I recently listen to some experts talk about job creation. I have thought for some time that most of what is offered about job creation is naive nonsense. Here's why.
First a bit of history. Consider farm jobs. Today there are less than half as many farm jobs as there were in 1900. That's fact. Why? It turns out that two factors drove that change. Better farming practices, better seeds, better fertilizer, a better understanding of how to farm had a major impact. The other and more significant driver was automation, better farm machinery. This is an example of jobs where there is no realistic possibility of bringing these jobs back. Farmers are simply not going to abandon the machines that make modern farming work. Those jobs are gone and are not coming back.
The impact of automation can be seen elsewhere in the economy. Consider that over the last 25 years US manufactured goods exports have more quadrupled! Meanwhile the portion manufacturing jobs to all jobs in the US has dropped by more than 50%. Simply put, automation has meant that fewer people produce much more product. Manufacturers are simply not going to abandoned efficient competitive practices to create new jobs. The manufacturing jobs replaced by automation are simply gone and are not coming back. That said it should be noted that manufacturing jobs are in fact growing particularly among small manufacturers as manufactured goods exports continue to grow particularly among free trade partners.
To date, automation has substituted machinery for human labor as in farming or sell structured activity as in assembly lines. We are now starting to see automation impact less well structured jobs. Machine shops are a good example. There are several machine shops near my home that now employ less than half as many machinist as they once did since adopting CNC machine tools that allow a single person to do the work of many even when that work is both highly skilled and less well structured. Those jobs are gone. Work in that segment will require new skills in CNC tool use and growth in the demand for low volume CNC manufacturing.
There is a new and dramatically more disruptive automation on the horizon. Several firms are testing self driving cars. The impact of this technology goes well beyond professional drivers in two ways. First it promises to be disruptive of the transportation infrastructure generally. Why should I take a train when I can use a self driving car to go directly from where I am to where I want to go? For that matter why should I even own a car when one will come for me when I need it?
Second, and more importantly, it is an example of automation of a highly unstructured activity! If you can make a self driving car operating in a mixed ill structured world what then can not be automated?
All of this raises the issue of what happens when there are simply not enough jobs for those that want or need to work? Society has been organized around work for almost all of human history. What happens when work as an organizing principle is no longer essential?
