have to live a low standard life

The theory of oversupply is completely false. Its flawed because its based on the study of aggregates which hide what its really going on in the economy. There never has been in the economy a general excess of supply. What has happened is that there has been an oversupply of certain products (f.e. houses) and an undersupply of others. What do you think would have happened if all the resources, including human labour, that was dedicated to build houses everywhere would have been dedicated to produce something people actually wanted?

Its not oversupply, I dont understand how people can look around with so many poor people and conclude that we produce too much. Its a problem of not producing what people really wants.

It's not that there are no jobs, it's that there are more advanced jobs and fewer blue collar jobs. Unemployment rate for those with college education is actually pretty low, at 4.5% (personally, I don't know anyone of my friends in MD who lost a job, and know of two who quit theirs to find better ones)

http://www4.icmarc.org/for-individuals/market-view/chart-of-the-week/cotw-20110617usunemploymentbyeducationallevel.html

Even during the Great Depression, despite a HUGE unemployment rate, businesses were scrambling to find good employees and having trouble finding any. Machines replacing jobs just leaves more people with a lot more time to do more advanced and more creative things that require more brains and less muscle. So, machines replaced your cashier/assembly/low-skill job? Get some special job training or a degree.

As you said, there's not enough money to pay everyone. But the strange thing is, the productivity has increased a lot. It is not convincining to say people get less because they now can produce more. It just indicated that they now work less and produce the same amount as before, but due to they work less, their income dropped (this is the current system: if you work 4 hours, you get 50% the payment than when you work 8 hours).

Borrowing from future is based on the assumption that future productivity will be higher and future income will also be higher. But current situation is that future income will drop due to "productivity increase-> jobless rate rise-> total demand drop". If the future income is constant, then the current debt will become a huge burden

In the past decades, people continously moved into new industry area (IT, financial derivatives, housing), this kept the jobless rate low, but now it seems difficult to find another new industry that can digest that amount of jobless people

Basically, there are 3 ways to deal with the fast rising productivity (or say over supply):

Reduce working hours (this is the best solution in my opinion)
Charge high tax on high productivity companies and increase the lower social wellfare
Move people into new industry

The first 2 reduce the supply, the last one increase the demand through the attractive new products from those new industry

Most of today's economy model is studying the scarcity, it uses lot's of assumptions in a scarcity dominated society, but we already passed that stage long time ago. Keynes discovered that over supply is dangerous, he tried to increase the demand to match the increased productivity. But why not reduce the supply? Because in a credit based economy, you have to increase future income (thus increase supply) to payback the loan and interest, everyone is driven by profit/earnings/loan interests, this makes everyone works like a slave

Yes, reduce working hour is actually a very good way to solve this problem, and it is very scaleable!

Let's say from tomorrow, all the people who have the job should only work 4.5 days a week, at the same time their salary reduced by 10%. What happens then? All the companies will have to use those saved 10% salary payment to hire 10% more workers to keep the productivity up, then the jobless problem solved right away!

The biggest resistance might come from those who have the job, and since they are the majority, this solution might not get passed!

 Made me chuckle

I miss the good ol' days of 5am to 11pm back breaking farm work. EVERYONE was employed back then, from the day they turned 10, till they died at 35{.}

If it were not for the bloody wheel, boat or beast, we'd have unlimited employment opportunities hauling goods around on our backs!

This I agree.


Very true. Having to work less hours to produce the same goods and access the same standard of living is horrible. Horrible! We should all be working more hours.


This is false. Example: Bitcoin. In fact, usually new technologies are disruptive for big stablished companies and helps entrepreneurs.


Luditism should be declared a psicological illness so we can stop hearing the same arguments over and over again. Do you realize that people in the XVIII century were saying exactly what you are saying? Some were very afraid that the new automatition was going to leave the people without a job. In the fucking XVIII century! Hasnt happened yet. What has happened is that thanks to the machines we work less hours, in better working conditions (the machies do the harsh work) and we enjoy a better standard of living. So please lets stop the crazyness, we need more automatition so we have to work less hours and have an even better standard of living.

Computers and robots are the looms and cotton spinning mills of the day. Programmers are code weavers and multi-core/thread spinners. Nothing's changed since 1769.

wow, you certainly have a different viewpoint from most ppl on this forum.

the problem here in the US is we have an unemployment level of 9.2%; not enough jobs for ppl who want to work.  the debt levels have become so high it is squelching growth not just here but worldwide.

technology is having the paradoxical effect of contributing to this by displacing human workers.  you think of this as good but what are these ppl to do?  there's not enough money to continue the handouts we've promised to everyone.  this is precisely why the Congress had difficulty raising the debt ceiling.  everyone realizes we can't just keep taking on more debt to fund everyones easy lifestyle here in the US.  this is because we have saved too little and borrowed from the future to fund our current desires.

They do not, and that is the purpose, less and less people need to work in future. Work is no longer a means to make a living, the society already can provide each person good living condition with the help of robots and machines.

Saving action is bad for today's economy model, since it will cancel out many of the monetary policy efferts generated by government and FED. This can be explained by a very simple example

how do higher unemployment checks encourage going back to work?  just the opposite.

saving is not necessarily bad either by individuals or companies.

Actually I think that is one of the good solution. And of course those paychecks comes from tax (or debt)

Raising tax might stress business, so it should not be taxed on income or revenue, but rather on cash: The more cash holded, the more tax, this also encourage companies not hoarding cash and activly spend and invest

Good point, as long as people are aware and worried about an unfair distribution, there is hope a system can be invented to prevent that from happening

last month i sat down with an investment manager for BofA who was interested in what i thought about the market. 

he told me flat out that the banks refuse to lend the bailout money to consumers b/c they consider them a bad credit risk and also b/c they get free interest from the Fed on their excess reserves OR they can invest those same monies into commodities or stocks.  Voila!  Stock market ramp from hell based on speculation of higher prices, not real economic output.

Good topic and I'm also discussing same thing in another column: https://bitcointalksearch.org/topic/is-90-jobless-rate-possible-when-robots-are-used-everywhere-33267

I think the QEs have done quite good, but not enough, the big problem is that printed money should lend to those companies who are willing to create new jobs, instead of lending to those big companies who just hoard cash and cutting employee (they do this because their market analysis showing the market is going down), but the current credit system prefer lend to these cash hoarders

We already had the technology that can serve almost everyone, but still lots of people suffering, it is definitely a system problem, not technology