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In 1930 Keynes wrote an essay called Economic Possibilities for Our Grandchildren which includes a short explanation of technological unemployment as a cause of the Depression. Here's a quote.
Quote:
For many ages to come the old Adam will be so strong in us that everybody will need to do some
work if he is to be contented. We shall do more things for ourselves than is usual with the rich
today, only too glad to have small duties and tasks and routines. But beyond this, we shall
endeavour to spread the bread thin on the butter-to make what work there is still to be done to be
as widely shared as possible. Three-hour shifts or a fifteen-hour week may put off the problem
for a great while. For three hours a day is quite enough to satisfy the old Adam in most of us!
Maybe not, given that we're still officially working forty hours a week or more. But are we really working? From my own experience, there's a lot of downtime in a lot of jobs, and some jobs are just fluff. Could BS jobs be a factor in the productivity slowdown that started in the 1970s?
Since 1970 productivity growth in the US has slowed down to what seems a permanently lower level than pre-1970. There was a brief resurgence in the 1990s because of IT but that has also subsided. Labor productivity, a part of total productivity, is defined as GDP per hour of labor. If indeed we are papering over technological unemployment with BS jobs, that would drag down labor productivity. In other words, is the decline in labor productivity growth since 1970 because of a smaller numerator, or a larger denominator?
Obviously eliminating BS jobs would not improve GDP. But it would have the effect of increasing labor productivity given that fewer hours would be pointlessly worked. Indeed France briefly saw this statistical effect after they went to a 35 hour work week.
So why was there a forty year gap between Keynes's essay and the beginning of the great productivity slowdown? WWII. Postwar reconstruction had largely concluded by 1970, and the world then reverted to the prewar condition of technological unemployment.
Just to clarify, there was a slowdown in labor productivity growth, a deceleration. Labor productivity continued to grow, but more slowly than in the mid-century period.
This slowdown in the rate of growth is studied by Robert Gordon, whose work on it has been well-received.
I'm not sure if total productivity growth slowed down as much as labor productivity growth, if at all.
Just to clarify, there was a slowdown in labor productivity growth, a deceleration. Labor productivity continued to grow, but more slowly than in the mid-century period.
This slowdown in the rate of growth is studied by Robert Gordon, whose work on it has been well-received.
I'm not sure if total productivity growth slowed down as much as labor productivity growth, if at all.
Thank you. I see what you mean. IMO there is little chance the economy could/can support long term real labor productivity growth over 3% (IIRC the post war through mid-'70s annualized number was over 3% forgive me if I'm wrong).
It would take another long wave event (white swan event(s)) to see numbers like that for long. Mr. Fusion/20 million BTU in an easily transportable and safe thimble.....easy space travel......maybe astonishing medical breakthroughs........the bottom 25% of able Americans suddenly adding instead of subtracting etc.
I've heard several explanations for the slowdown of productivity gain:
1. The easiest gains have already been achieved. The argument here is that automation of farm work and guild to factory is easier to massively improve output on than to improve on todays jobs. This is true to some extent but I don't think it's the only or even main factor.
2. Productivity is still rising, it's just harder to measure. Back in the day, people were making widgets per hour. Now they are making ideas per webex, and it's a harder to measure the quantitative improvements of information than of production. The argument is qualitative changes are still happening, they are just getting undercounted. So while more there's not a massive change in quantity produced, quality of the product and service of the seller has improved.
3. We've decoupled from growth from energy consumption. Back in the day, there was a linear relationship between energy consumption and growth, now that's broken down some where energy consumption has flattened while growth continues. So output may not be rising as fast, but production is being more efficient with inputs, so efficiency is gained here that isn't showing up in raw increased output.
As it relates to compensation, the wage stagnation isn't entirely accurate unless you factor in the total cost of employee and the increases in insurance and healthcare costs born by employers
Thank you. I see what you mean. IMO there is little chance the economy could/can support long term real labor productivity growth over 3% (IIRC the post war through mid-'70s annualized number was over 3% forgive me if I'm wrong).
It would take another long wave event (white swan event(s)) to see numbers like that for long. Mr. Fusion/20 million BTU in an easily transportable and safe thimble.....easy space travel......maybe astonishing medical breakthroughs........the bottom 25% of able Americans suddenly adding instead of subtracting etc.
I looked this up.
Total factor productivity growth since 1870 saw two main waves.
1870-1900 1.5-2% growth per year (first wave)
1900-1920 1% growth (the first trough)
1920s 2% (start of second wave)
1930s 3%
1940s 2.5%
1950-1973 2%
1973-1990 <1% (the second trough)
1990s 1%
2000s 1.5%
I've heard several explanations for the slowdown of productivity gain:
1. The easiest gains have already been achieved. The argument here is that automation of farm work and guild to factory is easier to massively improve output on than to improve on todays jobs. This is true to some extent but I don't think it's the only or even main factor.
I don't buy this argument. There will be easy gains in the future as new technologies open up new frontiers. How far out those are, no one knows.
Quote:
2. Productivity is still rising, it's just harder to measure. Back in the day, people were making widgets per hour. Now they are making ideas per webex, and it's a harder to measure the quantitative improvements of information than of production. The argument is qualitative changes are still happening, they are just getting undercounted. So while more there's not a massive change in quantity produced, quality of the product and service of the seller has improved.
I believe this about measurement. but I don't think it explains everything. Robert Gordon likes to use the example of home appliances, where the last major labor saving device was the microwave oven which started to spread in the 1970s. Otherwise we're living like our parents did.
I would also question improvements in information production. As an input, educational outcomes have saturated. The impact of scientific research is down, research keeps getting more expensive per marginal idea. Technology has become less groundbreaking and more incremental. Compare the advances in computing during the 1960s-1990s with the last twenty years.
I think all told the inability to measure the services sector as well as manufacturing explains a small amount of the decline in measured productivity growth.
I have been itching to post that vid up and get your opinions on it. I dont know why I havent yet. But this seems like a good a thread to do so as any.
I have been itching to post that vid up and get your opinions on it. I dont know why I havent yet. But this seems like a good a thread to do so as any.
It's absolutely true that many office jobs require few hours of actual work, and some may be entirely superfluous.
Has that number increased over the years? It's hard to say because BS jobs are hard to measure. Nearly everyone involved (workers wanting to keep their BS jobs, managers wanting to expand direct reports or not admit bad management, politicians wanting to maximize employment) is trying to hide that these jobs are BS.
I was working backward from the POV that BS jobs are everywhere, and trying to find a way to measure that when I came up with this thread.
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