Friday, August 29, 2014

Too many workers

We've come to a major turning point in history. Our economies, throughout most of the world, can no longer absorb our population increases and provide an increasing number of jobs. While there have been periods of high unemployment before in history, they've been reversed. I don't foresee that happening at all in the future. We are permanently in a situation where we have many more workers than we need, and there's no way for the extra workers to join the regular economy at the full-fledged rate.

Looking just as the US, we have the lowest worker participation rate in 36 years.

Labor Force Participation Rate 1948 - 2013

We have high unemployment among our young people, and that's a worldwide problem. It's certainly possible for jobless people to be productive (cleaning, doing small repairs, gardening, teaching, etc.), but not at the going rate. So this extra labor force can work in the gray economy, work at home or in family businesses, or can volunteer, but they must be supported by others--those who are working at market rate jobs.

Why don't paying jobs exist for these people? Because our economies have become much more automated. It's been a goal in innovation to automate actions instead of having workers perform them. I go to an ATM machine instead of the human bank teller earning a wage. An ATM costs $2k (according to the ads on Google). That's a lot less than a teller's yearly salary. Ordering is automated online, saving the cost of a order entry clerk. Crops are planted and harvested with the help of huge machines, shrinking the number of farmers to 2% of the US population.

Too many workers? Yes, and too many people.

With all this equipment, we just don't need as many workers. So what should we do? There's a logical answer, but most people don't want to admit it: we need fewer workers, thus we need fewer humans. We should be shrinking our birth rates. Our birth rate should be lower than the replacement rate--yes, lower. Not zero growth, but negative growth, meaning contraction of the human population. If we don't do this, we will continue to have too many workers for the rest of foreseeable future, barring global cataclysm.

What are the downsides of fewer children and lower human population? Many people don't like the policy. Their cultures emphasize having children to carry on their legacy and take care of elders. It's hard to counter the cultural norms, but that doesn't mean that the cultural norms are logical or well-adapted to our current situation.

We'll have fewer people paying into Social Security, but we have to face that anyway. The huge baby boom generation is an anomaly that shouldn't become the norm just due to worries about how pensions are going to be paid. Besides, if there aren't enough jobs, those unemployed people aren't contributing anyway.

Suppose we underestimate the number of workers we need, and we create labor shortages due to a labor pool that's too small? That's not a big problem. We can either import workers or we can increase our birth rate to correct the problem. As we've seen, we can increase our population very quickly when we want to.

I'd like every country to decrease their birth rates, and they are. Two decades ago, few countries were reproducing below replacement rate. At that time it was considered a dire situation, but it no longer looks that way. Now many more countries are running below replacement rate. That's a good thing ... especially if we want to avoid more of this.

The lucky one has a metal roof (Bangladesh).

They pray for a rectangular shack instead of a lean-to (Bangladesh).

Apartment blocks don't solve the problems (Cairo).

Update 12/26/14. An article from The American Conservative pointing out that no one (despite political parties' claims) seems to know what to do about these economic problems.


Dangerous said...

How about cutting the standard work week and sharing the increased productivity via higher wage rates? There's plenty to be done in the world, and even in the good ol' USofA, and always will be. But if a relative handful of corporations and wealthy individuals capture the lion's share of the wealth created, then that won't happen and we'll be stuck with all those people who aren't going to stop breathing and eating, and aren't going to stop having babies -- although the data should birthrates fall as economic prosperity increases -- and a chaotic world requires constant attention from the humans trying to control it.

There's something to your thesis, of course, Malthusian as it is. But remember that fewer people also means fewer people to do things for, and make things for, and so on. The "economy" is a dynamic, chaotic mix of people doing for others in exchange for money, and that's true now as it was when there were just a few million people on Earth at the dawn of commerce.

ModeratePoli said...


I don't if the standard work week can be cut back. The competition between workers is such that there will push back against that, and employers won't have to do it.

As for the fact that people will keep having babies--yes, that happens in some places like Gaza, but generally the trend is downward. The trend is heading where it should based on the economics of the situation. High unemployment should lead people to have fewer children. It's just logical, though some places defy logic.

I think fewer humans would be a blessing to the entire world. More space for each of us and for the other living things on earth. Maybe I'll even live long enough to see it.

I would much prefer to see it accomplished by people realizing it's better, than by compulsion or disease. I don't support killing to achieve it.

get72ready said...

I think overpopulation is a dated way to look at our current scenario. I much prefer to look at it from a resource shortfall perspective. I do think that we are saying the same thing but I think looking at the scarcity and cost of resources makes the analysis of our failing economy more agile. Have you been here?

ModeratePoli said...


I skimmed the link, but I didn't find the perspective to be that enlightening. Certainly, it's a reasonable choice to live a simpler and more self-sufficient way. People may need to do that out of necessity when there are fewer and fewer job available.

But remember that this choice isn't available to everyone. If you've been born in slum in a megacity, you may very well have no land to go back to and no money to buy or rent land. You may not know how to plant enough so that your entire family won't starve, how to build a home or what tools you need, or how to raise animals. A lot of this traditional knowledge has already been lost for a lot of people.

So what that website suggests is something that will work for some people but not the majority. So what about the rest?