Monday, July 7, 2014

Quickies: Labor Productivity And Standards Of Living

I hope Concerned American at Western Rifle Shooters won't be angry with me for borrowing this graph:

CA adds the following questions:

You should have 170% of the standard of living you obtained in 1980 from one hour of labor.

You don’t.

Why not?

And what is to be done?

"Should" is a funny word. It's used in all sorts of situations where other words -- "is," "isn't," "can," "can't," "must," "may," "might," and "must not" -- have greater objective import. Let's look at this instance of "should" with our best skeptical eyes.

The graph says one thing: that economic output per labor hour is up 70% since 1981. It doesn't say what caused that increase. Neither does it provide any information on the distribution of that gain across all kinds of enterprises, which, in the nature of things, is unlikely to have been uniform. But perhaps most important, it doesn't comment on the distribution of the gain across occupations.

Some occupations, especially those best positioned to capitalize on technological advances, have done very well these past thirty years. Others have slipped backwards, because their value in the labor market has been partially or totally displaced by technology. And another group has stagnated, often because the good or service they provide has itself remained static -- unimproved.

With a huge caveat, which I'll address in a bit:

  • Persons in those trades in which technology, especially the microprocessor, has genuinely empowered the people involved, on the whole have done very well.
  • Those in trades where technology has reduced or eliminated the requirement for human involvement have been penalized by the advances.
  • And those where technology has failed to change the nature of the product they can offer in a substantial way have stagnated.

There are two counteragents to those effects: occupational mobility and political clout. The former is productive: it generally yields gains to the individual worker. The latter is destructive: in the short run it can reward those it favors, but over time it can cause the downfall of whole industries. Look at those trades conspicuously associated with new and advancing technologies, and you'll find a labor influx; look at those associated with heavy political interference, whether direct or indirect, and you'll find labor shrinkage.

Of course, it's possible to shrug all that reasoning aside and simply assume a de facto conspiracy among "industrialists" and "banksters." Such "devil theory" explanations are emotionally appealing: they give us a face, albeit an obscured one, at which to direct our ire. But they tend to imply other trends that aren't in motion -- at least, not detectably so. Nor do they counsel anything but violence and despair.

The best bet is still to rely on oneself: to work to make oneself ever more valuable to one's customers. That has its limitations, of course. Not all of us can become great scientists, engineers, or inventors. Not all of us are sufficiently energetic or unencumbered to drive ourselves eighty hours per week. And not all of us are positioned in space, time, and circumstance such that we can move adroitly among opportunities. As Ecclesiastes would remind us, "time and chance happeneth to us all." Still, working on oneself costs a lot less than getting Congressional subsidies or tariff protection, doesn't it?

What's that you say? But then there'll be nobody to blame for your failures except yourself? Hey, everything has its downside!


YIH said...

Heads up – Looks like things are about to heat up:

The protesters remain there, adamant that illegal immigrants don’t get dumped in their town.

But soon the concerned citizens may be forced to step down–Breitbart Texas has learned that federal agents plan to arrive in Murrieta on Monday with riot gear to ensure that another busload makes it to the housing facility.

Jeremy Oliver, a resident of Temecula, California–a town that neighbors Murrieta–told Breitbart Texas that local police officers warned the protesters that “it’s going to get ugly.”

Oliver said, “The feds are pissed that they haven’t been able to use this facility. Officers out there warned people that federal agents will be in Murrieta on Monday–they are going to get the next bus through no matter what. Riot gear and shields will be used to push the crowd back.”

lelnet said...

"You don’t."

Who doesn't?

I mean, maybe I'm not a great standard of comparison, since for most of 1980 I was four years old, and even if I'd been a working adult, my present profession essentially didn't exist then.

But we're still talking about 34 years. The youngest of workers then would still be among the very most experienced today, if they aren't already retired. How many folks really go more than 30 years without increasing their standard of living? (Not counting, of course, the ones who don't work at all.)

That's the lion's share of your adult life. If you spend that much time working, without figuring out how to get more with less...whose fault is that, really?