Content & Social Engagement Strategist Mervyn Dinnen kicked of an interesting twitter discussion last night which also involved fellow analyst/peak-jobber Flip Chart Rick when he tweeted this Wall Street Journal article by former Treasury Secretary Lawrence H. Summers. Click through for the full article and an interesting chart. Lawrence H. Summers on the Economic Challenge of the Future: Jobs. Excerpt then an opinion:
The great economic problem for millennia has been scarcity. People want much more than can be produced. The challenge has been to produce as much as possible and to ensure that everybody gets their fair share.
In important respects, the problem has changed. There are many more Americans who are obese than who are undernourished, for example. But that is only a harbinger of things to come. The economic challenge of the future will not be producing enough. It will be providing enough good jobs.
What has happened in agriculture over the past century is remarkable. The share of American workers employed in agriculture has declined from over a third a century ago to between 1% and 2% today. Why? Because agricultural productivity has risen spectacularly, with mechanization reducing the demand for agricultural workers even as food is more abundant than ever.
All of this has had far-reaching implications. Tens of millions of people have moved from rural to urban areas to take jobs in manufacturing and services. Supporting those left behind has led the federal government to spend well over $100 billion in the past decade. Though global issues surely remain, the problems in American agriculture today no longer involve ensuring that food is available, but ensuring livelihoods for those who once worked in agriculture.
‘Software Is Eating the World’
What has happened in agriculture is happening to much of the rest of the economy. In Marc Andreessen’s phrase, “Software is eating the world.” Already the number of Americans doing production work in manufacturing and the number on disability are comparable. There are good reasons to expect an uptick in the next few years in manufacturing employment. But the long-term trend is inexorable and nearly universal. As in agriculture, technology is allowing the production of far more output with far fewer people. No country can aspire to more of an increase in competitiveness than China, yet even it has suffered a decline in manufacturing employment over the past two decades. And the robotics and 3-D printing revolutions are still in their second innings.
The question about how to create enough ‘good jobs’ for the people who need to work has been an issue for policy makers going back at least half a century as the Keynesian model of economics went out of favour. Although largely ignored Robert McNamara touched on the issue in his One Hundred Countries, Two Billion People in 1973.
For argument sake, let us consider that good jobs are those that employ you consistently (such as a full-time position with full benefits) and provides you with an income so that you can support your immediate family. The issue as I see it is that the concept of ‘good-jobs’ is in absolute structural decline and is in the long-term process of being replaced by other forms of ‘jobs’ such as contingent, offshored, outsourced or free all of which are stepping stones toward high-levels of augmentation and automation.
The question that Lawrence H. Summers needs to be asking is… How does the global economy work in a world of declining employment and potentially one that might require the great majority of us not to work at all?