Government Can’t Fix This

Unemployment comes in two flavors.  Cyclical: caused by temporary downturns in the economy, fixed with an economic recovery.  Systemic: caused by deep, long term changes in the nature of work, robot+body_builderfixed by making deep, fundamental changes in the skill sets of employees.

The US is experiencing both, but the real problem is systemic.  And no government can fix this, because worthless skill sets need to be upgraded one person at a time.  Government can’t make anyone want to make deep, long term upgrades in their individual skill set.  All government can do is pay people to strut around touting skills that have no value anymore; to rot; to do nothing.  Disability welfare.  Unemployment welfare.  “Retraining” welfare.

At the core of the employment crisis in the US … both the high rate of unemployment and the stunning ‘dropout’ rate … is the massive infusion of technology into the manufacturing base; the 40 year long loss of manually skilled and unskilled, repetitive assembly and manufacturing jobs.  This also accounts, btw, for much of the continuous, long term shrinkage of industrial unions.

Tie these two graphics below together in your mind.

A quick glance is all you need. The red line is an index of total employment in manufacturing over the last 41 years.  The blue line is total manufacturing production.

fredgraphAA quick glance is all you need.  The red line is employment per hundred Americans of all ages.  The blue line is workers per hundred, excluding children and the aged.

fredgraph

 

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