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Forums - Politics - Why isn't perpetual high unemployment inevitable?

I am pondering this, wondering about trends historically that have been happening.  I am looking at factors and wondering why it won't be so.  I want to look over a number of assumptions and ask if they are correct, because they would seem to point to eventual large scale unemployment (otherwise known as people getting paid for work).  These trends and assumptions, please correct:

* These are the sectors of the economy that employ people: agriculture, manufacturing, services, intellectual properties (includeding data and information processing, software and other entertainment related products, R&D fits into here also), financial industries (the flow of currency in an economy).  Anyone see any other sectors involved here I have missed?

* Historically, agriculture dropped a HUGE degree, to employing a very small percentage of the U.S population, with the U.S being a leading exporter of food:

http://en.wikipedia.org/wiki/Agriculture_in_the_United_States

In 1870, 70-80 percent of the US population was employed in agriculture.[citation needed] As of 2008, approximately 2-3 percent of the population is directly employed in agriculture. See this USDA link, http://www.csrees.usda.gov/qlinks/extension.html for more information and history on U.S. agriculture.  This has been the historic trend everywhere also.

* Manufacturing in America has shown large productivity gains, and increases in exports, but a decline in population employed in manufacturing:

http://www.fool.com/investing/general/2011/02/25/the-truth-about-the-great-american-manufacturing-d.aspx

* Services: Following the current trends seen with manufacturing and agriculture, any indication that the likes of retail or other areas won't also end up seeing the need for less labor as time goes on?  There is an increased amount of self-service everywhere, including check outs at cash registers, and so on.  Look at Walmart for example.  You have Big Box stores that have driven down costs.  People also use the Web more to no only order, but also to get answers.  

* Intellectual properties: There has been a trend towards crowdsourcing and also a flood of cheap or free apps.  To see one industry you have, it is the videogame industry.  Look at the crying out against apps on portable devices.  There is a glut of content being produced.  And video production quality for videos has gone up, allowing increased productivity here.  The videogame industry operates on razor thin margins. Is the trend for the videogame industry to employ larger or smaller teams in the future?  I saw EA article on here saying that the smaller team approach is the future.  Exactly how big does a team need to be to produce an Angry Bird?  And as far as research and development goes, what exactly is new areas coming along that aren't just the same things, but in need of less people?

* Financial industry: Exactly how many people are needed to push paper and financial instruments around, or sell insurance?  Doesn't the Web scaling the ability to serve also impact in this also?

Please fill me in on what I am missing here. Exactly what is going to prevent perpetual increase in unemployment that will be irreversable?  How do we know that 20% under/unemployment rates won't be the norm from here on out?  Why won't this be so?



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Oil will crash, 2 billion of us will starve, and most of the rest will go back to work in the farms

But seriously, the market should correct against that in the long run. If enough people become unemployed and the demand for manual labor drops low enough, employment will go back up, unless those losses come primarily from the minimum-wage sector, but no-one really makes a living off such employment anyway



Monster Hunter: pissing me off since 2010.

Well, the automotive and transportation industries will never be fully automated. At least not for a very very long time, and transportation needs will continue to rise as populations do.

Also, programming, technical jobs, etc. are all on the rise and will continue to do so.

Eventually the companies that outsource their programming/tech support departments will revoke back to their own in house departments because the countries with which we outsource to are becoming more technical and self dependent and making higher wages.

What we will see as we go on is a shift of employment to new areas. Areas with which you did not cover, such as the more technology based, transportation, etc. Services will also not be going anywhere for a very very long time.



Well, for one thing there aren't actually less people working in agriculture these days. It's just that most of them aren't documented.



badgenome said:
Well, for one thing there aren't actually less people working in agriculture these days. It's just that most of them aren't documented.

Is the percentage of the population involved with agriculture going up or down?



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richardhutnik said:
badgenome said:
Well, for one thing there aren't actually less people working in agriculture these days. It's just that most of them aren't documented.

Is the percentage of the population involved with agriculture going up or down?

Was I being serious or not?



badgenome said:
richardhutnik said:
badgenome said:
Well, for one thing there aren't actually less people working in agriculture these days. It's just that most of them aren't documented.

Is the percentage of the population involved with agriculture going up or down?

Was I being serious or not?

Coin flip you weren't being serious.  But in today's political environment, people give non-serious answers as if they are serious, so I didn't know.  There is also aspects of what you said as correct, that there are unground workers not being counted.



Mr Khan said:
Oil will crash, 2 billion of us will starve, and most of the rest will go back to work in the farms

But seriously, the market should correct against that in the long run. If enough people become unemployed and the demand for manual labor drops low enough, employment will go back up, unless those losses come primarily from the minimum-wage sector, but no-one really makes a living off such employment anyway

Why would employment go back up, unless businessed have a demand for more labor?  If all sectors are automated so that it isn't needed, then where are people employed into?



I was trying to look up George Jetson's job, and found some more articles on what I have asked about here:
http://shorebank.typepad.com/the_oser_view/2010/11/george-jetsons-job.html

The picture that emerges is of a strengthening economy within a stagnant society; that is, a bifurcated socio-economy. In every recent recession, businesses have learned how to produce more with less expense as measured by productivity per hours worked. Businesses do not forget the lessons when they recover from the shock of the recession. Consumers, however, forget the shock more quickly. Those who have jobs begin spending freely again, spurred on by relentless advertising, door-busters, and other come-ons. But following each recession, a larger pool of unemployed and under-employed is being left behind. This time, the bifurcation is being widened. Household wealth is being squeezed by falling home values and the unavailability of traditional credit.

What happens if you end up with George Jetson 9 hour work weeks?



richardhutnik said:
Mr Khan said:
Oil will crash, 2 billion of us will starve, and most of the rest will go back to work in the farms

But seriously, the market should correct against that in the long run. If enough people become unemployed and the demand for manual labor drops low enough, employment will go back up, unless those losses come primarily from the minimum-wage sector, but no-one really makes a living off such employment anyway

Why would employment go back up, unless businessed have a demand for more labor?  If all sectors are automated so that it isn't needed, then where are people employed into?

Really nightsurge made a better reply than i did. New sectors will always emerge that demand manual labor. Who watches the watchers, who builds the automated machines? As more services become transferrable, more people can be employed meeting the world's demands, say, for something more complicated than the average Indian can do, call centers will increase in volume. We're going to need lots of people for the inevitable infrastructure swichovers that are coming: universal fiber-optic broadband, systems to meet the electric car economy or the hydrogen economy, plants to process algae and kelp biofuels to supplement the loss of fossil fuel.

There is a point when pretty much all services could become automated except the creative arts, but if it's a system of sustainable energy, then that'll just be a quasi-Communist utopia like they have in Star Trek, but that's way down the line



Monster Hunter: pissing me off since 2010.