Updates from July, 2011 Toggle Comment Threads | Keyboard Shortcuts

  • Pat 2:02 pm on 21 July 2011 Permalink | Reply  

    Did you know there is a North Carolina Peace Prize? I had no idea.

    I guess it makes sense to honor the people who are preventing wars in NC. They must be doing a good job; we haven’t had a war here since 1865.

  • Hober Short 11:03 am on 21 July 2011 Permalink | Reply  

    I went and found the article that was the subject of some discussion last night about technological change and unemployment. Before I quote and link, let me say two things.

    First, a definition of a term used in the article: “natural unemployment” or “structural unemployment” is a phenomenon observed in economic studies that denotes the amount of unemployment that is present even in the best of economies. There are always people looking for jobs, having newly entered the workforce or quit some other job. Since there are unavoidable (“structural”) factors that prevent someone from getting a job the day they start looking (searching, networking, interviewing), there will always be a certain level of unemployment.

    The interesting thing about structural unemployment is that no one predicted it, it was simply observed as an economic constant. There are no universal ideas of what causes it or reduces it, but it is common to speculate that it may be increasing or decreasing, as this article does toward the end. (As an aside, the now-universal idea of structural unemployment was developed by Milton Friedman and Edmund Phelps in the Sixties. As a discipline, economics is still quite young.)

    Second, this article can certainly be read two ways: one is somewhat kinder, and the other is rather luddite. The author repeatedly says things like “blame Microsoft” or “blame Amazon”, which some people could take as an invitation to interfere with their business to bring down unemployment. However, I don’t think that is the author’s core assertion; I honestly think he is just pointing out groups that are inadvertently contributing to the problem.

    Now, to the quote, which, I think, reinforces what I was saying that at the very least, we can identify regime uncertainty and technological improvements among other things as contributing to the persistently high unemployment.

    Growth is anemic. The uncertainty in the current business environment is holding a lot of us back from making the investments that we’d like to make. And regulations and the prospect of more regulations, let alone higher taxes to pay for our country’s deficits, are giving many of us cause for concern. For that we can certainly blame many: our politicians, the government, the banking system, the media…even ourselves.

    But it’s not just that. In fact, one of the biggest reasons why you don’t have a job (and the prospects of finding a job are not encouraging) can also be blamed on someone else: Microsoft. And other technology companies like them.

    It’s a pretty short article, so I encourage you guys to read it through to the end, if only to get the full flavor of the author’s argument, instead of my simulacrum of it.

    • Bartholomew Xerxes Ogilvie, Jr. 1:17 pm on 21 July 2011 Permalink | Reply

      Yeah, the tone of the article, which the author presumably chose in order to make the it more eye-catching, unfortunately obscures his point. To say “blame Microsoft” implies that this technology effect is a problem that needs to be fixed (or a wrong that needs to be righted). Instead, he’s just making the very reasonable (and allegedly obvious) observation that businesses can now do more with less, and the current economic climate makes them more interested in doing so.

      But he also rightly points out that this does not mean a net loss of jobs. Heck, this is my livelihood: I work for a company whose entire business model is based on the idea of helping other companies use technology to work more efficiently (i.e., with fewer people). In the long run, Rite Aid might need fewer cashiers, but Microsoft and Amazon and IBM and all of those other companies are going to need people to develop their products and services, and invent new ones.

      But yeah, some jobs are going away forever. Emerging opportunities in the field of cloud computing aren’t really much comfort to someone who’s looking for a cashier gig.

    • Bartholomew Xerxes Ogilvie, Jr. 9:40 am on 22 July 2011 Permalink | Reply

      On the other hand, there’s this: http://pajamasmedia.com/instapundit/124752/

      I didn’t even think about that aspect of it, because I’m antisocial enough to prefer automated checkouts. But not everyone does, and even I won’t use a self-checkout lane if I have multiple bags’ worth of groceries.

      Automation can eliminate a lot of jobs, but in service industries, there will always be things that machines can’t do — at least, there will be as long as there are customers who will pay to have a human help them.

      • Hober Short 9:44 am on 22 July 2011 Permalink | Reply

        I think the misleading part is the idea of “full price” as a fixed constant (see also: minimum wage, price ceilings). Presumably, the prices would be higher if Kroger had to pay an extra employee. If not for the self-checkouts, they would be paying even more than “full price”.

        It all gets back to Bastiat’s What Is Seen and What Is Not Seen.

        • Bartholomew Xerxes Ogilvie, Jr. 10:12 am on 22 July 2011 Permalink | Reply

          That is a good point. The best analogy I can think of is gas stations; I can remember a time when most gas stations offered full-service pumps, with the price a couple of cents higher per gallon. Presumably there were some old-school customers who didn’t want to get their hands dirty and were therefore willing to pay the higher price. But that was presumably a small and shrinking market, and I can’t remember the last time I saw a full-service gas station outside New Jersey (where self-service pumps are illegal).

          I suspect it might be a little different in grocery stores, since bagging a lot of groceries is really a pain in the butt (and doing it well is a skill). But grocery stores don’t charge different prices for self-service and full-service lanes. So even if they keep their prices lower by using fewer cashiers, that’s not obvious to customers, who are still paying “full price.”

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