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Tuesday, May 10, 2011

No Recovery for Workers:

How bad must it get before we switch, as a country, to a citizen's dividend?

Last month, unemployment increased back to 9%. This doesn't count people who have been out of work for over six months and people who aren't getting enough hours. True unemployment remains around 22%. Of those who are employed, wages have not increased in years, which, due to inflation, means they have actually been losing compensation for years. In addition, they are being forced to work harder. As a result, as reported in this article:, is that America has reached a new record in job dissatisfaction.
Indeed, a recent survey from the Conference Board found that just 43% of Americans are satisfied with their job -- a record low.

Workforce participation is also at an all-time low: 64.2% of the civilian population.

Wages have not increased above the rate of inflation since 1970 for the bottom 95% or so of the population.

We are reaching a labor Armageddon, while politicians simply twiddle their thumbs. Republicans and Democrats both say they want to 'create jobs,' but how can you create jobs? Only by creating make work that has no fathomable use, could a government create jobs where business can't find any use to have them. If a job were worth doing, if it could make money doing it, employers would have hired employees to do that job long ago. The fact that workforce participation is at an all time low, unemployment is at an all time high, worker satisfaction is at an all time low, and wages are going down instead of up, doesn't imply there are 'infinite jobs' readily available for either private enterprise or the government to hand out. Where are the jobs? What is the plan? How do these parties intend to make jobs appear out of thin air? If something isn't viable, it isn't viable.

Why are employers able to put such a squeeze on employees, that only 64% of the country has a job, and of those, only 57% of them are satisfied with their job? This means that employers must have a massive upper-hand compared to the labor they are hiring. The answer isn't unions, which just create more inefficiencies, and are powerless to stop the overwhelming advantage of employers anyway. The answer is to give bargaining power back to the people -- it is to upset the market fundamentals that are giving the advantage to the employers over the workers.

The answer is the citizen's dividend. What if the 43% of the employees who are unsatisfied with their jobs were able to quit their jobs? What if they could say, 'take this job and shove it' to their employers? So long as they are financially dependent on a job, they can't afford to say that. An employer can be as tough on his employees as he likes, and there will never be any consequences. But if people were guaranteed a basic standard of living whether they worked or not, at say $10,000 a year, they could easily quit the jobs they hated and tell the employers to fend for themselves.

Employers wouldn't be able to hire a new army of serfs to replace the old workers either, relying on the 'reserve army of labor' that forms 40% of the US populace. All of these people would also have a citizen's dividend of $10,000 a year, and could tell the employer to go to hell, they don't want the job either, they're fine being unemployed. At this point, and ONLY AT THIS POINT, employers would finally consider improving working conditions or increasing wages for their employees, to attract them off of the comfortable annuity the government provides for them gratis.

Currently employers have a monopoly on life itself. If you can't please some employer, you can't even live. It is practically impossible to 'stand on your own two feet.' 75%+ of the population is an employee to someone else. It isn't possible for all of these people to quit and become entrepreneurs, or subsistence farmers in Alaska, or whatever the dumb alternative plan the rugged individualists are offering is. If you quit your job, you just have to work for some other employer, who also has no incentive to lighten hours, treat you more respectfully, or increase your pay. The purpose of government is to break up monopolies. What we need is to break up the monopoly on survival. The only way to survive, currently, is to be hired by the survival monopolists, the people with the jobs, the employers. It should be possible for everyone to have the ability to survive regardless of anyone else, the government should trust-bust the monopoly power of employment as a granter of survival capacity.

If you combine the out of work with the dissatisfied workers, you get the majority of Americans. America is a democracy, therefore, whenever the majority of Americans want, they could simply vote themselves a citizen's dividend. Then the employers would have to make work better than the citizen's dividend, to attract employees again. It would introduce competition. We have constantly heard about how competition is necessary to improve employee performance. However, we have never heard that is necessary for employers to have competition to increase their performance. Why is this? Why shouldn't employers have to compete with alternative life opportunities if they wish to attract workers? If employers had to actually satisfy their employees in order to have any, how would working change?

Imagine if anyone with a job would have to be paid well over minimum wage, like, say, $40,000 a year, to make it worth anyone's while. There's a dirty secret in the world of business -- labor costs are just a tiny proportion of the cost of making a product. Therefore increasing labor's wages has little impact on the bottom line. Wages could be tripled and it wouldn't make much of a difference to whether a company is profitable or not -- however, employers have no incentive to increase wages because they can keep employees with the sums they're already disbursing. Since employers have no incentive to raise wages, even though they could easily do so, they never will. They haven't for the last 40 years, and they won't for the next 40 either, if we continue to let them play this game.

But let's say jobs that paid less than 40k a year today simply weren't done anymore in our brave new world, because businesses could no longer make a profit doing them. What would we lose? A bunch of jobs that should have been innovated out of existence long ago -- clerks, janitors, etc -- manual labor that could easily be done by modern robotics, or jobs that people could do without and never notice the difference. Is it really necessary for supermarkets to have baggers? Based on how much they're being paid, they aren't highly valued by the employer. Based on the fact that there are self-service lines in any modern supermarket, they obviously aren't necessary either. So why do they exist? Because people have to work, so they'll work at even the most marginally useful jobs for the most marginal of sums. This is the effect of the employer monopoly. Jobs that robots could do, or could just not be done at all, are instead being done by workers who get just enough to survive on and hate their working lives. If these same people would just get up and vote, they could have the same amount of money without the work, and the economy would not suffer in the least -- it could quickly adjust to their absence, just like it's already humming along just fine while only using 64% of the population as a workforce.

These problems have been highlighted by the recession, but they have only just begun. Work has been decreasing steadily for over a century. There is less and less worthwhile work to be done anywhere in the economy. It used to be that everyone could be gainfully employed on a farm, or later in a factory. This is simply no longer true. Farms are more productive now than they were in the past, while only employing .5% of the population. Factories can be completely automated. It was originally thought that people could become 'knowledge workers.' They would learn some useful service skill and apply it all day every day in their jobs, but even this has become obsolete.

Anything you can memorize, a computer can memorize better. Watson won Jeopardy against the two best human competitors in Jeopardy's history. If you want a question answered, about medicine or law or chemistry or physics, you're better off asking Watson than any human on Earth. What can a knowledge worker know that is of any value anymore? Computers will always know more than us.

Ah, but knowledge workers are 'creative' and 'flexible.' When problems pop up, they'll think of some solution, something Watson, who can only regurgitate known general facts, can't do. But everything has its limits. Already computer programmers and engineers have to constantly relearn their trade's skills to keep this 'flexibility' alive. What happens when the pace of change exceeds a human's ability to adapt to it and learn the necessary new programming languages/whatever? Only a computer can be data-dumped with terabytes of new information in a few minutes. For a human, this process takes years. By the time they're ready to take on their new task, it will have already become obsolete.

We are fast approaching a time when there is no job fit for humans except interacting with other humans. This makes a lot of sense, since man is a social animal and the majority of our intelligence was developed not to tame nature, but to help us interact with one another. The advantage we will have over computers in the future will not be knowledge, or flexibility, or creativity, whatever that is (how creative do you need to be to build a bridge off of recognized mathematical principles?), but our communication skills. Humans will be good at marketing our products to one another, but these jobs won't exist either, unless humans have money in their pockets to buy things with. Once all other jobs are taken by automation, how will people buy any products from one another? Only with the citizen's dividend will there be consumers with spending power. Consumers with spending power can then give jobs to marketers with communications skills, entrepreneurs, creative thinkers, systems managers, programmers and the like -- whatever jobs survive the automation revolution. But without any consumers with spending power, if we actually link employment and survival in the age of automation, then all other humans will also lose their jobs -- this is because without customers it doesn't matter how effective a producer you are. Producers, the rich and the successful, NEED the rest of us to buy their products. If you unemploy everyone, and then say the unemployed don't deserve to have any spending power, then you are undercutting yourself! How will you yourself make a living without any customers buying your product? How will you have any customers once everyone is penniless and unemployed?

The world is sleep-walking through a labor nightmare. Work halved from 1900-1990, people went from working 3,000 hours a year to 1,500, on average. Why did we think it would not half again? And why wouldn't it half again? Not every century, but at an accelerating pace (because history accelerates in proportion to the population of the Earth, which is continuously doubling at an ever-faster pace). In fact, work HAS been halving at an accelerating pace -- but unlike in the past, when this still meant everyone could be fully employed, but just work fewer hours, this halving has meant simply unemploying half the population of the developed world. We still haven't realized what 'halving the amount of work hours' means this time around. it doesn't mean people working 4 hours a day. It means the least productive people not working at all, because there's plenty of productive people willing to work 8 hours a day, who can do all the work left on Earth!

What happens when work halves again, such that we are just as productive if the whole world worked 2 hours a day, as working 8 hours a day in 1990? Will everyone switch to a 14 hour work week? No! Employers will continue employing people at 40 hours a week, or 60 hours a week, but only their star employees who give them the highest return, the highest productivity, per hour. IE, they will just halve the workforce again. The civilian population in the workforce will go from 64% to 32% as automation and sound economic practices increase productivity yet again.

It is easy to increase productivity around the world. All we need to do is allow maximum freedom for businesses to hire and fire workers, invest where they please, trade with whom they please, get loans from banks, etc. It's all laid out in Wealth and IQ of Nations, that shows half of your economy is directly correlated to economic freedom, or the Heritage Foundation, which backs this up with their own statistics. Since much of the world is still steeped in socialism, labor unions, protectionism, corruption, and other economic productivity dampeners, without any new technological progress, we could easily become twice as productive the world over. But what does that mean?

What will become of us once the world is twice as productive as it is today, but employers still have a monopoly on survival? Will employers carefully share out the tiny remaining amount of productive labor left in the world, four hours to everyone equally? No! Why would they? They would fire half their workforce and keep the more productive half. In fact, this would just make the situation even more grave, because by firing the least productive half of their workforce, businesses would find themselves even more productive -- which would allow them to fire even more 'unproductive' workers, and so on. So long as people are willing to work, they have no resistance to the employer monopoly. If there are productive, hard working people willing to work 40-60 hours a week, all productivity gains in the future will result in increased unemployment for the rest of us. Productivity gains have been continuously pouring in every year for the last 21 years, since the 1990 study showing work had halfed. Likewise, unemployment has increased and wages have stagnated, since well before 1990. We are living the trend. It isn't theoretical, it's observable. We're watching the trend unfold before our eyes.

The trend has not yet been Named though. Republicans blame unemployment on democrats ruining the economy. But it's precisely the opposite. The healthier an economy gets, the higher unemployment will go. It's only unhealthy, unproductive economies, like medieval serf farming, that have plenty of work to go around. A healthy economy has high productivity per work-hour, which translates into everything of economic use being done by fewer and fewer people working less and less. High unemployment is a necessity of a healthy economy. The healthier, the higher. Democrats blame Republicans for unemployment by not creating more government induced jobs. But government induced jobs don't create value, they only impede true value creators. Extra layers of bureaucracy, or hiring people to do things that are of no conceivable use, is no solution to unemployment. People will be employed, but there will be less money in the country overall, because the country will be less productive. You again would have been better off skipping the make-work stage and just GIVING these people money. It would help the economy, which wouldn't have to support a stifling layer of needless bureaucracy, of endless paper pushers and regulators, and it would free all said parasites from the needless drudgery of working before they're allowed to steal from the producers. Why not skip all that and collect $200 directly?

We can make our economy productive, or we can have full employment, but we can't do both. We can continue to improve artificial intelligence, longevity, and robotics, or we can have full employment, but we can't do both. So long as employers have a monopoly on survival, it is a social necessity to maximize employment. Otherwise, we're talking about a massive die-off of the majority of our country's population. Therefore, it is imperative to decouple employment and spending power. In this way, we could cease prioritizing full employment, because there would be no dire consequences to unemployment, the citizen's dividend would provide for all your needs either way. And the moment we cease prioritizing full employment, boundless opportunities emerge for businesses and nations -- automation, innovative work-free solutions, Watson-like computers handling the roles of knowledge workers, google-driven cars that have already driven themselves for thousands of hours without getting into an accident in the real streets of California, and high paying jobs to highly paid workers who can out-compete machines, free of low-wage competition that would drag their benefits and pay down, because that competition has already quit competing and prefers their citizen's dividend.

A citizen's dividend would revolutionize not the economy, but our reaction to the economy. The economy has already halved our workload yet again, through productivity gains (no doubt due to the internet, China's and India's political reforms that are more business friendly, free trade zones like NAFTA and the EU, etc). As a result, employers have halved their workforce, creating record unemployment and record low workforce participation, and has shown no signs of hiring anyone back. More people are entering the workforce then are being hired every year. 70 million new people are born every year across the world. 70 million new jobs are not being created each year. That's something no one is willing to face up to, apparently, or provide any solution for, except myself.

The jobs aren't going to recover. There will never be a jobs recovery unless population stops increasing, productivity goes DOWN, not up, and a variety of other factors that simply aren't going to happen, would magically have to happen. But we can recover from our lost jobs. We can turn lemons into lemonade, by changing our reaction to the jobless recovery. Business profits have soared this year due to cutting costs and increased productivity, which in turn is due to having laid off all their least effective workers, and made their most effective workers work more for less. Those profits could easily be taken and redistributed to a citizen's dividend. Then businesses would no longer gain the benefits of innovation -- of robots, hard working individuals, societally advanced philosophies, etc. Instead the entire mass of the people would see the benefits of these changes. Why should we enrich a tiny few, the top 5% or so, who have now the highest percentage of income in the country since the 1920's, instead of all 100% of our country with these new bounties?

And don't tell me because the weak are scroungers who don't deserve to live. That's bullshit. In an earlier economy, these same workers were valued productive members of society. In the 1950's and 1960's, an unskilled laborer could have full job security and high wages, enough to support an entire family without the help of his wife. The workers of today have tried far harder than the workers of that generation to get a job, keep it, and be useful while working on it. We have more people with college degrees than ever, who did everything they were told to do to deserve a job. But even people with college degrees, in this economy, can't find a job. It is senseless to 'punish wicked lazy people' in this day and age. We have maximum penalties on wicked lazy people right now, but STILL unemployment is 22%! Does that sound like malice, or deliberate laziness, or saboteurs in our midst? What is the propaganda going to turn to, an attack on kulaks for intentionally not finding a job even though there are infinite, readily available, for anyone willing to put in the effort? The soviets tried this too. When they created a famine, they blamed the starving people, instead of the society they had created that forced people to starve. Now Americans want to blame the unemployed people, instead of the society they created that unemployed them in the first place.

Don't fall for it!

Unemployed people are symptoms of a larger pattern, a centuries long pattern of decreasing work as humanity increases its work-hour productivity!

It has nothing to do with laziness, malice, lack of useful skills, or any other trait the talking heads want to throw at the unfortunate masses.

It has to do with economic trends beyond the power of any individual to countermand. It is like fighting God to get employed in this day and age.

Therefore it is society's duty, who created these unbeatable conditions, to redress the problem. It is also our duty as compassionate fellow human beings, to help the poor and the unemployed still lead a happy life. We don't demand employment from our dogs and cats, we are content if they wag their tails and purr for us. why, then, do we demand employment from equally unproductive, equally unemployable humans, who can do much more than wag their tails and purr? Who can experience the full range of human emotions, like love, beauty, and truth? Who can raise kids and tell jokes and cry and worship and sing and -- ? Are humans really worthless if they aren't working, which will increasingly mean in the top 5%?

How long before our philosophy of right and wrong, good and evil, catches up with our on the ground reality of economic life?

Will we really blame the victims again, just like we did to the Ukrainians in the Holodomor and the Okies in the dust bowl?

Or will we learn from the past and rather than kick dogs while they're down, offer them a minimum standard of living -- adopt them as pets of the state, valuable just because they're warm and fuzzy?

Which kind of person would you rather be?

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