Robots Will Not Be a Barrier to Job Creation [BAD POLICY IS THE THREAT]

Real Clear Markets ^ | August 18, 2016 | Robert Samuelson

[expat_panama]

We are such an anxiety-ridden society that we worry about problems that haven't happened, and, almost certainly, won't. Robots are an apt example. Even McKinsey and Co., the high-powered management consulting firm, professes to be concerned. We imagine hordes of robots destroying jobs, leaving millions of middle-class families without work and income. Relax. Unless we adopt self-destructive policies, this is one doomsday we'll avoid.

One thing that the U.S. economy excels at is creating jobs. You might doubt this listening to Donald Trump and Hillary Clinton, who promise personally to create millions of high-paying jobs. This is misleading. The overwhelming share of jobs are created by the private market, not government or politicians.

Yes, there are recessions. Two of them in the post-World War II era were quite severe (those of 1981-82 and 2007-09). We had scary levels of unemployment. But eventually the job creation machine reasserts itself. In 2015, employment totaled 149 million, up from 99 million in 1980 and 137 million in 2000.

What about the robots? In truth, they are not a new problem. There have always been new technologies and products that eliminate entire industries and occupations. But lost jobs and destroyed industries give way, over time, to new industries and jobs. Cars replaced buggies; smartphones are replacing landlines.

Robots are simply the latest chapter in this narrative. Sure, some jobs will vanish. But others will materialize. Often, increases occur so silently and slowly that they're only noticed when they've become a major part of the labor force.

Just the other day, the Census Bureau released a report on "information technology" workers, a job category that didn't exist until 1970. Since then, their numbers have increased 10-fold, growing from 450,000 to 4.6 million. These are well-paying jobs; median earnings in 2014 were $80,665.

The same logic applies to robots. Someone has to design the robots, program them, sell them, service them and fix them. These people buy homes, send their kids to college, take vacations and have health costs. The economy is a circular process, where one person's costs are another person's income. If robots cut costs, the savings have to go somewhere - lower prices, higher wages, higher profits or more business investment. All potentially augment demand.

None of this demeans the hardships - sometimes tragedies - of workers who lose their jobs to new technologies and competitors. Workers whose skills and contacts become obsolete face a difficult time. But this is a long-standing problem that has defied many efforts to solve it.

There are two dangers for the future. One is that the new jobs created by new technologies will require knowledge and skills that are in short supply, leaving unskilled workers without income and the economy with skill scarcities.

The second danger is that government will damage or destroy the job creation process. We live in a profit-making economic system. Government's main role is to maintain the conditions that make hiring profitable.

If we make it too costly for private firms to hire (through high minimum wages, mandated costs and expensive regulations) -- or too difficult to fire - guess what? They won't hire.

That's what ought to worry us, not the specter of more robots.

[Hardastarboard]

Someone has to design the robots, program them, sell them, service them and fix them.

Right up until the robots are taught to fix each other, conceivable within 20 - 30 years. The robots will eliminate all kinds of jobs, and add only a certain narrow range of jobs.

There are two dangers for the future. One is that the new jobs created by new technologies will require knowledge and skills that are in short supply, leaving unskilled workers without income and the economy with skill scarcities.

Of course, and the training required to fix the robots will be pretty extensive. We've already got a population of people with useless degrees, or no degrees and no motivation. I don't see the jobs pyramid getting any wider or shorter.

[expat_panama]

It's a beautiful Thursday morning and all's well!   Stocks settled back from Tuesday's upset and yesterday saw mild gains in rising volume --all going into this morning's flat outlook in futures trading. 

Those guys may be also predicting more losses (-0.71%) in metals but fwiw gold and silver are still up at $1,380.94 and $19.80. 

Almost forgot, today's 'claims day':

8:30 AM Initial Claims
8:30 AM Continuing Claims
8:30 AM Philadelphia Fed
10:00 AM Leading Indicators
10:30 AM Natural Gas Inventories

Elsewhere:

• Taxing the Rich Also Taxes the Little Guy
• Federal Reserve Is In No Rush To Hike, July Meeting Minutes Show
• Clinton and Trump's Lousy Tax Plans
• Trade: Trump & Clinton Both Wrong
• The Riddle of the Wall Street Brain Drain

[Lazamataz]

Yeah.

Until the robots decide to KILL ALL HUMANS.

[Bryanw92]

>>One thing that the U.S. economy excels at is creating jobs.

All we excel at now is making the numbers look like we are creating jobs. According to the DOL, a job is a job. So, if we outsource a $20/ hr full time job with benefits to Vietnam and replace it with a part-time job at a convenience store, then no jobs were lost. If we create 2 convenience store jobs, then we have a gain of one job.

Almost all of Obama’s “jobs created” are this kind of trade. These days, the business of America is losing.

[Lazamataz]

Of course, that will lead to new jobs.

Such as Sergeant, Tech-Com, DN38416.

[fieldmarshaldj]

As long as they start with the Bowel Movement Splatters terrorists first.

[TADSLOS]

The second danger is that government will damage or destroy the job creation process. We live in a profit-making economic system. Government's main role is to maintain the conditions that make hiring profitable.

The future is now. Vote Trump.

[Mr. Douglas]

This explains it really well:
https://www.youtube.com/watch?v=7Pq-S557XQU

[ctdonath2]

“One thing that the U.S. economy excels at is creating jobs.”

Alas, the Left is pushing hard to ban jobs that aren’t worth >$15/hr.

“Someone has to design the robots, program them, sell them, service them and fix them.”

All jobs that require skills which produce more than $15/hr value.
Not everyone has such skills.
Why does the Left hate low-productivity workers so much?

[Mr. Douglas]

Markets have seemed eerily quiet to me the last few weeks. Kind of an “eye of the storm” sort of thing.

[wastedyears]

Almost all of Obama’s “jobs created” are this kind of trade. These days, the business of America is losing.

Trump knows what it takes and means to actually create jobs. He needs to point this out with numbers.

[expat_panama]

until the robots are taught to fix each other, conceivable within 20 - 30 years.

Of course while we won't know that for sure for another 2 or 3 decades, we do know that for a hundred years people have made that prediction and have been wrong.

a population of people with useless degrees, or no degrees and no motivation. I don't see the jobs

That's right folks it's Misery Time!  Let's all sing along:

 

♪♫Gloom, Despair & Agony...♪♫

 

[expat_panama]

Yeah, been noticing that —since mid July stock prices seem to be in a holding pattern. That’s supposed to be a bullish sign but for bullish signs I prefer a solid uptrend.

[Will88]

Various policies and yes, automation, have already eliminated millions of jobs in the US. The starting point today is that about 20% of working age Americans who need a job are not working. The stats we’ve seen recently make this clear.

1. For one in five American families, no family member is employed.

2. One in five heads of household in the US is on one or more means tested poverty programs.

3. About 48 million Americans receiving food stamp benefits.

And yes, robots will eliminate some jobs, and few of the 20% of working age Americans not in the work force will be filling the new jobs created designing and maintaining robots.

The problem is already here. Our politicians just lie to us continuously with statistics. And the problem will only get worse with current trade policies and coming further automation.

[Buckeye McFrog]

Frankly OFCCP, “equal pay” regulations and other Obama racial-and-gender bean counting presents a much bigger barrier than automation. For every person you hire you’ll need 3 to do the paperwork to prove you’re not discriminating.

[central_va]

The problem is the automated factories are not in the USA. We offshored then automated. Too bad it wasn’t done here.

[Mjreagan]

Many jobs will be safe for the foreseeable future. However, automation will eventually do away with many because machines are becoming ‘smarter’. News agencies already have AI systems that can write articles, even legal and finance jobs will be in danger. I don’t see total obsolescence but every field will narrow considerably in the next 20-30 years.

[riverdawg]

“If we make it too costly for private firms to hire (through high minimum wages, mandated costs and expensive regulations) — or too difficult to fire - guess what? They won’t hire.”

That describes much of Europe today. The job market for young people is even worse there than it is here because hiring (and firing) workers is much more expensive.

[expat_panama]

every field will narrow considerably

Or not.  The vast majority of the work I did when I began my engineering career is now done by computers designed and programmed by engineers like me.  The result is not less engineering jobs but far more.  The reason is that since engineering services have become so much less expensive, the economy can now afford to buy so much more and engineers are working harder than ever.

The same's been the case throughout the entire economy as higher productivity drives down costs and demand soars.