Hacker News Reader

Comment by angstrom | Hacker News Reader

Peak Labor. Anyone that's ever argued this in the past 200 years has been called a luddite. Yet, in the past 40 years as computers have automated more work, both labor and white collar, it's become clear that the productivity gains are only making it into the pockets of the 20% or so that own investments.

View on HN

That's exactly right. Recently Foxconn in China has started to replace some of its workers with automation. Think about that: when even low paid work in China can't beat automation, you have a problem. There used to be a place for unskilled/semi-skilled labor: factory work, travel agents, insurance sales people. It's what created the middle class. And it's gone. Now you have the owners of the travel web site making a fortune and the rest struggling to find a way to contribute.

It seems we have passed the tipping point for unskilled/blue collar and a good portion of white-collar labor. The future doesn't need the bottom 90% at all.

If unskilled labor is no longer needed for factory work it becomes available again for other low cost service work. A century ago lots of families employed a nanny, a cook, a cleaning lady and a gardener. Perhaps we will return to that time.

There are some services with unlimited demand, like healthcare.

My guess is that the demand will switch to other services as well, like the nannies you mentioned and better education and other wealthy-person services: personal trainers, nutrition, leisure, party/wedding planners, clothing advisors, gourmet cooking. There will also be a lot of services needed for the elderly.

Of course, competition will be cut-throat, but those jobs that cannot be made more efficient or paralellized (those with a high amount of in-person involvement) will sustain the new middle class.

Roomba, self-cleaning ovens, ... do I need to go on?

Yes, people can move to service work but there's not much demand for it. I live near Monaco and the people I know who could easily afford such domestic help tend to get by with less than you would expect.

Besides, do we want it to be 10% has the other 90% working for them doing cleaning and cooking?

The productivity gains also make it to everyone. That's why you are able to buy a computer for so cheap these days. A PC used to cost more than 10 000 dollars in the 80s. There's no such thing as productivity gains being valuable only to investors. It's a win-win for both investors and consumers. It's no zero-sum game.

Can you eat a computer? Will it treat your hernia? No. You need a job that gives you money for those things, and not everyone can hack it as a programmer.

I am using computers as an example of how productivity gains benefit everyone. I was replying to the claim that productivity gains only enrich the investors, which is patently false. I was not talking about jobs at all. My point is that the whole planet (as a whole) is getting richer, whether you realize it or not.

PCs dropping from $10000 to $300 are not representative of almost anything about the last 30 years. Holding up PC prices or CPU speeds as an example of general economics is particularly contrived.

He did not say that the drop in the price of PCs was representative. He (successfully, I think) provided an example showing that a gain to productivity benefited everyone, not just the holders of investments.

What is an example of an industry where gains to productivity don't benefit everyone? Gains to productivity in farming enable the price of food to drop. Gains to productivity in housing enable the price of housing to drop. How does it only benefit the rich?

Even if the price does not drop directly as a first-order effect (such as if the company whose productivity is boosted keeps the difference as a profit), it will eventually through market pressure; a new price equilibrium will be established. In perfectly competitive market (such as food) a competitor will use the productivity boost to lower costs and undercut the first. The resulting competition will lower the market place. Productivity gains lower prices (real prices), benefiting everyone.

I'm trying to be careful not to argue that "gains to productivity don't benefit everyone". My personal feeling is that probably sometimes it does and sometimes it doesn't, but I haven't researched it enough to back that up.

Mainly I think discussions of any squishy data set carry a lot more weight once we throw out some outliers and general purpose computers are a definite outlier.

Food production in the US is one of the most heavily subsidized (i.e., artificially manipulated) sections of the economy.

Okay. Suppose I am a secretary, but my job has now been automated out of existence by Microsoft Excel. I have a $300 computer to browse Hacker News with, but no job. How did I benefit?

Unless I have steadier access to food, shelter, healthcare, and a safe society, I don't think it should count as a productivity gain or increase in standard of living.

Hmmm, You tie money with a definition of a modern 'job'.

The way I see people used eat, get cured of disease and live how we live today. Without the traditional definition of a job as we know today.

People will have to continue to work to make a living. But it may not necessarily be a job meant in the sense of working for large corporate etc.

What you have to realize is that, while 30 years ago only the rich could afford computers, now the poor can afford the exact same one.

In fact, the field has leveled so much, that the rich can't get more bang for their buck. I spent $2,500 on a maxed out MBA, but my super rich friend can't spend $25,000 or $250,000 to get something better. Same goes for iPads, iPods, iPhones, anything in technology.

Another example is Gmail. It's free, and arguably it's the best there is. Rich businessman are stuck in email for most of the day, but they can't do better what I get for free in Gmail. (In fact, they're probably using suckier corporate email.)

It's not food, it's not medicine, but this phenomenon is still pretty notable if you ask me.

Reply on news.ycombinator.com