The End of Jobs

No this isn't a blog about the charismatic CEO of Apple Computer. Its about work. Rather how we work. The need for workers. The end of an era.

Today it was announced that worker productivity increased 6.4%. The largest increase in six years. So what's the big deal. People are working harder to keep their jobs, you may think. That's a good thing or, at worst, a minor economic statistic. Right? I suppose it depends on your point of view. Lets look more closely at this paradigm-shifting trend.

Back when I was studying for my doctorate in Management of Technology, I learned that as new technologies are introduced into the marketplace, efficiencies increase. Incrementally, it became relatively easy for four workers to produce what it took 5 workers to produce in the past. The new workers had better tools. It was expected. Historically, this was a very good thing. Companies became more profitable. Stock prices went up. We could produce more food, goods and services to meet the needs of an ever growing population. But now we have reached a level of automation which is allowing companies to produce more with a relatively sparse work force.

I have experienced this phenomena first hand. In 1999, I founded a company called CEU.com, an Internet education company that provided continuing education courses and credit to insurance professionals. We had about five employees at first and served, on average, 200 customers a month. Today we have seven employees and we service 2000 customers a month. If and when it grows to service 20,000 customers a month, the company will only need ten or eleven employees to keep things humming.

Lets look at this on a macro scale. If other companies are also finding the Internet and other technologies are allowing them to meet demand with exponentially fewer workers, then the need for humans in the workplace will decline overall at an alarming rate. Suddenly, efficiency is going to create a massive social problem. The US, in essence, will need, not the approximately 100 million jobs it provides today, but at best, 50 million or even less.

The minds of economics always assumed that there would be a migration of factory jobs to the service sector and that has been born out. No need to worry. Although most politicians focus on the migration of jobs overseas, its really automation and the corresponding productivity increases that are causing this decline. But worry we must. Now the service industry is finding all kinds of savings through the use of technology. There are fast food restaurants that are completely automated. Education can happen much more efficiently over the web (e.g. CEU.com). Even health care can provide on line diagnosis and treatment through remote medical servicing. Then you have online pharmacies and other management efficiencies as well. Of course we'll still need nurses, school teachers, doctors and lawyers in great numbers, but not in the kind of numbers we required in the past. Beyond a doubt, the net number of jobs needed will decline markedly. This current economic recovery could be the first "job shock" of many to come.

Lets extrapolate out what this will mean from a social and economic perspective. Most manual labor jobs will disappear. Many professional jobs will decline as well. Think programmers (surprisingly IT work will decline as do-it-yourself programs predominate), editors (book and news media), managers in general and, most obviously, journalists. Think what must be going through the mind of a 2009 graduate from a Journalism program. She applies for work and finds hordes of experienced out-of-work journalist competing for the trickle of low paying jobs.

In the future, "a real job" cannot be made available for every qualified individual. A job can no longer be the center of our lives since so many of us will not have one. It can no longer be the source for our health care, material needs, retirement nest egg or the way we spend most of our time.

Now is the time to begin thinking about a country in which only half of the working age people are needed to do the jobs that need to be done. What then will the other half do? I do not presuppose to have the solution. But it will mean that Laissez faire capitalism, as we know it, will no longer work. It will had run its course. Money will become more and more concentrated in the hands of the relatively few owners and controllers of the means of production. Does this language bring to mind any images. How about Karl Marx? What goes around, comes around.