The Unemployable

I'm not sure I even need to provide a link to the UK riots. There's already a Wikipedia page about it.

I've recently been considering an idea to which these riots seem to be related. This idea is about the marginally employable - or quite possibly, unemployable.

The society we have right now rewards talent. The more talent you have, the less you need to work to enjoy material comfort. If you have lots of talent, your work can be comfortable and fun, and you might make millions. If you have mediocre talent, you can still prosper if you work hard. If you have no talent, you need to work your bottom off to pay your bills.

With talent distribution being the bell curve that it is, there are bound to be unfortunate people with little to no talent. With talent being somewhat hereditary, a disproportionate number of these are likely to be born to parents who also lack talent. This means that people without talent are more likely to be poor, and the poor are likely to be stuck there.

Not so long ago, if you didn't have a talent to contribute, you could still contribute work. Manual labor was in relative demand. If you could operate a shovel, you could find work.

As time goes by, we are replacing more and more manual labor with machines. This would be wonderful if every manual worker was able to graduate to work that takes more skill, e.g. to operate machines. But it seems to me that this isn't the case. Many people who would have done manual labor in the past, will in the future have fewer and fewer ways to help the economy.

Unskilled people in developed countries are also being squeezed by competition from developing countries. At the moment, there remain many jobs that employ manual labor. But these jobs seem to have been exported to developing countries where labor costs are lower. The people suffering the most from this are unskilled people in developed countries. The jobs that remain in developed countries take more skill. The unskilled workers have to compete for those jobs with skilled people, and are losing.

This situation pretty much requires governments to step in and bridge the gap. They have done so. The cost of cheaper products from abroad is a more expensive social state, which needs to help the unskilled workers as long as unskilled jobs remain exported.

I don't see a way of fixing that, other than allowing companies in developed countries to compete with developing countries on the same terms as permitted there. This means the same low pay, and the same lack of protection laws. This would make unskilled workers even worse off than on social welfare, so it's unlikely to happen unless the social state goes broke.

In several more decades, developing countries will become developed. Their salaries will rise, and unskilled jobs will start to come back to countries they came from.

But will a large enough number of unskilled jobs come back, or will technological progress cause the number of unskilled jobs to still be exceeded by the unskilled workers in the population?

On the one hand, national IQ levels are rising over time. I attribute this to the dominance of genes that lead to intelligence, which proliferate as people mix.

However, I suspect that technological progress will be faster than the rate of natural human improvement. Unless we invent ways of improving ourselves, I suspect that an ever-larger portion of humanity is going to find themselves on the margins of the global economy. They will be in a state where they cannot contribute, because all the work they can do will be done more efficiently through automation. In a state of ultimate technological progress, where all aspects of the production of any good are automated, there will no longer be space for the existence of anyone but the brainiest individuals, and those providing personal services to them. Everyone else will have no way of earning goods, unless they receive them as a gift from those who still play a part in the economy. It might be a direct gift, such as in charity, or a systematic gift, such as in a social state; but it will be a gift nevertheless.

Unless we invent technology to improve human mental abilities, an ever larger share of the population will become dependent on the sheer generosity of an ever smaller pool of people who have skills to contribute. Whether this generosity will be forthcoming, and in what form, is up for anyone to speculate.

We could change our system to reward effort, rather than the good it does. But that's what communism did, and it impedes progress through misuse of resources. It is better for everyone to keep rewarding that which has results, and therefore to reward talent, while giving away part of the proceeds as social welfare.

One could argue that a social welfare state where everything of value is produced by a few people, and everyone else is on welfare, could be similar to heaven. Why, yes, that in fact could be the case. We could live very well in an automated system where most of us are not needed, or even useful, in the production of what we consume.

But for examples of states where the needs of citizens can be provided for without their input, look only at countries like Qatar, Bahrain, Kuwait, or Saudi Arabia. Their oil exports are 40-50% of GDP, and the rest is, to a smaller or greater extent, foreign workers. Instead of creating heaven on Earth, material security has enabled these nations to indulge in dysfunctions from cultivating religion to oppressing women.

Either way, the outcome is questionable. I think a much better bet is technology to improve how well we think.


Rob said...

are you a rioter sympathizer?

The Horse said...

Interesting post. This underclass is just that a class of people who have been raised on social welfare. There is a need for social welfare or we would have third world conditions where people are unable to eat or get basic services.

However criminal actions such as taken in the riots are still criminal actions. There is no excuse if your unhappy in a democracy you have the right to vote so you can make a change.

denis bider said...

Rob: are you a rioter sympathizer?

No, the riots were despicable. They might be loosely related to politics, but I think it was primarily a bunch of violent-minded people seizing the opportunity to indulge in violence and grab free stuff at other people's expense.

My first instinct was to call for the police to shoot them. I would have very little remorse about that. They clearly demonstrated with their actions that they don't belong in civilized society.

Most of the rioters, it seems to me, aren't even marginalized. They are provided social support, health care, and education. People at subsistence poverty don't act out this way. This sort of lashing out is something done by spoiled brats with a sense of entitlement.

However, the riots have led to people discussing its "economic causes". While this doesn't excuse the riots, and I don't even think it's their main cause, it does lead me to consider what lies in the future.

The Horse: There is no excuse if your unhappy in a democracy you have the right to vote so you can make a change.

The right to vote is worth crap. The influence of any individual's vote is as minute as his chance of winning the lottery. The choices you're helping decide about are heavily framed; the unintended options are excluded to begin with. The mass media "news" machine ensures that facts about the world are presented selectively, and with spin such that public opinion will back the interests of people for whom politics are done.

There may be countries where democracy works better, and where government conduct is more transparent. But this is what politics are like in the US, and I don't have the impression that the UK is much different.

History Man said...

If we lived in a purely meritocratic society then talent would be premium. Bright and able people would rise automatically to the best positions. But we don't live in a meritocratic society. Many people (perhaps most) get to where they are not by talent, but by drive and determination, bullying or particularly in the UK family or school connections. I'm sure we can all think of people who fit this, from Dubbya downwards.

denis bider said...

History Man: If we lived in a purely meritocratic society then talent would be premium. [... But] many people [...] get to where they are not by talent, but by drive and determination, bullying or [...] connections. I'm sure we can all think of people who fit this, from Dubbya downwards.

It is questionable to presume that people in the best positions aren't bright and able.

Some positions, particularly political positions, do in fact seem to be assigned on the basis of political connections, not on the basis of technical competence.

Politicians in the UK and US generally are bright and able. The problem is that their brightness and ability are mostly about getting into power, not about exercising that power for the greater benefit.

On the other hand, positions in the industry do tend to be assigned to people who are competent at the job. It's dubious to claim that chiefs at companies like GE or Renault-Nissan aren't competent, for example. It's also dubious to claim that their lieutenants aren't competent at what they are doing.

As a counter-example, consider the economies of former eastern socialist states. In socialist economies, people who held economic power were in fact appointed by the same principles as people who held political power. This led to the same type of widespread dysfunction in the economy, as the west is familiar with in politics. Vast industries were making products no one needed, companies were routinely operating with losses, because the leadership was inept.

That was a good example of how an economy fails when it's not a meritocracy; when connections, rather than ability, determine people's positions.

If you think western economies aren't selecting for people who will perform competently at their jobs, then you might have unrealistic ideas about what competence consists of.

Zany Zen said...

I think it's time for nations to seriously consider a guaranteed minimum income. For the US, a monthly stipend of say $800 for every adult would supplement their income decently and would provide a safety net for people who are down on their luck. If the US spent less on military and either scrapped or severely reduced other gov't programs along with raising taxes on those those in the upper income brackets, there should be enough money to provide everyone with a modest income. Perhaps those earning over say, $60k annually should be disqualified from the guaranteed income, as they really don't need it.