Is Massive Job Creation Likely?

Is Massive Job Creation Likely? October 29, 2012

While the third and final presidential debate focused on foreign policy, it was notable that even there—if my memory serves me—the answers offered regularly managed to find their way back to domestic economic policies. Unemployment and job creation have played a central role in this campaign.

But is it just me, or does anyone else wonder whether the information-based economy that is ours today simply cannot sustain the sort of job-creation demands we are placing upon it? Talk of creating 12 million private-sector jobs—or even 6 or 4 million—ought to give us pause, not because it’s not possible, but because it might be quite improbable, regardless of who’s in the Oval Office (or in Congress, for that matter).

As sociologist James Hunter astutely points out in his book To Change the World, much of what drives and sustains the economy and so much of what it sells today is knowledge, information, images, symbols, and entertainment. According to the NFSS, one in three young adults—a significant group of consumers—spends more than an hour a day on social networking sites like Facebook. (I suspect that may quickly become an undercount.) That’s a ton of person-hours spent on something that’s delivered for free from a company that has less than 4,000 employees. By contrast, Ford still has 164,000 employees worldwide, but reported 300,000 a mere six years ago. Shell, the second-largest corporation behind Wal-Mart, only employs 97,000 people worldwide, compared to the 2.1 million that work for Wal-Mart. (And we all know how much Wal-Mart pays…)

The expansion of the State that we have witnessed is perhaps not due directly or even primarily to the heightened influence of decision-makers who wish for a more centralized State-shaped economy, but due to the State’s historically-stable role in the production of knowledge and information. In other words, when we made material objects with manual and skilled labor, the State’s role was less pivotal or obvious. (Think regulatory.) But in an economy like ours that privileges things like the health care industry, information technology, and social media—basically the creation and application of knowledge—the State has been and will likely continue to be more involved. We have countless state universities, training the software engineers and physician’s assistants of tomorrow. We have NIH grants to improve health (whether they genuinely accomplish this is not obvious), and NCI grants to combat cancer. We have a large population of aging persons, courtesy of the baby boom and improved ability to sustain (their) life, and hence the emphasis on health care delivery. Over a billion people have a Facebook account, and many use it daily. In other words, our economy is reliant on technologies (and their development) that require more and more knowledge—and hence historically greater State involvement—but fewer and fewer people. Of course we have unemployment issues. It should surprise us that unemployment isn’t notably higher than it is.

Add to this our expectations that if persons wish to be employed, they ought to be so. This seems comparatively new in human societies. Fewer women were consistently in the full-time labor force as recently as a couple generations ago. Now they are, and we generally encourage everyone to consider what they “want to do with their life,” by which we tend to mean careers in the paid labor-force. (When is the last time you heard a college student state they intend to graduate, marry, and then become a full-time, stay-at-home parent? I cannot recall one.) We expect everyone to seek work. In the past, we did not. The voluntary sector has given way to the demand for paid non-profit sector jobs. So we’re quite possibly trying to cram more people into the paid labor force than ever before, at a time when the sort of economy we have requires fewer and fewer people.

I’m not sure it’ll fly. I just don’t see how we in the West will witness an economy of the sort wherein nearly all of the people who wish to find paid, full-time work can do so. It’s not that kind of world. Of course there are partisan ideas about how best to help alleviate unemployment and foster better jobs—from tariffs to ease of access to education to unionization to stimulating lending. I get it, and some of these strategies could very well work.

But shouldn’t admitting the blunt truth about a very different sort of economy today be a good place to start? (Probably not at this point in the election, I understand…) Eight percent unemployment may not just be the new normal or benchmark. Someday we may well consider it an impressive accomplishment.

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  • Becky

    Quibble — NCI is part of NIH. NIH is divided into 27 institutes/centers, and NCI is among them. NIH grants are awarded through these institutes and centers — you wouldn’t get a grant from NIH qua NIH; it would be from NCI or NIA, etc. (A list of the institutes can be found on the NIH web site:

    I think this division into institutes/centers can create confusion and, in many instances, obscure the importance of NIH’s work, so I just wanted to point this out if you weren’t already awaer of it.

  • James

    I disagree , this was the type of stuff being said in 1980 , then after that election such talk seemed so obviously misguided , but that was true only in retrospect

  • I just don’t see any reason to be that pessimistic. Northern Europe is doing fine right now, and anyway we have long term shortages of teachers and doctors that will be acute once all the baby boomers are out of the work force. Maybe the US wouldn’t be floundering around so much right now if we actually took the time to look at how other countries are doing better than us.

    • Mark Regnerus

      I am happy to be wrong on this stuff, and may well be. I do tend toward the “glass is half empty.” I just wonder if “all boats can float” in the way that so many seem to optimistically assert. I do think a higher birthrate would help in the long run, especially if we intend to keep the promises we’ve made in Social Security, etc. But that’s a different discussion. I remain concerned that the knowledge economy doesn’t require enough help/people.

  • I think it would be premature to discount the potential future jobs in the “information” environment. Ten years ago could anyone have imagined the number of jobs provided by companies like Google or Facebook?

    • matt

      Problem is, Dr. Don, that Google and Facebook don’t really employ all that many people — at least compared to the industrial behemoths of yesteryear. This was one of Mark’s points.

      It is entirely possible that tomorrow’s cutting-edge tech firms will be on any even more efficient scale and can generate even more production with even less human involvement via improved machine-learning algorithms, artificial intelligence, and the like. I think Regnerus is pretty much spot-on.

  • Jason Lee

    Problem is we need more highly educated people. Right now we have a bottle neck at the fount of learning. College is too expensive, just at a time when our knowledge economy needs more highly skilled people. Granted, this would drive down wages of highly educated people. Upshot is more people would find stable work with wages they can actually live off of and sustain families with.

  • One of the problems which no one is talking about is that we’re not actually Lake Woebegon. Half of all people are by definition below average. Not everyone is going to be able to be a doctor or teacher. College is great for those with the drive and ability, but what about those for who working the checkout machine at Walmart is quite enough? I think that a big issue is the devaluing of work. A store that is dirty will not thrive, but those who run stores see the job of janitor as barely worth minimum wage, no benefits. If every CEO disappeared tomorrow, the world would go on with barely a burp. But if every farm worker disappeared tomorrow, we’d quickly be going hungry. Our perception of the worth of different kinds of work is really skewed. The simplest jobs which can be done by people with no special abilities or skills are often the most essential to our survival and yet those are the jobs which we pay slave wages for. I think that the wage problem needs to be taken seriously. An economic system in which anyone who is not smart, driven or connected enough can’t support themselves is a failing economy – no matter how well those who are smart, driven and connected are doing. We all lament the disappearance of manufacturing work and the good wages it provided, but really there’s no reason that service sector workers should be paid as well as factory workers.

    • Sorry – “there’s no reason that service sector workers should NOT be paid as well as factory workers.”

      • matt

        the market determines wages, Rebecca. It’s not for us to impose a norm-based standard for how much or little service sector employees make.

        • First of all, does the market exist for humans or do humans exist for the market? If the market decides that vast numbers of workers aren’t worth paying, then the market is broken and inhumane. What sort of understanding of the good would allow the needs of the market to completely outweigh the needs of human beings?

          Secondly, the idea that markets magically determine what various types of work are worth is a complete fallacy. If your store is dirty, it will fail. The entire enterprise requires someone keeping everything tidy in order for money to be made. And yet, most janitors make very little money. Likewise, if every farm worker, child care worker and service worker disappeared, it would mean chaos and many people would suffer great financial and personal loss. OTOH, if every CEO in the world disappeared tomorrow, life would go on with nary a burp. Most companies would have no trouble filling there spot and continuing on largely unaffected. Yet, we pay CEOs very large sums of money. What we see regarding wages isn’t simply the market at work. It’s what happens when a small group of people are able to set wages for the benefit of themselves and their friends, act as gatekeepers and practically write the rules our whole system operates by. There’s nothing free market about that.

  • Ted Seeber

    I can easily propose a simple law that would instantly enable the economy to create 90 million new jobs:
    Make the standard workweek 20 hours and double the minimum wage.

  • Andie

    High unemployment –not the correct word, since unemployment is defined as jobless and actively seeking work — might be an accomplishment if the involuntarily jobless were not unremunerated, uninsured, regarded as “takers,” bums, and generally treated as human garbage. It would be a lot easier to generated higher employment rates an better conditions for all if we slashedvthevworking day and the working year. But it is not going to happen. Welcome to the Gibsonverse.