The Speculist: Government Jobs

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Government Jobs

The worrying graph shown below has made the rounds in the blogosphere over the past few days.

govemanufacturing6908.jpg

Here we see how the United States now has more people employed by government than work in manufacturing and construction. Some read these numbers and see certain doom. It's the tipping point! How can the economy possibly survive when fewer and fewer of us produce any wealth, while more and more of us get a share of what wealth is produced through labor that is not productive (at least not in the economic sense)?

To begin to answer that question, I offer the following two videos. You only need to watch a little of the first one to get the basic idea. The second one is pretty short

So how many human beings are required to assemble a Ford Model T in the early 20th century versus a Toyota (the comments suggest possibly a Tercel) in the early 21st century? It's all about the productivity numbers. These figures are what you have to consider before bemoaning the loss of jobs in manufacturing and construction:

productivity4707.jpg
Source: Bureau of Labor Statistics

Over time, these increases in productivity mean that it takes fewer and fewer people to produce goods. So unless we're going to produce way more than we could ever consume, it's inevitable that more and more people will be employed in non-productive jobs. A possible endgame is that one day the robots will do all the real work, and those of us who aren't government bureaucrats will work in the corporate world with job titles like "Director of Organizational Emphasis" or "Senior Manager, Strategic Thoughtspace."

Or maybe we'll drop the charade and just let the robots put us all on some kind of allowance. If everyone gets whatever they need (in the material sense) from helpful productive robots, a very different economy takes hold. In that world, the "wealthiest" individuals might be those who come up with the best ideas, or who display the most talent, or who hold the most sway with other people -- or with the robots.

It's a daunting idea, but it certainly sounds like more fun than having us all end up working for the government.

UPDATE: Yeah, but that future when the machines are capable of taking over is decades, maybe centuries away, right?

Don't count on it.

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