The middle class is doomed...

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Submitted by no_such_reality on January 23, 2013 - 12:12pm

How Tech is Killing the Middle Class

Quote:

NEW YORK (AP) — Five years after the start of the Great Recession, the toll is terrifyingly clear: Millions of middle-class jobs have been lost in developed countries the world over.

And the situation is even worse than it appears.

Most of the jobs will never return, and millions more are likely to vanish as well, say experts who study the labor market. What's more, these jobs aren't just being lost to China and other developing countries, and they aren't just factory work. Increasingly, jobs are disappearing in the service sector, home to two-thirds of all workers.

They're being obliterated by technology.

Year after year, the software that runs computers and an array of other machines and devices becomes more sophisticated and powerful and capable of doing more efficiently tasks that humans have always done. For decades, science fiction warned of a future when we would be architects of our own obsolescence, replaced by our machines; an Associated Press analysis finds that the future has arrived.
___
EDITOR'S NOTE: First in a three-part series on the loss of middle-class jobs in the wake of the Great Recession, and the role of technology.
___
"The jobs that are going away aren't coming back," says Andrew McAfee, principal research scientist at the Center for Digital Business at the Massachusetts Institute of Technology and co-author of "Race Against the Machine." ''I have never seen a period where computers demonstrated as many skills and abilities as they have over the past seven years."

The global economy is being reshaped by machines that generate and analyze vast amounts of data; by devices such as smartphones and tablet computers that let people work just about anywhere, even when they're on the move; by smarter, nimbler robots; and by services that let businesses rent computing power when they need it, instead of installing expensive equipment and hiring IT staffs to run it. Whole employment categories, from secretaries to travel agents, are starting to disappear.

"There's no sector of the economy that's going to get a pass," says Martin Ford, who runs a software company and wrote "The Lights in the Tunnel," a book predicting widespread job losses. "It's everywhere."

The numbers startle even labor economists. In the United States, half the 7.5 million jobs lost during the Great Recession were in industries that pay middle-class wages, ranging from $38,000 to $68,000. But only 2 percent of the 3.5 million jobs gained since the recession ended in June 2009 are in midpay industries. Nearly 70 percent are in low-pay industries, 29 percent in industries that pay well.

...

Submitted by flu on January 23, 2013 - 12:21pm.

we know that.

use your brain, not your hands.

Ingenuity trumps labor. always.

Submitted by no_such_reality on January 23, 2013 - 12:24pm.

No flu, that's not the point. It's starting to replace our brains as well.

The simple brain functions now, but steadily higher level brain functions.

Submitted by flu on January 23, 2013 - 12:29pm.

no_such_reality wrote:
No flu, that's not the point. It's starting to replace our brains as well.

The simple brain functions now, but steadily higher level brain functions.

Machines will never replace creativity....

Example:
Being a good software "programmer" is labor....Easily replaceable if not now in the distant future

Coming up with a solution to problems goes beyond simple if..then...else.

If things were so easy, companies like google wouldn't employ so many thinkers...

Opportunities will always exist for people who are paid to think and solve problems.

Much of innovation is based on creativity more than following rules. People think software is a "science". It isn't... Stupid language tricks and dime a dozen programmers isn't what moves this world.

Same could be said for hardware.

Submitted by flu on January 23, 2013 - 12:30pm.

This for example is just a tiny thing of what's to come....

http://www.youtube.com/watch?v=Q8w2asyvB1U

Submitted by The-Shoveler on January 23, 2013 - 12:35pm.

flu wrote:
no_such_reality wrote:
No flu, that's not the point. It's starting to replace our brains as well.

The simple brain functions now, but steadily higher level brain functions.

Machines will never replace creativity....

Example:
Being a good software "programmer" is labor....Easily replaceable if not now in the distant future

Coming up with a solution to problems goes beyond simple if..then...else.

If things were so easy, companies like google wouldn't employ so many thinkers...

Opportunities will always exist for people who are paid to think and solve problems.

Much of innovation is based on creativity more than following rules. People think software is a "science". It isn't... Stupid language tricks and dime a dozen programmers isn't what moves this world.

Same could be said for hardware.

The 10-15%'ers, Engineards, RN's, public employee's, a hand-full of other's, maybe a few Realtors.

85% not going to do so well.

Going to get interesting.

Submitted by Hatfield on January 23, 2013 - 12:52pm.

For decades the export of manufacturing sector jobs has been incentivized by policy. That's the primary cause of the decline of the middle class, and that needs to change.

The technological change is nothing to fear, IMHO, What we're seeing is the beginning of Industrial Revolution 2.0. These disruptive new technologies come with great opportunities. I actually think we are headed towards a renaissance of US-based manufacturing, but its going to look very different from manufacturing in the 1950s.

On the policy point I'm a pessimist, but I'm on optimist on the technological front.

Submitted by The-Shoveler on January 23, 2013 - 12:54pm.

manufacturing is making a comeback,

One word "Robots" well OK, two words,

Automation.

Submitted by flu on January 23, 2013 - 12:55pm.

Side jobs are created from change and engineering. Adapt or die. It's that simple.

You'll still need attorneys, accountants, people in marketing, sales, etc. It's not really going to be any different.

Submitted by livinincali on January 23, 2013 - 1:07pm.

The-Shoveler wrote:
manufacturing is making a comeback,

One word "Robots" well OK, two words,

Automation.

Make sure you have a inexpensive energy source. All units of productivity from human labor or robots has two components. Efficiency and total energy consumption. Efficiency is limited by the second law of thermodynamics and there's somewhat limited gains to be made in that realm. Means total energy output is the more important factor.

Submitted by desmond on January 23, 2013 - 1:08pm.

Yes, flu the smart people will do fine, but, you need a strong and large middle class to pay for everything that has been promised. If not, you will will see a faster detrioration in the way we all live.

Submitted by flu on January 23, 2013 - 1:19pm.

desmond wrote:
Yes, flu the smart people will do fine, but, you need a strong and large middle class to pay for everything that has been promised. If not, you will will see a faster detrioration in the way we all live.

Middle class is not going anywhere. They'll just end up doing something else...

when an industry/direction changes, some jobs will get eliminated some jobs will get created. Some people will have to get retrained and and some people can learn on themselves. And some people give up. I don't see what the big deal is.

I think we need a big change. I think the reason why we're sort of stuck right now is because companies are focusing on the wrong thing. Companies are trying to squeeze there bottom lines to get higher profits. They aren't necessarily trying to innovate. That's why they keep focusing on cutting cost, not doing knew things.

As long as companies focus exclusively on cost, american workers will always lose, because americans aren't willing to give up their quality of life.

I think, environmental issues aside, if we do ever take our energy sources here more, it will open the door up for more jobs too. We just need to get past all the tree humpers before we can..

Submitted by no_such_reality on January 23, 2013 - 2:04pm.

flu wrote:
Side jobs are created from change and engineering. Adapt or die. It's that simple.

You'll still need attorneys, accountants, people in marketing, sales, etc. It's not really going to be any different.

Therein is where you are wrong.

Technology is already making all but the highest functions in all of those roles redundant.

Technology is taking Pareto principle to the extreme. It's replacing the 80% that consumes your time in the higher functions and replaces it. Basically augmenting one to do the prior job of 5 or 10 in the higher rules and flat out eliminating the junior roles.

RNs? Yep, them too. You'll see greater portions of their role augmented with technology and then supplemented with more orderlies.

As you said, creativity is the solution. If you create you're employable. But let's be honest, what percentage of the current workforce, really creates? 1%? Not the 1% with money, just 1%. Not the 10% deciding what to do, not the 15% figuring out how to do what someone else has decided needs to be done, but actually, create, with brain power...

Quote:

Example:
Being a good software "programmer" is labor....Easily replaceable if not now in the distant future
Coming up with a solution to problems goes beyond simple if..then...else.
If things were so easy, companies like google wouldn't employ so many thinkers...

All of those are replaceable. Creating isn't problem solving, it's knowing what problem needs to be solved. Many of those google employees are just good software "programmer". Computers are becoming increasingly good at problem solving. Defining the problem, not so much.

If your role is figuring out "how to do X", you're replaceable. If your role is figuring out what "X" is, you're maybe not.

Submitted by The-Shoveler on January 23, 2013 - 2:10pm.

livinincali wrote:
The-Shoveler wrote:
manufacturing is making a comeback,

One word "Robots" well OK, two words,

Automation.

Make sure you have a inexpensive energy source. All units of productivity from human labor or robots has two components. Efficiency and total energy consumption. Efficiency is limited by the second law of thermodynamics and there's somewhat limited gains to be made in that realm. Means total energy output is the more important factor.

This is one area where the USA has been recently making a lot of progress, we are almost a net energy exporter, and are project to be a net energy exporter by 2020.
We have hardly even begun to explore off the west coast yet, there is enough underwater methane for several million years of our current usage as well, OK so there is a little heat problem.

I think we will get into geo engineering as a necessity anyway as there is very little likelihood we will mend our carbon ways (read as in no chance in heck, If we gave up carbon, China would double their output just because).

Submitted by flu on January 23, 2013 - 2:10pm.

no_such_reality wrote:
flu wrote:
Side jobs are created from change and engineering. Adapt or die. It's that simple.

You'll still need attorneys, accountants, people in marketing, sales, etc. It's not really going to be any different.

Therein is where you are wrong.

Technology is already making all but the highest functions in all of those roles redundant.

Technology is taking Pareto principle to the extreme. It's replacing the 80% that consumes your time in the higher functions and replaces it. Basically augmenting one to do the prior job of 5 or 10 in the higher rules and flat out eliminating the junior roles.

RNs? Yep, them too. You'll see greater portions of their role augmented with technology and then supplemented with more orderlies.

As you said, creativity is the solution. If you create you're employable. But let's be honest, what percentage of the current workforce, really creates? 1%? Not the 1% with money, just 1%. Not the 10% deciding what to do, not the 15% figuring out how to do what someone else has decided needs to be done, but actually, create, with brain power...

Quote:

Example:
Being a good software "programmer" is labor....Easily replaceable if not now in the distant future
Coming up with a solution to problems goes beyond simple if..then...else.
If things were so easy, companies like google wouldn't employ so many thinkers...

All of those are replaceable. Creating isn't problem solving, it's knowing what problem needs to be solved. Many of those google employees are just good software "programmer". Computers are becoming increasingly good at problem solving. Defining the problem, not so much.

If your role is figuring out "how to do X", you're replaceable. If your role is figuring out what "X" is, you're maybe not.

I disagree. Ideas are a dime a dozen. The how (execution) is what always trips people/companies up...

Submitted by desmond on January 23, 2013 - 2:24pm.

There are some jobs that can never be replaced:

http://www.youtube.com/watch?feature=pla...

Submitted by SD Transplant on January 23, 2013 - 2:36pm.

here they come.....the robots

http://www.cbsnews.com/video/watch/?id=5...

Submitted by flu on January 23, 2013 - 2:42pm.

desmond wrote:
There are some jobs that can never be replaced:

http://www.youtube.com/watch?feature=player_embedded&v=uPq7jVGPs3g

Meh... The mercedes is a so-so car....

I like the vette better.

You were talking about the car, right? :)

Submitted by no_such_reality on January 23, 2013 - 2:43pm.

flu wrote:

I disagree. Ideas are a dime a dozen. The how (execution) is what always trips people/companies up...

The execution again, isn't creativity. It's execution. People and companies trip up in the execution for a wide variety of reasons. Being a bad idea is just one of them. People being fickle, inept, disinterested, unmotivated, are more. Sick, just a mistake, or just flat out failing are others.

Think FedEx. The idea was item, the execution is paramount, but the execution wasn't the creativity. And increasingly, with plug and play components, the execution is becoming a commodity.

There will always be jobs for those making those items, or improving them, but increasingly, we'll see an ever greater shift towards people that can leverage abstract factory patterns with plug-and-play components.

It may be 10 years out. Maybe 20. But think of how many people you work with are really just doing stupid language tricks.

Submitted by flu on January 23, 2013 - 2:51pm.

no_such_reality wrote:

It may be 10 years out. Maybe 20. But think of how many people you work with are really just doing stupid language tricks.

I would say a lot of them :)

Meh.. I don't care. I'm out the workforce by then.

Submitted by no_such_reality on January 23, 2013 - 3:05pm.

flu wrote:
no_such_reality wrote:

It may be 10 years out. Maybe 20. But think of how many people you work with are really just doing stupid language tricks.

I would say a lot of them :)

Meh.. I don't care. I'm out the workforce by then.

Hopefully me too. But I'm thinking about your kid, and my 2 year old.

IBM: $106B in revenue, 440,000 employees and falling.
Google: $38B in revenue, 53,000 employees
Valve: $2.5B in revenue, 400 employees...

The Valve new employee handbook is quite interesting. I wonder how many will be able to adapt to it?

Now let's translate. If we grow our economy to $20 Trillion and we continue to produce like IBM, we need 83M workers ($20T/$106B)*440K

Like Google and we need 28 million workers.

Like valve and we need 3.2 million workers...

Submitted by livinincali on January 23, 2013 - 3:07pm.

desmond wrote:
Yes, flu the smart people will do fine, but, you need a strong and large middle class to pay for everything that has been promised. If not, you will will see a faster detrioration in the way we all live.

Perhaps those promises just aren't a mathematically reality. Retirement for the masses is a relatively new concept that was based on a population explosion that resulted from major gains in technology and transportation. Maybe working until you die doing something (whether it's producing goods or providing services) is the sustainable equilibrium point. It's been that way for decades prior to the 1950's-1960's.

Maybe retirement is something reserved from the select few (the top 20% or so). Whether you subscribe to the capitalist approach (you can retire if you have the most wealth) or a socialist approach in which is based on some moral/social structure (the oldest, the neediest, lottery, favored class by the leaders).

Submitted by AN on January 23, 2013 - 3:19pm.

no_such_reality wrote:
flu wrote:
no_such_reality wrote:

It may be 10 years out. Maybe 20. But think of how many people you work with are really just doing stupid language tricks.

I would say a lot of them :)

Meh.. I don't care. I'm out the workforce by then.

Hopefully me too. But I'm thinking about your kid, and my 2 year old.

You're bumming me out man. I too hope to be out of the workforce in 20 years, I'm hoping my kids will have more opportunities than I did. I'm an optimist, so I think that will happen :-). Or at least I hope it'll happen.

Submitted by no_such_reality on January 23, 2013 - 3:40pm.

AN, ironically, I think the current kid's generation, the second half of Generation Y and the current post 2000 born children will be fine.

As much as they get dissed, they oddly, have been conditioned by technology to adapt, plagiarize and use.

I foresee more and more business shifting to 'small business' even though their revenues may be in the tens of millions or billions, like Valve.

When you look at Google, or Amazon and the ability to stand up so much professional business enterprise class functions by yourself just out of their app marketplaces and oddly, combine it with the mindset displayed in "The Four Hour Work Week", the kids get it.

They're used to thinking, I need an app to do X. And that app to do X is steadily approaching 99 cents.

Submitted by AN on January 23, 2013 - 3:56pm.

no_such_reality wrote:
AN, ironically, I think the current kid's generation, the second half of Generation Y and the current post 2000 born children will be fine.

As much as they get dissed, they oddly, have been conditioned by technology to adapt, plagiarize and use.

I foresee more and more business shifting to 'small business' even though their revenues may be in the tens of millions or billions, like Valve.

When you look at Google, or Amazon and the ability to stand up so much professional business enterprise class functions by yourself just out of their app marketplaces and oddly, combine it with the mindset displayed in "The Four Hour Work Week", the kids get it.

They're used to thinking, I need an app to do X. And that app to do X is steadily approaching 99 cents.


I think they will have to adapt or die just like us. The smart one, the ingenious one, the hard working one will be fine, just like us. You just can't be lazy and depend on other to hand you your opportunity anymore.

Submitted by bobby on January 23, 2013 - 4:21pm.

AN wrote:

I think they will have to adapt or die just like us. The smart one, the ingenious one, the hard working one will be fine, just like us. You just can't be lazy and depend on other to hand you your opportunity anymore.

not trying to make this political but with the entitlement mentality, I think those who don't really want to work will also be just fine. No they won't be as well off as those who are smart and industrious; but they won't be homeless or starving. All they need is to vote for a policy that allows some redistribution of wealth.
(again, not debating the morality of this policy - just stating the belief that the social safety net and the current expectation will allow those who don't do much to be OK).

Submitted by The-Shoveler on January 23, 2013 - 4:48pm.

bobby wrote:
AN wrote:

I think they will have to adapt or die just like us. The smart one, the ingenious one, the hard working one will be fine, just like us. You just can't be lazy and depend on other to hand you your opportunity anymore.

not trying to make this political but with the entitlement mentality, I think those who don't really want to work will also be just fine. No they won't be as well off as those who are smart and industrious; but they won't be homeless or starving. All they need is to vote for a policy that allows some redistribution of wealth.
(again, not debating the morality of this policy - just stating the belief that the social safety net and the current expectation will allow those who don't do much to be OK).

Bing!! bing!!

I think you hit it. It is unlikely they will be living large though, just OK.

Someone has to buy the stuff as well.

the 15% can't just sell to the 15%.

With a little luck maybe we will get some works projects, like trains and better public transport.

You should see the projects they have going in China, it is very disappointing in some ways coming back home and seeing virtually nothing going on.

The money printing has just begun folks.

Really do you just think it would be like Mad Max or something?

Submitted by CA renter on January 24, 2013 - 2:56am.

flu wrote:
Side jobs are created from change and engineering. Adapt or die. It's that simple.

You'll still need attorneys, accountants, people in marketing, sales, etc. It's not really going to be any different.

-Attorneys: A lot of legal information can now be found online, as can the forms that people can use to represent themselves. The legal profession has been severely hit over the past few years.

http://legalcareers.about.com/od/careert...

-Accountants: Technology is drastically changing the way people use accountants as software can now do in a few hours what many accountants had to physically spend weeks/months/years doing. Companies can also outsource a lot of the work to low-wage countries.

See page 12 from this presentation:

https://docs.google.com/viewer?a=v&q=cac...

-Marketing/Sales: The travel industry has already been hammered by technology, and the real estate industry has been taking a beating as well. The entertainment industry (a.k.a.: biggest player in the marketing) has been hard hit by large, medium, and small-time competition that was often made possible by technology and outsourcing. And we all know how they've been very negatively affected by the internet.

Anyone who thinks they are going to come out of this unscathed -- no matter how smart or how driven they are -- is deluding him/herself.

Submitted by CA renter on January 24, 2013 - 3:37am.

AN wrote:
no_such_reality wrote:
AN, ironically, I think the current kid's generation, the second half of Generation Y and the current post 2000 born children will be fine.

As much as they get dissed, they oddly, have been conditioned by technology to adapt, plagiarize and use.

I foresee more and more business shifting to 'small business' even though their revenues may be in the tens of millions or billions, like Valve.

When you look at Google, or Amazon and the ability to stand up so much professional business enterprise class functions by yourself just out of their app marketplaces and oddly, combine it with the mindset displayed in "The Four Hour Work Week", the kids get it.

They're used to thinking, I need an app to do X. And that app to do X is steadily approaching 99 cents.


I think they will have to adapt or die just like us. The smart one, the ingenious one, the hard working one will be fine, just like us. You just can't be lazy and depend on other to hand you your opportunity anymore.

AN,

You keep referring to people who are not "like you" as lazy. Has it ever occurred to you that they might be harder-working, and even smarter than you? Some of the hardest workers are often the poorest, and I can show you many, many people with Ph.D.'s (even with your much-loved STEM degrees) who don't even make $100K after decades on the job as a successful and proven employee.

BTW, you need to acknowledge the weakness of your STEM degree and start reading a few history/sociology/political science books. Those who are what you call "lazy" will not die, though they will adapt in a way that you will not like at all. They will kill those who they perceive to be impoverishing them and taking away their opportunities. It has always been that way. You cannot impoverish the majority of the population for the benefit of the few without some very negative effects, and God help you if you maintain the arrogant attitude that you are somehow better than they are, or "deserve" wealth and opportunity more than they do.

Submitted by flu on January 24, 2013 - 5:44am.

CA renter wrote:
flu wrote:
Side jobs are created from change and engineering. Adapt or die. It's that simple.

You'll still need attorneys, accountants, people in marketing, sales, etc. It's not really going to be any different.

-Attorneys: A lot of legal information can now be found online, as can the forms that people can use to represent themselves. The legal profession has been severely hit over the past few years.

http://legalcareers.about.com/od/careert...

-Accountants: Technology is drastically changing the way people use accountants as software can now do in a few hours what many accountants had to physically spend weeks/months/years doing. Companies can also outsource a lot of the work to low-wage countries.

See page 12 from this presentation:

https://docs.google.com/viewer?a=v&q=cac...

-Marketing/Sales: The travel industry has already been hammered by technology, and the real estate industry has been taking a beating as well. The entertainment industry (a.k.a.: biggest player in the marketing) has been hard hit by large, medium, and small-time competition that was often made possible by technology and outsourcing. And we all know how they've been very negatively affected by the internet.

Anyone who thinks they are going to come out of this unscathed -- no matter how smart or how driven they are -- is deluding him/herself.

Not really. Only people who give up or havent been building wealth and living paycheck to paycheck or people who have serious learned helplessness loser mentality. In everything. There are winners and there are losers. People definitely lose by doing nothing.
Obviously people never worked in said areas always oversimplify what they don't know about. Sitting down with a CPA anbd done anything slightly more involved was an eye opener how complex the us tax rules are and how dynamically they change and being that at some time I've worked at turbo tax the issue isnt about the mechanism of punching in numbers but by the sheer ideas how and what to claim for anything.

But I love people who give up before trying... Because I don't see them as competitive peers. They aren't there competing for top paying jobs. And they aren't there competing for investment opportunities. And chances are neither will their kids be since they've also given up early.

If people want to have loser mentality all the time...or continuously just giving feel good trophies for "best effort awards" instead of actual results... Not much you can do about it.

Submitted by livinincali on January 24, 2013 - 8:01am.

CA renter wrote:

You keep referring to people who are not "like you" as lazy. Has it ever occurred to you that they might be harder-working, and even smarter than you? Some of the hardest workers are often the poorest, and I can show you many, many people with Ph.D.'s (even with your much-loved STEM degrees) who don't even make $100K after decades on the job as a successful and proven employee.

You don't get wealth from working hard. You get wealth from working smart and some degree of luck. The innovators are the ones that figure out smarter way to do a task. Whether changing the process or using a machine to replace manual labor.

Business at it's core is problem solving. Find a problem and create a efficient solution for it. Our education system should focus on problem solving, but often that takes a back seat to feel good topics. Not that feel good topics are bad, they just don't do much to create economic growth.

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