The US Economy Grows, But Jobs Don’t

The US Economy Grows, But Jobs Don’t



It is about time governments of the world face a low working hour economy.  People can only consume so much. Or, actually, people should only consume what they need, and not what they want, and certainly, not what they can afford.  The world can only afford so much consumption.  Base on that, our consumption level is constrained, limited.  Population is levelling off in most countries.  So the total national consumption is also constrained.  However, our productivity is rising, due mostly to technology, which the classical economists, the likes of Adam Smith, never dreamed of.



In the good old days, a farmer, worked hard everyday for a dozen hours a day, 365 days a year, can feed his family, and may be a few people more.  Today, a farmer, with the right machines, fertilizer, and production techniques, can feed several thousand people. Factory workers have similar productivity gains. And with robotics, the gain is even more significant.  Whole production line for vehicles, heavy machinery, pharmaceuticals, electronics, can product what a few dozen people produced in the good old days, using just a fraction of a worker to manage.  Ships used to employ over a hundred sailors can now cross the ocean with just a dozen sailors, much faster, and carry a hundred times the cargo.



Even in the service industries, e.g. restaurants, retail, etc., computerization of work had reduced the requirement of employment, though not to the same extend as the manufacturing.  In the last few decades, displacing whole sections of keypunchers was universal among all companies.  Most companies are now employing much less office assistance workers.  Almost no one is maintaining a typing pool now, though typing pool was the norm in the 70's.  Equipment are getting easier to use that most people do their own copying now.  Electronic meeting scheduling is now the norm, eliminating having secretaries to set up meetings.  Work is simply disappearing, because they were done much more effectively with equipment.



These productivity gain, if not adjusted with working hours per capita, and a constrained consumption, will certainly lead to surplus of supply with no demand to absorb.  The level of constrained consumption will employ less and less working hours.



We can either increase the number of unemployed, to keep supply and demand in balance.  Or we can reduce the number of per capita working hours.  Or both.  A nation must choose the right combination of these, or will be forced to endure high unemployment.



In the early days of computerization/automation/digitization, proposers of computerization projects promote the notion of reduce staff needs.  That dream had been realized.  However, our economy has not adjust to such reality.  The increase productivity, with no reduction in manpower, had entailed increased supply, and lowered costs.  Consumption had increase several folds, and now is exceeding our ability to consume, and endangering the environment.  This reality left us with not much alternatives but to adjust our expectation of national production hours.  How these production hours are distribute among the citizens is a direction governments and parliamentarians need to consider.