sfbg radio: the jobs picture


Today Johnny talks to economist Johnny Venom about the jobs picture. Listen after the jump.

sfbgradio10/212010 by endorsements2010


I was wrong on the level of unionization of France. I had said about 82% when in reality it's closer to 50 or slightly under. Still more than what it is in the US. My apologies for the incorrect info.

Posted by Johnny Venom on Oct. 23, 2010 @ 5:43 pm

Technology eliminates what were traditional jobs every month which are not replaced--what do you guys say to that conundrum?

Posted by Guest on Oct. 24, 2010 @ 7:41 am

Unfortunately, that has always been the case. But technological progress has also opened a way for new jobs as well. Let us use the famous example of the buggy whip manufacturer and their employees. Now one argument to be made is that we stall technological progress as much as we logically can to allow the buggy whip company to survive and keep it's employees. But to do that would require much more expense than the benefits perceived, and one single country can't prevent progress in another. If country X prevents the obsolescence of horse-drawn buggies through force, than the tinkerer will go to country Y and make his automobile.

That is why a second way that takes progress by the horns and fosters it's development. Let the tinkerer build his car, and the buggy whip manufacturer can either go from whips to say car parts (not that difficult at that stage of development, I mean it doesn't have to be every car part, it could be a simple thing like a crank shaft or what have you). The employee then goes from making whips to whatever part that company so chooses. Now if the buggy whip company decides to stick to it's old product and perhaps face economic demise, there will be other companies springing up to cater to this new industry. Employment loss in the older company will simply be made up in the new burgeoning industry revolving around that new fangled contraption called the automobile.

This is why we need a modern industrial policy. Virtually all of our trading partners, indeed all of our largest ones have this, operate using an industrial policy. They decide what industries they will nurture, which they will not, and make sure to meet the goals set forth in such endeavors. Please do not confuse this with say those 5-year plans one sees in a command economy nation like in the defunct Soviet Union. We're not looking to micromanage and own factories here, we're saying that we will protect and give aid to various industries which in turn will hire our people. The Japanese, the Koreans, the Germans, the Chinese, the French all do this. It can come in many forms, like tariffs or subsidies or specific quotas (for example, in Canada, various media like television must have a specific amount of content made in that country). The French went even so far as to declare certain classifications of spirits and wine as part of some national heritage which under some laws gives specific products certain rights.

The United States does not have an industrial policy, well not as far as I can tell since Reagan (though I suspect even further since then). We've operated on a free trade hands off policy with regards to our industries. Because of this, this nation has allowed manufacturing to be shipped overseas and products once made here substituted with those made in lower-cost nations. Now, the apparant benefit to this, so goes the claim, is cheaper products. Also, by binding us to various free trade deals, we were sold the idea that our manufactured goods would be open in markets to Asia. To date, this has not really been the case, indeed it has been heavily one-sided. Remember, our partners aren't playing by not only the same rules but by an older playbook that we abandoned. Do yourself a favor and look up Alexander Hamilton's Report on Manufacturers. It's a quick read, basically not even a pamphlet. But it's the same material that the Chinese learned from and others, it's the same playbook that is eating our lunch.

I hope I answered your question. It can be touch to see jobs lost to automation, but it will happen regardless. A dear friend of mine who I knew in grade school, his father worked for GM as a worker on the line. Well the plant (they made sedans) went from being majority humans putting those cars together, to over half the product being assembled by robots. Now this man had two choices, he could take unemployment or he learned how to maintain the robots. Luckily he chose the latter, but this highlights how humans adapt to such progress.

Posted by Johnny Venom on Oct. 24, 2010 @ 11:16 am