Jobs lost from automation?

[empyblessing]

 

If you look at a demographic breakdown of the Japanese population, you'll notice that the bulk (60%+) of the people are past or nearing retirement age.  Additionally, the birth rate is below the replacement rate.  In fact, there is a larger percentage of the Japanese population moving into retirement than there is of the American population.  Ordinarily, the older people own businesses which the younger people operate to make a living.  Sometimes that ownership is abstracted through investment vehicles (retirement accounts or national pensions).  Now, Japan has a problem with that arrangement.  Namely, young people are in increasingly short supply.  There is no abundant source of youth labor for Japanese industry to consume.  As a consequence, Japan is the world leader in the manufacture and development of capital which replaces low-cost youth labor.  Also, young Japanese workers tend to start at a higher wage (relative to the national average) because there are very few low-skill positions available.

Like I said, when the labor isn't there to use, capital develops to fill the void.  Honestly, not having children (or having no more than one child) is the best thing anyone can do to create an economic incentive to improve the overall level of automation in society.

 

Would China's one child policy support the same advance? Especially considering it's surplus of males who are more likely to be interested in computes and machines. 

[Arius]

Unfortunately, I don't think it has.  China implemented the policy through draconian measures.  That is, it wasn't that people preferred not to have more children...  In fact, as most of China was agricultural at the time the policy was implemented, there was more than enough demand for children.  China isn't aging the same rate as Japan or the US.  Most people in china are either between 20 and 30 or 40 and 50.  All of them are still of working age.  What you need for youth-labor to become exceptionally valuable is an excess of post-employment people when compared with the number of employment-age people.  Basically, the older the average individual in a population is (and the more of the total population which is past retirement), the more valuable youth-labor should be.

China went about slowing population growth in completely the wrong way.

My guess (IMHO) the Chinese haven't had access to birth control long enough for people to think of reproduction as a choice.  From what I can tell, it takes two generations of highly available birth control (not prophylactics or surgery, but pharmaceuticals) before a society throttles-back on producing children.  I'm not sure that the availability of birth control and reproduction rates are causal or just corollary, but my gut tells me that it's causal. 

[empyblessing]

 

Unfortunately, I don't think it has.  China implemented the policy through draconian measures.  That is, it wasn't that people preferred not to have more children...  In fact, as most of China was agricultural at the time the policy was implemented, there was more than enough demand for children.  China isn't aging the same rate as Japan or the US.  Most people in china are either between 20 and 30 or 40 and 50.  All of them are still of working age.  What you need for youth-labor to become exceptionally valuable is an excess of post-employment people when compared with the number of employment-age people.  Basically, the older the average individual in a population is (and the more of the total population which is past retirement), the more valuable youth-labor should be.

China went about slowing population growth in completely the wrong way.

My guess (IMHO) the Chinese haven't had access to birth control long enough for people to think of reproduction as a choice.  From what I can tell, it takes two generations of highly available birth control (not prophylactics or surgery, but pharmaceuticals) before a society throttles-back on producing children.  I'm not sure that the availability of birth control and reproduction rates are causal or just corollary, but my gut tells me that it's causal. 

 

Does japan "import" a lot of young employees from other countries? 

[Arius]

Japan outsources some of its crappier jobs to nearby, poorer Asian countries.  Unlike western nations, Japan is still pretty xenophobic.  Perhaps the average citizen is cool, but the government is very anti-foreigner.  Especially when that foreigner is poor.  Most of the imported labor (citizenship-for-labor) is white collar jobs.  Also, Japan has some pretty strong anti-immigration laws.

There's also the problem of how job progression works in Japan.  In America, there's lots of horizontal movement in the employment market.  That is, people may do the same job at several different organizations over the course of a career.  In Japan, there is a standardized national test which kids take in high school.  It determines which positions they enter as adults.  There is almost no lateral movement.  Many people (in the mid-income range) in Japan work for the same company for their entire lives.  There aren't very many opportunities to transfer foreigners into mid-level positions (blue collar supervisory).  The Japanese labor market just isn't structured to accommodate importing workers

.

[empyblessing]

http://singularityhub.com/2009/12/15/martin-ford-asks-will-automation-lead-to-economic-collapse/

"The Lights in the Tunnel goes on to predict some pretty awful results from this widespread automation. With few high paying jobs, there will be less people able to buy goods. Sure, a few robotics corporations and software companies will create a new generation of trillionaires, but the number of consumers with middle class purchasing power will diminish. People will sense that purchasing power is dropping and consumer confidence will also decrease. Eventually all the wealth will be consolidated in a relative few, but with no one to sell to, those wealthy will struggle as the economy continues to wither."

[empyblessing]

 

Japan outsources some of its crappier jobs to nearby, poorer Asian countries.  Unlike western nations, Japan is still pretty xenophobic.  Perhaps the average citizen is cool, but the government is very anti-foreigner.  Especially when that foreigner is poor.  Most of the imported labor (citizenship-for-labor) is white collar jobs.  Also, Japan has some pretty strong anti-immigration laws.

There's also the problem of how job progression works in Japan.  In America, there's lots of horizontal movement in the employment market.  That is, people may do the same job at several different organizations over the course of a career.  In Japan, there is a standardized national test which kids take in high school.  It determines which positions they enter as adults.  There is almost no lateral movement.  Many people (in the mid-income range) in Japan work for the same company for their entire lives.  There aren't very many opportunities to transfer foreigners into mid-level positions (blue collar supervisory).  The Japanese labor market just isn't structured to accommodate importing workers

.

 

One test determines your whole life. Talk about some pressure. 

[SaintElsewhere]

Jobs lost from automation?

 

Isn't this like saying "Jobs lost from efficiency?"

 

https://smilingdavesblog.wordpress.com/2013/02/14/how-mises-dismissed-that-whole-keynesian-thing-with-a-decisive-one-liner/

[SaintElsewhere]

Economic theory, well Austrian anyway, basically says that in a free market it doesn't matter how efficient or autonomous productions becomes. People who fear this are essentially fearing more wealth and capital flowing into the economy. The wealth of a nation is in goods and services. This guy explains better than me.

 

To understand why, let’s imagine that a bunch of Aliens came down from Mars to Earth. They are from the Planet of War, and have admired the way mankind has been killing itself more and more bloodily for less and less reason. Out of sheer respect for our murderous ways, they volunteer to be our slaves. They go out and pick the cotton, wait on tables, and do a lot of things for us, all for free. Being Martians, they don’t eat Earthly food or consume any Earthly products.

And here comes Devil’s Advocate, again. Just when I was warming to my topic.

DA: von Dave, are you saying von Mises wrote about Martian slaves?

SD: No, von Devil, it’s me. I’m describing a thought experiment. You know, like Einstein did for physics.

DA: Oh, I see. von Einstein made this up.

SD: Whatever. Since you’re here, Devil, tell me. What effect will these Martians have on the economy?

DA: They will be great for the economy. Economists of all schools agree that if you increase production, as these loyal slaves are doing, that’s good. More goods, more capital accumulation, it’s great.

SD: What about the fact that they aren’t eating or consuming anything at all?

DA: Are you kidding? That’s what makes them so good for the economy. They produce and produce, making us all richer, and take nothing back in return.

SD: But they aren’t contributing to Aggregate Demand. Isn’t that a problem?

DA: Dave, how foolish can you be? You know what they call demand in the movies? “Another Mouth to Feed”. If those Martians start consuming, there will be less for us Earthlings.

SD: OK, Dev, thank you. You just disproved Keynes.

DA: What?

SD: Keynes is describing a situation exactly like the Martians coming here to be our slaves. He says that for some reason or other, a lot of Earthlings have decided to become Martians and work for free. They are producing but not consuming. Instead of spending their money [=consuming] they are hoarding it [= not being mouths to feed]. Just like the Martians, they are making us all richer. They produce, but don’t consume. They increase our Capital Accumulation by working, and don’t decrease it by spending.

DA: von Dave, you are losing your touch, no offense. The Martians did not eat, but they did not get money either. The Earthlings aren’t eating, but they are getting money. That’s the problem. Money is magic. It is the gasoline that makes the automobile called the Economy run smoothly. By hoarding their money, they are clogging up the works.

SD: They aren’t clogging anything. Say the money has disappeared, never to be seen again. So what? The nation is neither richer or poorer by that. The wealth of a nation is its goods and services. Money is just a measuring stick for that.

DA: But if money disappears, then by the laws of supply and demand, the purchasing power of money will increase. Those guys who buried their money have made our money worth more.

SD: You say that like its a bad thing.

DA: But what about the fact that the earthlings who work for free aren’t buying anything? Won’t that mean that even though the nation as a whole is wealthier, because more capital has been accumulated, there will be one bad side effect? Doesn’t it mean manufacturers will lose money, because they aren’t selling to the Earthlings turned Martians?

SD: There may be an adjustment period, sure. No economy is static, anyway. What is produced, what jobs people have, has to change constantly, and does. But bottom line, there is only one thing that counts. If an economy increases its capital stock, it is richer. Its future is brighter than before. There will be more jobs, there will be higher wages, there will be a higher standard of living. That’s what capital accumulation does.

It is madness to call that a problem, and to brew some mad scheme to reduce the capital stock. If someone hoards money, that means he’s essentially working for free, and voluntarily to boot. Like the Martian, he is increasing the capital stock without being a mouth to feed who will reduce it by consumption.