Gregory Clark, who dumped cold water on the dreams of development economists and good-hearted people worldwide with A Farewell to Alms (see my blog posting from a year ago), is back with another pail of icy salt water. This time he throws it in the face of folks who think that an economic recovery will bring jobs and prosperity to America’s lowest skilled workers. See this op-editorial in the Washington Post.
[Clark’s book is much more interesting and completely argued. In the op-ed he leaves out one of his central points, which is that modern industrial processes are less tolerant of careless or incompetent workers than older processes. In a plant where a single mistake can result in the spoiling of $1 million of material or the death of another worker, quite a few Americans would not be welcome in that factory even at a wage of 1 penny per hour. Especially given government mandates of minimum wages and health care benefits, quite a few American workers fall into the same class as horses did in the early 20th century. Even a free horse wasn’t productive enough to earn his cost of maintenance. Machines did not replace humans in the 20th century, as had been predicted by forward thinkers, but machines did replace horses. Coincidentally, the New York Times yesterday carried a story about Iraqi immigrants to the U.S. The fundamental problem seems to be that there is not a market-clearing wage at which American companies want to hire these folks and at which the Iraqis are able to sustain themselves.]
I know that as your post is not much more than a reproduction of the editorial it doesn’t necessarily reflect your views, but I’d like to ask you a question that I have been bouncing around my head for a while now and I’d like to get some different points of view on:
would it be possible to create enough demand for unskilled labor to accomodate all unskilled workers today and will there be _any_ sustainable market of significant size for unskilled labor in 5, 10 or 20 years from now?
Would you agree that we will have to accept that there will be a certain percentage of our population that will simply have no marketable skills to offer in the near future?
John: Both Gregory Clark and Alan Greenspan seem to have written off large segments of the American labor force, mostly because our schools are so terrible and we lack the political will to do anything about it (other than put more money into a provably failed system). My personal view is not quite as dark. I don’t think that it is actually that hard to educate people. We assume that lectures+homework will work for everyone and that someone who sits through 12 years of lectures and hasn’t learned much is innately stupid and cannot be taught. If we throw out that assumption it might be possible to educate a much higher percentage of Americans to a high standard. A lot of the smartest guys that I know never went to college because they hated sitting in lectures with their hands idle (and public school killed any desire they might have had to participate in mass bureaucratic education). They are now aircraft mechanics and much better with detailed paperwork and reading carefully than the average college graduate (and of course vastly better at working with their hands).
A public school teacher might say “This kid is mentally deficient” or “This kid has bad parents”, but all that we really know about a failing public school student is that he or she does not like to sit passively for 6 hours per day listening to a unionized civil servant talk.
If we accept that an American’s first 18 years are going to be a waste both for them and the taxpayer, that still leaves quite a bit of life expectancy. Maybe the answer is to put public money into trade schools and apprenticeships.
A lot of people could become much more valuable as employees simple by being more reliable. A guy who shows up exactly when promised and follows directions to weed out a lawn can probably find work. If economic competition increases to a Chinese level, we might find that a lot of workers choose to become more self-disciplined rather than starve.
Will Wilkinson deals with the argument here. One trouble with predictions that we will soon have widespread unemployment of the less-skilled due to technological change is that if this were going to happen it should have happened a long, long time ago. Since it didn’t, it behooves us to understand why such predictions were wrong in the past before we make them again today. “I talked to a robot to change my flight reservation” doesn’t count as hard evidence against that point.
looks like my URL got stripped. I meant to reference this link:
http://www.willwilkinson.net/flybottle/2009/08/09/gregory-clark-uses-computer-over-phone-predicts-economic-redundany-of-working-class/
See also Marshall Brain’s “Robotic Nation” essays. Ironically for this blog, Brain’s prediction for the first skilled job to be replaced by machines: pilots.
J. Peterson: I hope that the rest of Brain’s predictions are more likely than his prediction for commercial airline pilots. It is true that a computer can get a plane from an empty airport in the middle of nowhere to another empty airport in the middle of nowhere. That is a different task than landing at JFK on a summer evening. The FAA would have to approve entirely new aircraft with new systems and software. The FAA would have to institute new forms of air traffic control. Right now a pilot might be told to “follow company 737 on left base” and have to look around the sky for a Boeing 737 painted in familiar colors.
I believe Clark is spot-on. But not just “unskilled” labor but “blue collar labor” also. Case-in-point…
A glider-pilot buddy is a Class-A machinist in the SF Bay area. He pointed out the prevailing wage for a Class-A machinist was $25/hr in 1989 (20 yrs ago) dollars. The prevailing wage today for a Class-A machinist (SF Bay area) is $18 (2009) dollars.
So, corrected for inflation, even “skilled, but blue-collar” workers are wage-challenged.
I think we have to remember that even the highly educated often have no “marketable” skills in this economy. A lot of kids with multiple degrees are coming out into the world and getting the shock of their life.