Did That Robot Take My Job?

To quote Businessweek, Jan 9 2012 issue, the US produces more than one-quarter more goods and services today than it did in 1999.  But uses almost precisely the same number of workers.  Why?  We have become a lot more productive thanks to robotics and other automation techniques.  Magically, $2.5 trillion worth of stuff  (from 1999 to present) materialized out of thin air. No extra workers were needed.

Businesses have bought many new and modern machines, but not hired many new people.  Having run a business, I know people-costs keep climbing,  and adding or subtracting manpower is not as easy (or as flexible) as turning on and off a robotic operation.

But in 2011, American businesses added 540,000 workers.  That flies in the face of the above. Some say technology destroys jobs – but only some kinds of jobs – and it creates new kinds of jobs (robot repair and replacement?).  This is not much consolation to the 20 million people supposedly still looking for work.  How many of these were in construction?   Some cities have seen 70% or more of their small builders go out of business in the last four years. And big builders have been shrinking as well.  The counter point to that is, some medium sized builders have taken advantage of the drop in competition and are turning out more housing product than ever.  Maybe not at the normal profit per house, but they are moving dirt (lots) which is important. And dirt is much cheaper now than it was 4 years ago.

Automated kiosk’s, automated TV cameras, voice to text (Dragon and Siri) replacing old fashioned dictation, paralegals replaced by internet searches, each of these and many more contribute to job losses – or the lack of hiring.  But some economists think the flat-line demand is responsible.  American factories are working well below their design output.  They won’t hire until more orders come in.

Looming large, world wide, is youthful and productive populations elsewhere.  Today I read that half the population of India is under 25.  And India has 1.2 billion people.  India thus has 2 people under 25 for every person of any age in the USA.  Where will they find jobs for all these people as they enter the work force? How can these new people consume if they can't earn money?