Will our economy continue to grow without creating new jobs? That’s the consensus emerging among some experts who argue that fields as diverse as manufacturing, drilling, and online retail are in for boom times without the concomitant uptick in employment. The culprit? Technology and the information revolution. The FT has more (h/t Tyler Cowen):
Mining, quarrying and oil and gas extraction grew more than any other industry between 2007 and 2012 as new “fracking” techniques made it economic to drill for previously inaccessible resources. […]Drilling is capital intensive, however, so even though the industry’s sales rose by $142bn, its annual payroll was up only $20bn to $61bn in total […]Non-store retail, which includes online shops, recorded a boom in sales – up 31 per cent to $380bn. But the number of establishments rose only 12 per cent to 66,339 while employment in the sector was down slightly.
The details of the report are new, but the outlines of the changes are not. As WRM noted in an essay a few months ago, many people seem to think that what we’re seeing is a real break between capitalism and rising living standards. It turns out, people like Karl Marx made the same mistake when thinking about the Industrial Revolution:
The early Industrial Revolution, for example, was another period when productivity was rising fast but wages and living standards for many people were stagnant or falling. […] In those days, agriculture was shedding jobs as British landlords shifted from renting small plots at low rents to subsistence farmers to more profitable but less labor intensive methods of agriculture like raising sheep. The combination of peasants flocking to the cities and skilled workers losing their jobs to new automated techniques meant that more people were looking for fewer jobs. Living standards for many workers fell sharply, and Britain was convulsed by waves of social unrest. […]In the end, the industrial revolution made pretty much everyone better off in most ways (though arguably jobs in steel factories and coal mines were neither as healthy nor as fulfilling as the traditional jobs on the land).The information revolution seems to be following a very similar pattern. Old jobs are disappearing faster than new ones can be created, and rising inequality combined with stagnant living standards is making people rightly unhappy. Irritating fortunes are being made while millions of people struggle. Yet the underlying productivity of society as a whole is going up.Instead of fighting a process that offers us and the rest of suffering humanity its best hope of better living in the medium to long term (and people should never forget that an information economy is going to be better for the environment than an industrial one), we should be thinking about how to manage the change as best we can, and how to accelerate the creation of new jobs in new fields as the old ones fade away.
The Fordist world of guaranteed jobs in large labor-intensive industries is quickly coming to an end. Instead, jobs will increasingly need to be service-related, and for those who have the entrepreneurial initiative self-generated. It won’t be an easy transition by any stretch of the imagination, but there really is no going back to how things were before.