"Our recession reflects more than just banking errors; our entire system is recalibrating and adjusting to long-term changes."

The world’s population is expected to reach 7 billion later this month.  In addition to the obvious strains this growth will place on housing and food systems, what does this mean for job markets in the 21^st century?

Supply side economists argue that growing consumer bases provide a plethora of new opportunities and demand for products.  While commodity and housing prices show the truth behind this, not as many people acknowledge the effects technological changes are having on our workforce.  Just because consumer demand increases, does not mean that labor demands will increase as well.  We are already witnessing an increased reliance on technology to increase efficiency and to meet mass production demands.  As businesses designate more tasks and jobs to computers, human laborers simply become expensive and obsolete. 

Right now our recession reflects more than just banking errors; our entire system is recalibrating and adjusting to long-term changes.  Financial and housing markets were just the trigger for larger transformations afoot.  Just like outsourcing is our adjustment to globalization, resourcing our jobs to mechanized tasks is our adjustment to technology.

The Conservative, easy answer for current unemployment problems is that structural adjustment means that European levels of 9%-10% unemployment are the new natural state for the American economy.  Although I disagree with the notion that nothing can be done about these current hiring problems, I acknowledge that a full economic rebound may take decades.

In the 1970’s, Barry Bluestone and Bennett Harrison estimate, manufacturing flight (factory shutdowns, overseas relocation, and permanent physical cutbacks) led to the loss of 38 million US jobs.  But the economy bounced back.  And national businesses readjusted their focus onto the growing service sector.

Nations across the world must now redefine their economies and adapt to best utilize their own competitive advantages.  When Ford’s assembly line technologies made craftsmen obsolete, labor unions rose to protect the marginalized working class.  Today, the short-term effects of an economy-wide adjustment period will surely be damning for many.  But in the same way unions protected vulnerable labor sectors during periods of massive industrialization, we need a new “facilitator” to ease the transition to an economy confronting another technological revolution.

There is hope.

While world markets and populations continue to expand, global competition will continue to force rapid advances in mass production technologies (likely at exponentially faster rates than we experience today).  Long-run inefficiencies correct themselves with devastating structural mood swings (the current recession couldn’t be a better example).  In the meantime, a short-run solution is needed to ease the displaced labor force’s transition of learning to work with technology instead of the labor force employing technology to do the work for them.


Here's a follow up published on October 23rd, 2011: More Jobs Predicted for Machines, Not People

"Our recession reflects more than just banking errors; our entire system is recalibrating and adjusting to long-term changes."