Global Economy, (Un)employment, and the Future – 2016 Update

Back in 2011, I wrote this post on the state of the global economy. Five years have passed, so a quick update on that for 2016:

Global population 2016 (just Google it!): 7.4 billion

Global Employment (And Sector Breakdown)
Workforce: 3,273M people (3.3 billion)
916M / 28.0% in agriculture
718M / 21.9% in industry
1639M / 50.1% in services

Unemployment and Job Security
~200M unemployed
1.5 billion / 46% of the global workforce are considered “vulnerable” — non-salary self-employed (small businesses, contract workers, migrant farm workers, gig economy workers, etc.) or working for little / no pay for other family members (farms, businesses, etc.)

Manual Labor Increasingly Devalued
1 farmer with modern technology in the US can feed ~155 people. If we enabled farmers globally to operate at the same levels of efficiency, we’d need roughly 48M farmers (5.25% of current number) to feed the world — this is without major inroads from emerging robotic / AI technologies into agriculture. (Current-gen precision agriculture isn’t the same as autonomous agriculture, which is where future gains are to be made). In other words, about 95% of the people employed in this sector are ultimately replaceable with current technology, and that number is likely to increase with better automated technology.

Manufacturing employment has been decreasing by ~0.4% / year, down to 11.5% in 2014 (~360M). Full automation with AI is unlikely to make human involvement more necessary.

New Jobs in New Industries Can’t Keep Up
Less than 0.5% of jobs in the US in 2016 are in “new industries” (ones that didn’t exist in 2000, including renewable energy and biotech) enabled by technology.

Based on the above 0.5% figure, in the US, we’re shifting about 0.03% of workers a year over to new industries, while as many as 47% of jobs in the US could be lost to automation by 2035 (see this report). This is not remotely fast enough; losing 47% of jobs and replacing 0.03% / year, it would take roughly 1,566 years to simply catch up with loss. This also doesn’t account for the need to add another 20-30M jobs overall to the US economy to compensate for labor force growth due to population growth between now and 2035 (source). This also questions the “people just need to retrain” response put forward even by some experts. Retraining is useless if there are no jobs to be had for retrained workers, presuming they can retrain quickly enough to keep up with changing technology in the first place (unlikely).

A Note About That “Gig Economy” Work
The so-called “gig economy” is not a solution, and might actually be dangerous. People working contract gigs (rather than being salaried with benefits) are pretty much the very definition of vulnerable workers per ILO. These jobs typically have no long-term reliability and no benefits, particularly health care or pension plans. It’s not surprising that countries with high ratios of self-employed to full-time include countries known for corruption and instability such as Mali, Niger, Liberia, South Sudan, and Sierra Leone – full discussion here.

Surprising no one, I was unable to find decent statistics about income distribution on common sites like Upwork or Fiverr, but it’s likely to resemble the app store profit curve, where almost nobody outside the top few percent of earners are making enough to survive in developed economies.

Still no indication that there are ever going to be enough jobs again. In the US, neither major candidate for US President in 2016 is acknowledging the degree to which this is a problem; Trump will blame the unemployed for their own predicament and Hillary is too out-of-touch to understand how difficult things are becoming for the “average” American. A Hillary victory seems likely to make the 2020 elections even more friendly to a populist demagogue candidate due to a build-up of frustration and desperation. Trump will embolden people to take their frustrations out on each other, particularly if the “other” isn’t a flag-waving white Christian.

Needless to say, we need to treat this more seriously than it’s currently being treated. Per my last post on this topic:

“Liberals” think that “conservatives” are keeping them poor. “Conservatives” believe liberals are lazy hippies who just need to get a job. Communists say that communism will save the world, and the Ayn Rand fans wave the banner of individualism and capitalism as some sort of cure-all. All of them, I think, are wrong.

The debate must be reframed in terms of a world where we no longer need everyone to work and there will never again be enough jobs.^ What sort of world do we want that to be? While I believe that not everyone needs to work, I believe most people are happier if they are being productive members of society in some way, so we need to refashion our economic realities to provide them an opportunity to do so and to have a basic standard of living. I don’t know what this world will look like. I don’t know if we will ever get there. I don’t believe capitalism is the answer, nor do I believe that communism is. Humans have a competitive instinct that must have an outlet, but must also be channeled for the greater good.

Out of time, but I’ll follow this up at a later date with thoughts on possible approaches to change. In the meantime, the links above should provide food for thought.

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