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The Economy

Jobs 3.0

by Dr. Steve Elwart


The world is moving into a new phase of labor. It could be termed “Jobs 3.0.” We’ll have one group of people who will be working in higher skilled jobs that, as yet, have not been automated and a permanent underclass living off government assistance. Many would say we are already there.

A very interesting storyline came across the Internet. It started with a group of workers at several McDonalds restaurants going “on strike” for an increase in pay to $15 USD/hour (the current minimum wage in the United States is $7.25 USD/hour).

This brings up two interesting questions. First, if raising the minimum wage is the answer to poverty, why not just mandate the minimum wage to $24/hour (or about $50,000/year—the midpoint of “middle class” income in the U.S.)? Poof! The end of poverty in America.

A more telling question came from a comment from one of the strikers. The worker, a middle-aged man with a picket sign, said he wanted full-time work at a “living wage.”

The unanswered question is: Why is a person who is trying to raise a family flipping burgers at a fast food restaurant?

Minimum Wage Business Model

Many businesses that pay a minimum wage had a business model that held that teenagers and college students would hold these entry-level jobs only as a way to earn extra spending money or to help pay their college expenses.

As people in their 30s to 50s lost their jobs due to a poor economy or displaced by technology, they were pushed into these lower paying jobs to try to keep their families afloat. The result has been many middle-aged workers being “underemployed” and younger workers being out of work completely.

The world is moving into a new phase of labor. It could be termed “Jobs 3.0.”

“Jobs 1.0” was home or city-centered employment. Most people worked on a farm or as local artisans. They did not travel very far and would spend their lifetime within miles of where they were born. People were mostly self-sufficient with little need for items produced by others. These people lived by some basic Biblical Principles:

Go to the ant, you lazy man! Observe its ways and become wise.

Proverbs 6:6 (ISV)

Whoever tills his soil will have a lot to eat, but anyone who pursues fantasies lacks sense.

Proverbs 12:11 (ISV)

Very little formal education was needed to do this work, only tutelage under a family member or a Master Craftsman. The training of apprentices in a trade led to the development of the Guild System. This was how mankind lived their lives for millennia.

“Jobs 2.0” began with the Industrial Revolution. As tasks became more mechanized, individuals and whole families would travel from their homes to the cities to work in factories. Many times they worked under poor working conditions, but for more money than they could earn back home.

Major population migrations were seen during this time. Since machines were built to do the repetitive tasks, less training was required by the workforce and workers could be easily replaced. In order to protect their jobs and to improve working conditions, craft guilds were slowly transformed into labor unions. During this period, a worker with a high school or even a grade school education could live a middle-class lifestyle.

The Information Age

“Jobs 3.0” began about the start of the “Information Age” and the advent of computers. Industrial jobs that had been done by low and medium-skilled workers were now done by computer. This iteration in job skills represented a tectonic shift in skills needed. Many employers looking to fill “middle-class” jobs now require a college education as a qualification for employment. Many times, a college diploma is not enough. Many employers even require additional training or experience to qualify.

This situation has set up a strange dichotomy where many jobs go begging for lack of experience while at the same time global unemployment has now reached its highest level since the Great Depression of the 1930s with over one billion people out of work.

The rising trend in unemployment isn’t over yet. The Jobs 3.0 revolution is replacing human beings with computer-based technology all over the world.

Nobel laureate economist Wasilly Leontief saw the trend of increasingly sophisticated computers replacing people decades ago when he said,

The role of humans as the most important factor of production is bound to diminish in the same way that the role of horses in agricultural production was first diminished and then eliminated by the introduction of tractors.[1]

A study conducted at the MIT Sloan School of Management shows a troubling trend: Many types of jobs will disappear as new technologies are adopted—not only in manufacturing, clerical, and retail work but also in professions such as law, financial services, education and medicine. The study shows that beginning in 2000, productivity continued to rise strongly, but employment suddenly declined. By 2011, a significant gap appeared between productivity and employment—economic growth continued with no parallel increase in job creation.

Technology is behind both the healthy growth in productivity and the weak growth in jobs. According to the study, “rapid technological change has been destroying jobs faster than it is creating them, contributing to the stagnation of median income and the growth of inequality in the United States.”[2]

Machines Vs. Humans

In the U.S. and China, the world’s leading manufacturing countries, fewer people work in manufacturing jobs today than in 1997 because of automation.

This change of the face of the world’s workforce is hollowing out the globe’s middle class and polarizing populations—not by race, but by economics.

In February 1994,The Wall Street Journal ran a front-page story positing that growing numbers of workers were being permanently replaced by the new information technologies. According to the Journal:

Much of the huge U.S. service sector seems to be on the verge of an upheaval similar to that which hit farming and manufacturing, where employment plunged for years while production increased steadily… Technological advances are now so rapid that companies can shed far more workers than they need to hire to implement the technology or support expanding sales.[3]

The ROMPER

One example of this is a new robot the Israelis are experimenting with. A Robotic Melon Picker (ROMPER) uses special sensors to determine whether a crop is ripe to pick. The introduction of ROMPER and other automated machinery will dramatically affect the economic prospects of the more than 30,000 Palestinians employed during harvest season.

In the United States, Purdue University scientists say they expect to see ROMPER in use “in every Indiana county by the end of the decade.” Similar robots are being developed with artificial intelligence to plow and seed fields, feed dairy cows, even shear live sheep. Researchers predict that the fully automated factory farm is less than 20 years away.

In industry after industry, companies are replacing human labor with machinery, and in the process changing the nature of industrial production.

While higher-paying jobs requiring creativity and problem-solving skills, assisted by computers, have flourished, low skilled jobs that are nearly impossible to automate, such as restaurant workers, janitors, home health aides, and others doing service work are continuing to be in high demand. Unfortunately, these low-skilled jobs do not pay a “living wage” because the supply of ready labor is so high. Thus the plight of the striking restaurant worker.

The constant, relentless elimination of jobs is causing men and women everywhere to be worried about their future. The young are beginning to vent their frustration and rage in increasingly antisocial behavior. Older workers, caught between memories of a prosperous past and fearful of a bleak future, feel trapped by circumstances over which they have little or no control.

In Europe, only four countries are at or below 6% unemployment: Germany, Austria, the Netherlands and Luxembourg. In addition to long-term unemployment among lower income workers, the wave of unemployment has hit middle and upper-middle income workers. Many of these people have been unemployed for so long that they have had to completely change their lifestyle. Poverty is hard enough to manage, but when it is also linked to loss of status, the pain is compounded and a politically potent power arises. 

The fear over rising unemployment is leading to widespread social unrest and the emergence of neo-fascist political movements on the continent.

In Japan, youth joblessness, which surged after its financial crisis in the early 1990s, has stayed high despite a decrease in the overall workforce. A large class of hikikomori live with their parents, rarely leaving home and withdrawn from the workforce.

A dramatic change, with far larger impact on employment, is also happening with clerical work and professional services. Technologies like the Internet, artificial intelligence, big data, and improved analytics, are automating many routine tasks and eliminating many traditional white-collar jobs. This is far more insidious than the prospect of robots and automation doing human jobs. It involves digital processes communicating with other digital processes and creating new processes.

This trend will enable businesses to increase their productivity while making humans obsolete.

We’ll have one group of people who will be working in higher skilled jobs that, as yet, have not been automated and a permanent underclass living off government assistance. Many would say we are already there.

The Scriptures have little to say about jobs and the employer-employee relationships as we know them today, because when the Old and New Testaments were written very few relationships of that sort existed.

One thing we can infer from the Scriptures is that Christians who finds themselves in positions such as manager, supervisor or employer, will keep foremost in their mind that their Master, who set the example in all things, came to earth not to be served, but to serve.

One of the responsibilities of a Christian is to prepare those for whom they are responsible for the uncertainty of the future. That may be by providing opportunities for training or continuing education for future jobs or by just giving wise counsel.

Our jobs provide many marvelous ways to honor God and to be a living witness to his mercy and faithfulness. No matter what the future holds for employment, we can take comfort that one thing is sure:

And we know that for those who love God, that is, for those who are called according to his purpose, all things are working together for good. — Romans 8:28 (ISV)

Sources

  • Acs, G. (2011). Downward Mobility from the Middle Class. Washington, DC: Pew Charitable Trusts.
  • Liu, E. (2013, August 7). “McDonald’s and the Fate of the Middle Class.” Retrieved from Time: http://ideas.time.com/2013/08/07/what-mcdonalds-has-to-do-with-the-fate-of-the-middle-class/

  1. Leontief, W. (1986). Input-Output Economics. New York: Oxford University Press.  ↩

  2. Rotman, D. (2013, June 12). “How Technology is Destroying Jobs.” Retrieved from Technology Review: http://www.technologyreview.com/featuredstory/515926/how-technology-is-destroying-jobs/  ↩

  3. Wall Street Journal. (1994, February 24). “Retooling Lives: Technological Gains are Cutting Costs and Jobs in Services,” p. 1.  ↩


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