My 43-year-old niece, Roberta, just lost her
job of eight years. As a high school
graduate with a year of community college to her credit, she worked as the sole
employee in a 400-square-foot property management office as receptionist, file
clerk and general office do-it-all.
Though she performed well for her boss, he told her the job no longer
existed. The reason: He set up an office
in his home, went electronic on his files and reports, and relegated the
telephone to automation. In doing so,
human endeavor is replaced by a set of machines . . . at a monetary savings, of
course.
There’s more to this little happening than
the loss of a single job by one salaried employee. What we just witnessed is transpiring across
the nation at all income levels. If you pay
attention to the statistics, you know the official unemployment rate for July
2016 is 4.9%. And if that number is accurate,
my niece will be quickly reemployed. However,
the U.S. Labor Department rigged the system so by its selected method,
categorized as U-3, only “persons without jobs who have actively looked for
work within the past four weeks” are counted as unemployed. If every employable individual without
meaningful employment is counted, the rate would more likely run closer to 20%. The odds are, Roberta will probably be out of
work for a long time.
The replacement of human workers by machines
is nothing new. If we flash back two
hundred years to England, we see an Industrial Revolution in progress, with
hand production replaced by machine tools and the rise of factories. And as you’d expect, the transformation caused
upheaval. With textiles as one of the
dominant industries, workers in that trade, who found their jobs threatened,
did not take it kindly. One such man was
Ned Ludd, of Leicestershire, who in 1799 smashed two stocking frames in a fit
of rage, while proclaiming: “Progress may have been a good idea once, but it
has outgrown its usefulness.” With that,
the anti-modernization Luddite movement developed where, over the next decade,
organized mobs actively participated in the destruction of machinery of all
sorts. Not until 1813, when the British
government harshly suppressed the Luddites, executing some of its participants,
did it finally end.
Somewhat more recently, and closer to home,
we see the effects of technological advances coupled with the maturing international
economy. Over the past several decades, manufacturing
in the U.S.—for over a century the mainstay of the nation’s economy—became less
and less viable. Our problems don’t seem
correctable. With the market for our
products now worldwide, we must be able to match our competitors in both price
and quality. But how can our products compete
when our employees receive a $15 per hour wage, while a competing firm in China
pays only $1.26 per hour—or in Bangladesh, 24¢ per hour? It’s no surprise that virtually every
electronic product on the shelves of my local Kohl’s department store bears the
label “Made in China.” Does it lead you,
as it does me, to ask the rhetorical question: Where are the U.S. workers who
did not have a hand in manufacturing any of these items?
While we’re lamenting the loss of jobs to
low-paid foreign workers, let’s take a closer look at some of the jobs being
created here in America. Over the past
several years I’ve marveled at the number of massive facilities I’ve observed
springing up in the nearby Inland Empire (these are the counties of San
Bernardino and Riverside in Southern California which house a mostly lower
income blue collar population). Many of
these structures are major corporate warehouses, some containing hundreds of
thousands of square feet, and obviously built to take advantage of low land
costs. I’ve presumed the sheer size of
these buildings, with the staffs they must hire, create employment opportunities
for many local residents and improve the area’s economy I now admit, having never actually inspected
any of these operations, my presumptions were badly off base. I’ve since learned few persons are needed to
operate these warehouses. Almost everything
going on inside their walls is performed by machines, with only a handful of
technicians required to handle the controls.
So once again, man takes a back seat to the machine.
If you’ve tuned into the ongoing presidential
campaign, you see the economy is of vital concern for both major candidates. Understandably, large numbers of tax-paying
citizens without secure employment can be a potent source of votes. This no doubt explains why the Republican
nominee, Donald Trump, began his campaign by announcing that, if elected, he
will deport millions of undocumented aliens and build a wall to keep out any
more from entering. It doesn’t matter
whether such a project is even possible; it certainly influenced many
votes. In addition, he’s vowed taxes
will be cut so citizens will keep more of their own money. These messages registered well with the Republican
electorate, enough so he beat out 16 competing candidates.
This gets us to the question which deserves
to be asked and answered: How will America’s workers fare in the coming
years? Will our government conduct its
affairs to encourage the traditional virtues of hard work, systematic savings
and independence from government controls?
Perhaps so . . . and perhaps not.
I’ll not
conclude this with a prediction of the election outcome or the economic future
of millions of our fellow citizens—mainly because my predictions are often
wrong. Instead, I’ll simply provide a
2012 quotation from a past Republican presidential candidate, Mitt Romney, that
may give a hint as to how our nation is evolving. With this, you may decide whether the future
appears bright.
“There are 47 percent
of the people who will vote for the [Democrats] no matter what . . . who are
dependent upon government . . . who believe they are victims . . . that
government has a responsibility to care for them . . .that they are entitled to
health care, to food, to housing, to you name it . . . that's an entitlement .
. . and they will vote for [Democrats] no matter what. These are people who pay no income tax . . . so
our message doesn't connect. “
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If you enjoy this
weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly
Financial Newsletter, as well as my new book, The Road to Prosperity
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