The middle class is doomed… – Piggington's Econo-Almanac

This topic has 97 replies, 16 voices, and was last updated 11 years, 9 months ago by The-Shoveler.

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January 23, 2013 at 11:12 AM #20485

no_such_reality
Participant

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.
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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.
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“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.

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[/quote]

January 23, 2013 at 11:21 AM #758314

Coronita
Participant

we know that.

use your brain, not your hands.

Ingenuity trumps labor. always.

January 23, 2013 at 11:24 AM #758315

no_such_reality
Participant

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.

January 23, 2013 at 11:29 AM #758316

Coronita
Participant

[quote=no_such_reality]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.[/quote]

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.

January 23, 2013 at 11:30 AM #758318

Coronita
Participant

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

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

January 23, 2013 at 11:35 AM #758319

The-Shoveler
Participant

[quote=flu][quote=no_such_reality]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.[/quote]

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.[/quote]

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.

January 23, 2013 at 11:52 AM #758323

Hatfield
Participant

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.

January 23, 2013 at 11:54 AM #758324

The-Shoveler
Participant

manufacturing is making a comeback,

One word “Robots” well OK, two words,

Automation.

January 23, 2013 at 11:55 AM #758326

Coronita
Participant

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.

January 23, 2013 at 12:07 PM #758333

livinincali
Participant

[quote=The-Shoveler]manufacturing is making a comeback,

One word “Robots” well OK, two words,

Automation.[/quote]

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.

January 23, 2013 at 12:08 PM #758335

desmond
Participant

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.

January 23, 2013 at 12:19 PM #758339

Coronita
Participant

[quote=desmond]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.[/quote]

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..

January 23, 2013 at 1:04 PM #758352

no_such_reality
Participant

[quote=flu]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.[/quote]

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…[/quote]

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.

January 23, 2013 at 1:10 PM #758356

The-Shoveler
Participant

[quote=livinincali][quote=The-Shoveler]manufacturing is making a comeback,

One word “Robots” well OK, two words,

Automation.[/quote]

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.[/quote]

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).

January 23, 2013 at 1:10 PM #758358

Coronita
Participant

[quote=no_such_reality][quote=flu]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.[/quote]

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…[/quote]

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.[/quote]

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