Productivity and Unemployment
James Anderson at Miyanville displays the same graph (from CalculatedRisk) I used in my last post on jobless recoveries getting longer and notes that advancing technology is underlying the trend. He gives the example of UPS which has recently announced the elimination of 1800 white collar jobs specifically due to improving automation technology:
Not to pick on a great company, but here’s a typical example. UPS (UPS) last month guided higher fourth-quarter earnings…, and also said that it planned to lay off 1,800 people in management and administrative positions in 2010. Here is the operative quote: “By leveraging technology and the management strengths of its people, UPS will reduce the number of Districts and Regions in its US small package operation.” That technology was not faster trucks, it was better computer systems.
Anderson goes on to wonder how long it will take the job market to recover and speculates 2016. But, as I’ve pointed out here previously, technology is not going to stop advancing and by 2016 there will be many more jobs subject to both automation and outsourcing than is the case today. Full employment is a moving target that is going to get harder and harder to hit.