What (or who) destroy jobs

[tw]

Common sense proves reality. ATMs cause bank tellers to lose their jobs. Telephone switching equipment put operators into unemployment.

From the Economist of 15 Jun 2011:

... right-of-center bloggers link[ed] gleefully to ... the hoary fallacy that machines create unemployment, ... As it happens, theory and reality agree in this case. ATMs have not in fact displaced bank tellers. According to this 2004 Charles Fishman article in Fast Company:
At the dawn of the self-service banking age in 1985, for example, the United States had 60,000 automated teller machines and 485,000 bank tellers. In 2002, the United States had 352,000 ATMs and 527,000 bank tellers. ATMs notwithstanding, banks do a lot more than they used to and have a lot more branches than they used to.

How can this be? If work takes less employees, then fewer jobs exist. A classic example of how Limbaugh, Fox News, Trump, and other extremists manipulate the least educated among us. We know from economic history that less workers on every job means more jobs. But those using common sense and soundbyte logic (those manipulated by extremists) would never understand.

From the Economist of 15 Aug 2015:

Angst about automation typically focuses on the substitution effect, whereby jobs once done by people are taken over by machines—the fate of the Luddites. The current fear is that ever more versatile robots will substitute for labour on a scale never seen before. However, previous experience shows that focusing on substitution shows only part of the picture. According to David Autor ... those with a gloomy view of automation are disregarding the many jobs that come into being thanks to the existence of whizz-bang new machines. Only that ... can explain why the share of America's population in work rose during the 20th century despite dazzling technological advances, or why the drop in agricultural employment, from 40% of the workforce to 2%, did not lead to mass unemployment.

Between 1980 and 2010 ... the number of bank clerks in America actually increased despite the rapid spread of the cashpoint. That was because the IT revolution not only enabled machines to dispense cash; it also allowed clerks to work out what extra financial products customers might be interested in and process applications for them. The new jobs that technology makes possible ... more than compensate for those lost through substitution. It is just easier to identify the disappearing but familiar occupations than it is to foresee the new ones created in their stead.

Bottom line. If spread sheets measure value of a job using monetary benchmarks, then jobs can be destroyed. If jobs and machines are measured by value, then jobs are created. That is the problem. Concepts taught in business schools cannot measure value or productivity. If a worker works less hours, does that means he is more productive? If costs are reduced, did productivity increase. No such relationship exists. Value does not appear on any business school parameters until four or ten years later.

If bosses do not come from where the work gets done (as routinely demonstrated on a CBS TV show called "Undercover Boss"), then jobs will be lost four or ten years later.

When business school graduates blamed workers and forced a faster assembly line, then American cars sucked while quality decreased. What did patriotic Americans in Japan and Europe do? Replaced workers with machines - so that workers could work just as slow, make a better product, could innovate, and deserved higher pay. Those machines also made possible advances such as cars that never need wheel alignment, tune ups, and other once expensive and now unnecessary maintenance. IOW jobs increased because fewer employees made a superior product. And because they did not use business school logic; instead learned from people who come from where the work gets done such as W E Deming.

That is the difference between Luddites who use soundbytes and wacko extremist rhetoric to fear enemies everywhere (ie immigrants). These same people were also told Saddam had WMDs. That soundbyte alone proved it was true. Verses moderates (patriotic Americans - no matter what their national citizenship) who first learn how stuff really works while ignoring soundbyte logic.

[tw]

Simple math demonstrates the concept. One can manipulate a naive public by simply doing what a dirt bag (Carly Fiorina) did in the HP-Compaq merger meeting. Her constant reframe was "If we do A then we will get B". IOW if we are #1 in this industry, then we will be more profitable. That assumes basic concepts taught in high school algebra and drilled into the brains of business school graduates.

Take this simple equation:
Y = M - 1/X

So we assign M=0.65 to define parameters of our economy. When we do X=2 business, then Y is always .15. A simple open loop relationship that always holds true when our economy is 0.65.

Or we can change the rules so that our economy is M=2. Then we do X=2 work, then we get Y=1.5 results. That always holds true. When we do X=3 business, then our corporate results are 1.66667 . Results remain constant whenever we do the same X=??? work.

Now for reality. The world is never an open loop system. The world is a closed loop system. Back to original market parameters: M=0.65
When we do X=2 work, then the Y results are Y=.15, then Y=-6.01666, then Y=.816205, then Y=-.5751826 ....

How can this be? Carly Fiorina told us the result for X=2 work would always be 0.15. But in a closed loop system, we get both profitable (positive) and recessionary (negative) results? Economies are dynamic - closed loop systems. Not the open loop systems preached as soundbytes to our lesser educated citizens.

Welcome to how the world really works. Nothing in an economy is an open loop system; as extremist such as Limbaugh would tell our least educated.

Due to a closed loop system, we have learned that higher wages among the lowest paid workers increases economic activity and lowers costs. If using an open loop "X leads to Y" interpretation, that cannot be true. But the world is a closed loop system - dynamic. Higher wages among bottom tier workers can create lower costs, greater economy activity, and more jobs.

Are you easily brainwashed by extremist politicians who promote open loop thinking. Or are you a moderate (therefore educated) who apreciates how close loop systems work?

[classicman]

"If bosses do not come from where the work gets done (as routinely demonstrated on a CBS TV show called "Undercover Boss"), then jobs will be lost four or ten years later."

snicker.

[Happy Monkey]

The problem is that, often, the people who do the job have no desire to do the management. So, while MBAs might do the job poorly, at least they're willing to do it.

[BigV]

That's definitely not *the* (singular) problem, but it's a problem.

One of the things I find most refreshing about my work at the oil change outfit is that the general manager knows everything about my job, can do every task my job entails, and does, each day, perform the duties of any of the roles of the crew. I respect him a great deal for this reason. It has been decades since I've had a manager that actually knew what I did in my job, and the appreciation for the quality of my work that knowledge provides him shows in his interaction with me. I don't mean he's all warm and fuzzy and showers me with praise, no, no. Just that when he does offer his constructive criticism, I know he knows what he's talking about. He has credibility. In addition, he's a good manager on a personal level. He's fair, he's an effective motivator, and the shop is the most profitable in the district, so, he's getting the job done.

But I must reiterate, the skill "managing people" and the skill "doing xyz job" are rarely the same thing, and very, very few people have both.

[DanaC]

At one time though, people who wanted to be managers, first got jobs in the industry in which they wanted to build their career. There will always be people who want a management career - and some sort of training in the specialist skills that successful management requires is definitely a good thing. But divorcing it from experience of the industry at other levels can make for shallow management approaches, that are far more grounded in management theory than in the realities of the specific industry or company.

[xoxoxoBruce]

Not only that, Dana, but also anyone starting at the bottom, or anywhere on the ladder, know the top of the ladder is unattainable because it's reserved for business school grads. Since they can't climb why bother to exceed expectations.

[DanaC]

Also a good point. That said - not sure how things are playing out stateside, but over here a bit of a shift seems to be happening. I think it is a reaction to the rising fees for university and the shift from student grants and loans packages to just student loans, which means leaving university with debts of £30-40k. At the same time some industries seem to be trying to bring youngsters in from alternative streams, possibly reflecting a lack of preparation for those who go through university courses for those particular fields.

The balance is still very much skewed to graduate recruitment, but I've certainly noticed a real change in the terms of discourse around education and career options for my nieces and their friends. Amelia did in the end opt for university, but she explored several possible routes into design industries and there were far more options than I'd have thought, or that would have been available ten years ago. Not sure what Soph will decide, but I think she's always been more into the academic stuff than Meels - even she has been looking at different routes though. That those routes appear viable suggests that employers are opening up a little, presumably as a way to tackle the skills deficit.

They all seem very aware of the financial implications of university study and they give careful consideration to the pros and cons of university versus other routes in terms of career options and earning potential, and starting their career in debt.

[xoxoxoBruce]

I hope your personal experience translates to a larger trend, and hope it will here, also.
When my mother reached High School level(grades 9 through 12), in the late 1930s, there were three choices.
1- Trade High, learn a skill to make a living, (very limited choices for girls).
2- Commerce High, to prepare for the business sector(of course girls could only learn secretarial skills), and
3- Classical High, to prepare for college.

When I reached that level in the late 1950s there was one High School, preparing everyone for college. Not even separate courses for kids obviously on a different tact, fuck those losers.

But many parts of the country didn't have their head up their ass, and retained Trade High Schools, knowing full well the affluent college graduates would be in deep shit without the butcher/baker/candlestick maker. But even there, as more kids were expected to go to college except the ones with relatives in the trade unions or a business, the Trade High Schools suffered declining enrollment and combined to become regional schools. But people had less interest in financing schools that became magnets for students that were poor, or Negro, or immigrant, so they faded too.

Apprenticeships, where you could make a meager living while learning a craft/trade, became a quaint footnote to history. Now unpaid internships are in vogue, as a replacement for slavery.

It's really hard for a kid with brains and talent to succeed if they don't fit the one-size-fits-all mold.
WANTED, 20 to 25 years old, with 50 years of experience, and PhD in a related field.
And the rest... fuck those losers.

[DanaC]

Unpaid internships are a thing over here too. Especially in some fields - law, for example, is notorious for it.

[glatt]

We have had unpaid interns working for us in the past, and they are WAY more trouble than they are worth. We stopped offering them.

The kids know nothing and by the time you explained what you wanted them to do, you could have done it yourself. By the time they actually learn anything and can start to pay your training investment back, the internship is over. Plus they have this attitude that since it's an unpaid internship, they shouldn't have to do only tedious work. There should be fun work mixed in too. But it's a freaking law firm. It's all tedious work.

[classicman]

We have a couple unpaid interns during the summer ... For the most part they show up late whining. Complain about everything, text throughout the day ... they do basically nothing and then leave early. I think the company gets a tax break or something.

[DanaC]

I thnk a lot of the unpaid interns here work really hard. I know some who work unpaid at one job during the day then go work for crappy pay at a bar in the evening.

I suspect there is a big difference though between the kids with connections and the ones making their own way.

[classicman]

My son did an unpaid internship for college. He worked 250 hours over 10 weeks. He worked at a crappy bar at night making $200-300 cash. Not such a crappy gig after all.
If only I could stay awake after 10pm ...

[it]

Wasn't a big part of the separation between management and workers a result of globalization? You've outsourced your factories to China and customer services to India and R&D to Singapore, making it harder to get local people with experience within your industry, but you still want a local management team at the top, so you shift your credential requirements to focus on management itself.


Honestly though, the general trend seems to be keeping human faces at the front, replace the workers at the back. People want a human lawyer, but they don't care if she employs legal research teams or runs a software. They want a human sales clerk in the store, but they don't care if the warehouse the store get its supplies from is so reliant on robots it doesn't bother to install lighting.