An Unemployed World (Part 1)

Introduction

In 1900, 41% of the workforce in the US was employed in agriculture. This number has decreased to less than 2% in the beginning of the 21st century (http://www.ers.usda.gov/media/259572/eib3_1_.pdf). Yet, the productivity of the American farmer has increased so that there is no shortage of food, and, in fact, the USA is still a large supplier of agricultural products to the world. The main force behind these rapid changes and that allowed such an incredible growth in productivity is technology and automation.

Following the recent economic crises, a similar trend can be seen in other fields of the economy. For example, the share of the manufacturing sector in the overall employment has decreased since the 1970s, and while during each economic crisis in the US people were laid off, these jobs never came back to the US.

Manufacturing Jobs in the US, 1980-2013. The image was taken from http://media.npr.org/assets/img/2012/10/17/manufacturingshare_custom-abc7c2f2e24638873a2a2e18877ee41fc5aac45a-s40.png

Recent data has shown that overall in the US, workforce participation has decreased to its lowest level since 1979, which is particularly alarming since women participation in the workforce is higher than it used to be 50 or 100 years ago.

Workforce Participation in the US, 1970-2013. The image was taken from http://www.npr.org/news/graphics/2013/04/pm-gr-participation-rate-624.gif

There are several reasons for this trend. First, some sectors, manufacturing in particular, are sensitive to low wages in other countries, hence these jobs are lost in the US, but are generated somewhere else. For example, Foxconn produces a large share of all the electronic gadgets in the world, with a workforce of more than a million assembly workers (http://www.economist.com/news/business/21568384-can-foxconn-worlds-largest-contract-manufacturer-keep-growing-and-improve-its-margins-now).

A second reason is the aging population. Not only has the Baby-Boom generation reached its retirement age, but the number of children per mother has also decreased over the decades since World War II. In the 1960s, an average woman in the West had about 3-4 children, but nowadays this number is 2 in the US and France, and less than that in the rest of the Western countries. And with longer life expectancy, this means more elderly (65 years or more) people per working age (20-65) people. This reduces workforce participation numbers, and exerts a strain on social safety nets. (http://www.npr.org/blogs/money/2012/11/29/166181293/the-birth-rate-just-hit-a-record-low-thats-bad-news-for-medicare)

There is, however, a third reason, which brings us back to the agriculture data from the opening paragraph: automation, technology, and robotics. Throughout history, jobs had been replaced by technology, and humans reacted by moving to different professions, usually ones that required more skills and less manual labor. Yet, it seems that recent technological innovations will drive human beings even from these skilled positions and out from the market altogether. While the other two trends (globalization and aging) may not affect the global unemployment rate (as a whole), this trend does have the potential of making, essentially, every human being unemployed (http://www.npr.org/2013/02/25/172900833/do-we-need-humans).

This leads to several social and economical questions:

1. How will human beings live in an unemployed world?
2. Can society evolve in such a way that unemployment is the norm?
3. What will the future of the economy be if everyone is unemployed and unemployment is the norm?
4. How will these changes affect politics and policies?
5. How will these changes affect education?

In the next part I will look at several technological innovations that drive this trend. Then, I will try to provide some possible answers to the questions listed above. I definitely don't have all the answers, and I hope that this can be a platform to start discussions, so I will love to get some comments about these thoughts.