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current economy

One of the purposes of the Patch is to discuss and engender responses to issues effecting the community.  There is an enormous elephant in our living room that we don't talk about at a national level that effects our community, specifically the constant high levels of unemployment and underemployment despite extensive fiscal and monetary efforts to ameliorate the levels.  Wearing my hat as a trained economist and economic sociologist I suffer from the ear worm from the Depression, 'Nice Work if You Can Get It'.  The nasty conclusion I've realized is these employment difficulties are a permanent feature of our lives for now and the immediate future.

We are in the midst of worldwide social and economic changes unparalleled in history and more reaching than the industrial revolution.  The latter occurred over multiple generations in different places at different times.  The current change is occurring within a generation at all locations simultaneously.

One of the ways of explaining this is to use the idea of POET: Population, Organization, Environment and Technology.  All four work together with beneficial, benign and sometimes malignant effects.  For example, increases in population require sanitation measures and new technologies may result in cheaper goods but also pollution.  

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A recent Time magazine cover story indicates how new technologies result in increased manufacturing in the United States with a new factory organization. What the article ignores, and what needs to be explicitly recognized, is the fact there are not enough job vacancies to be filled even considering the number of individuals properly trained to fill the vacancy. New vacancies usually are of lower pay and benefits than the vacancies created by reductions in staff.  We are in the weakest employment recovery since the Great Depression.  We need to think of vacancies created at a given rate and the necessity to fill the vacancies.  We also need to realize vacancies can increasingly be filled worldwide at lower economic costs.

This can be explained by going back to POET.  Technology and the trend toward universal education has resulted in a 24/7 world wide labor force that can be virtually organized independent of the local labor market or geography.  We have seen this on a smaller scale in farming in the last hundred years.  We are now in the era of the automated factory that can be controlled by humans anywhere and information living anywhere and being developed and monitored from anywhere at any time.

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The number of jobs requiring face to face contact is concentrated in low level services, with some better jobs in repairs, electricians carpenters, Heating Ventilation Air Conditioning (HVAC) and medical and associated ancillary care requiring direct contiguous face to face client to practitioner contact.  The jobs that emerged in the skilled services sector, with the exceptions of classified Government work, can be performed anywhere, including increasingly more sophisticated services like finance and accounting. Near term advances in holographic technology will become a de facto face to face services.  Early examples of this are found at airports, the television commercial indicating education to a remote student via a robot with a classroom display and the cable show with therapy via Skype.  Control can come from anywhere and code written from anywhere.

The horrid reality is there is not enough vacancies to reduce unemployment and underemployment.  The beneficial flip side of this reality is the lower cost of services and consumer goods.  The United States is a consumer and not a saving and investment society.  Automation and foreign production of goods result in lower cost consumer goods.  The shirt you wear and cup containing your coffee are products of modern forms of technology and organization.  The screen displaying this blog is not necessarily made in the United States or supported by drivers written here.  The shirt, cup, screen and associated software would cost more if made in the US with US labor.

We also need to consider education costs: whose responsibility is the cost of training everyone in the specialized skills required to fill vacancies?  Even if the training is available, not everyone has the aptitude or talent to be trained in highly specialized and technical work.

We live in the age of the myth of the middle class including job security and increases in the standard of living.  This started around the end of World War Two and petered out with the burst bubbles of dot coms and real estate.  The middle class appears to be gone.  

I estimate it will take thirty years to right the economic ship.  We are only beginning to realize policies of cheap money or make work projects don't work.  This is not to say there are critical areas needing work, especially our infrastructure.  We understand who will benefit, but who will pay?

Please send me your responses.  I'll outline some possible solutions, with pros and cons, in the future.  We want whole, real jobs, not jobs making a hole and others filling in the hole.

 

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