Tag Archives: unemployment

Three visions of our future after the robot revolution

Summary: During the past 2 years the robot revolution has come into view, and all but Right-wingers living in fantasy-land have begun to realize it might (like the previous ones) produce large-scale social disruption and suffering. But to prepare for these changes we must first image what kind of world they’ll create. Here we look at three visions about what lies ahead for us.  {1st of 2 posts today.}

“We did not come to fear the future. We came here to shape it.”
— Barack Obama’s speech to Congress, 9 September  2009.

Dark futures



  1. The center-left sees the problem
    ……and offers mild solutions.
  2. Realistic analysis and prescriptions.
  3. Visions of dark futures.
  4. For More Information.


(1)  The center-left sees the problem and offers mild solutions

Slowly, people have come to see the coming robot revolution (aka, a new industrial revolution), even economists. The Left has adopted this issue, as they have climate change, as a means to enact long-sought changes in the US economy. Like climate change, their solutions are far too small for the problem described.

(a) A World Without Work” by Derek Thompson in The Atlantic, July/Aug 2015 — “For centuries, experts have predicted that machines would make workers obsolete. That moment may finally be arriving. Could that be a good thing?” Typical of The Atlantic. Long, meandering, confused mish-mash of issues. Never confronts the core issue of how people will earn money to live. Lots of nonsense about people living by selling crafts to each other.

(b) The Future of Work in the Age of the Machine” by Melissa S. Kearney, Brad Hershbein, and David Boddy at the Hamilton Project, February 2015. See the slides and transcript from the seminar they held for academics and businesspeople. Their prescription is aggressive application of conventional methods…

The Project’s economic strategy reflects a judgment that long-term prosperity is best achieved by fostering economic growth and broad participation in that growth, by enhancing individual economic security, and by embracing a role for effective government in making needed public investments.

(c) The future of work in the second machine age is up to us” by Marshall Steinbaum at the Washington Center for Equitable Growth, 23 February 2015 — They show that the robot revolution has not yet appeared in the macroeconomic statistics. But it’s coming. Their conclusions are the standard center-left recipe, like those of the Hamilton Project…

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The bottom line of the May employment numbers

Summary: The strong May employment number confirms what I’ve said in previous reports about the economy, casting doubt on the bears’ confident forecasts of an imminent recession. The economy was slow in Q1, but the data so far for Q2 paints a stronger if still mixed picture. {1st of 2 posts today.}



  1. Summary of this important report.
  2. Where were the jobs?
  3. Wages and hours.
  4. For More Information.


(1)  Summary of this most important economic number

The May employment data was clearly and broadly strong. See the BLS’ Highlights report for the pictures. BLS revised the gains in March and April by +32,000 and estimated that total nonfarm payroll employment rose by 280,000 in May. This compares with an average monthly gain of 207,000 over the past 3 months and 251,000 over the prior 12 months.

Keep a sense of proportion about these numbers. There are 140 million jobs in America, done by 147 million employed workers. The monthly changes are small and so difficult to measure accurately. Watch the patterns instead; ignore those who obsess over the tiny wiggles in May’s numbers. They are mostly statistical noise. For jobs the overall pattern was strong, but not a breakout.

Job gains through May 2015

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The vital things to know about the latest employment report

Summary: The March employment report is important, confirming the slowing of the US economy. This post skips our usual numbers blizzard, focusing instead on the vital numbers, and debunking both the hype and hysteria about this most important of the economic statistics. {1st of 2 posts today.}



  1. Summary of this important report.
  2. Has Obama’s recovery helped the middle class?
  3. The bottom line.
  4. Does this signal a recession coming soon?
  5. For More Information.


(1)  Summary of this, the most important economic number

The March employment report was one of the worst in the past 3 years. See the Highlights for the pictures. Nonfarm payroll employment increased by 126,000 in March and 197,000 per month over the past 3 months — compared to 269,000 over the prior 12 months. This slowing is consistent with that of the other economics indicators in the past month.

Keep a sense of proportion about these numbers. There are 140 million jobs in America, done by 147 million employed workers. The monthly changes are small and so difficult to measure accurately. Watch the patterns instead.

Employment trend as of March 2015

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How Robots & Algorithms Are Taking Over

Summary: Today we have another essay about the 3rd industrial revolution now under way (aka the robot revolution), reviewing another new book preparing us for what is to come. We’ve had 50 years of warnings, all ignored. We’ll have to move soon to avoid severe social turmoil. Let’s not repeat our ugly 19th C history. {1st of 2 posts today.}

“We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come — namely, technological
unemployment. This means unemployment due to our discovery of means of economising the useof labour outrunning the pace at which we can find new uses for labour. ”

— John Maynard Keynes, “Economic Possibilities for our Grandchildren“, The Nation and Athenœum, 11 and 18 October 1930.

Cover of <i>Galaxie</i>, 1959

Cover of Galaxie, 1959. CCI/Art Archive.

Excerpt from
How Robots & Algorithms
Are Taking Over

By Sue Halpern.
London Review of Books, 5 March 2015

Halpern reviews: Nicholas Carr’s The Glass Cage: Automation and Us.

Here is what that future — which is to say now — looks like: banking, logistics, surgery, and medical recordkeeping are just a few of the occupations that have already been given over to machines. Manufacturing, which has long been hospitable to mechanization and automation, is becoming more so as the cost of industrial robots drops, especially in relation to the cost of human labor.

… Meanwhile, algorithms are writing most corporate reports, analyzing intelligence data for the NSA and CIA, reading mammograms, grading tests, and sniffing out plagiarism. Computers fly planes — Nicholas Carr points out that the average airline pilot is now at the helm of an airplane for about 3 minutes per flight — and they compose music and pick which pop songs should be recorded based on which chord progressions and riffs were hits in the past. Computers pursue drug development — a robot in the UK named Eve may have just found a new compound to treat malaria — and fill pharmacy vials.

Xerox uses computers — not people — to select which applicants to hire for its call centers. The retail giant Amazon “employs” 15,000 warehouse robots to pull items off the shelf and pack boxes. The self-driving car is being road-tested. A number of hotels are staffed by robotic desk clerks and cleaned by robotic chambermaids. Airports are instituting robotic valet parking. Cynthia Breazeal, the director of MIT’s personal robots group … $25 million in venture capital funding, to bring Jibo, “the world’s first social robot,” to market.

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The robots are coming, bringing hope of a better future.

Summary:  Slowly the outlines of the 3rd industrial revolution becomes clear, and with it the only path to a better future for humanity. Today we have an excerpt from a brilliant article about this by British journalist and novelist John Lanchester.

That means the role of humans as the most important factor of production is bound to diminish in the same way that the role of horses in agricultural production was first diminished and then eliminated by the introduction of tractors. The general theoretical proposition that the worker who loses his job in one industry will necessarily be able to find employment, possibly after appropriate retraining, in some other industry is as invalid as would be the assertion that horses who lost their jobs in transportation and agriculture could necessarily have been put to another economically productive use.

— Wassily Leontief ( Nobel laureate in economics), The Future Impact of Automation on Workers (1986).

A woman in the robot office

Excerpt from “The Robots Are Coming

John Lanchester
London Review of Books, 5 March 2015

Lanchester reviews these books:

We are, Brynjolfsson and McAfee argue, on the verge of a new industrial revolution, one which will have as much impact on the world as the first one. Whole categories of work will be transformed by the power of computing, and in particular by the impact of robots.

… We are used to the thought that the kind of work done by assembly-line workers in a factory will be automated. We’re less used to the thought that the kinds of work done by clerks, or lawyers, or financial analysts, or journalists, or librarians, can be automated. The fact is that it can be, and will be, and in many cases already is. Tyler Cowen’s Average Is Over points towards a future in which all the rewards are likely to be captured by people at the top of the income distribution, especially those who become most adept at working with smart machines.

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Highlights of the jobs report, the good news & the bad.

Summary:  Yesterday we looked at leading indicators for the US economy. Today we look at one of the best coincident indicators: jobs. Today we’ll do it differently, seeking answers to the hot questions in the blizzard of numbers provided by the BLS. We’ll examine the good news, and the bad.  Also see the additional info in the comments. {1st of 2 posts today.}



  1. About the collapse of the oil industry.
  2. Has Obama’s recovery helped the middle class?
  3. The bottom line.
  4. Bad news about wage growth.
  5. Making sense of this numbers blizzard.
  6. About ZH’s accusations of fraud.
  7. For More Information.

(1) About the collapse of the oil industry.

The resource sector lost 9,000 jobs, a dot among America’s 148 million workers (one thousand of those were in oil & gas extraction; 7 thousand were in “support activities”). Weekly wages of their non-supervisory workers continue to slowly drop, down 3% to $1,230.

YoY the number of unemployed in the sector dropped 1.4 million, taking the sector’s unemployment rate from 7.0 to 5.7.  The oil bust is too small to have more than a regional impact.  See the BLS Highlights for more info about the growth in jobs by sector.

Feburary jobs by sector

(2) Has Obama’s recovery helped the middle class?

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Status report on the US economy: darkening sky, rough waves ahead.

Summary: Time for a status report on the US economy, reviewing the economic data. Since the crash we’ve been playing out The Perils of Pauline, with repeated rescues from a recession that we’re in poor shape to experience. As usual, the picture is cloudy — despite the steady drone from the stuck clocks of the doomsters and perma-bulls. We don’t provide spuriously confident forecasts. I expect another year of slow growth, but recommend preparing for a recession while hoping for a boom.  {2nd of 2 posts today.}

GDPnow forecast for Q1

Manufacturers’ New Orders: ugly, and falling

Many key economic indicators use components of this. New orders for core capital goods goes into GDP. New orders for consumer goods is a leading indicator, and leading down quite rapidly (the weakness is in nondurable goods). The report gives no details on the nondurable goods number. It includes fuel, but the decline seems too large for that alone to explain it.

New Orders for Consumer Good

Total New Orders are also quite ugly, down during each of the past six months.

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