The Atlantic & Tyler Cowen on Why Jobs Go Unfilled (and Why It May Not Be The Worst Thing)

I heard a great piece by the always excellent Tyler Cowen on the radio today. One quote of particular interest:

"Imagine a very large bohemian class of the sort that say, lives in parts of Brooklyn," Cowen explains. "... It will be culturally upper or upper-middle class, but there will be the income of lower-middle class. They may have lives that are quite happy and rewarding, but they may not have a lot of savings. There will be a certain fragility to this existence." (Tired Of Inequality? One Economist Says It'll Only Get Worse)

It overlapped with a piece I've been meaning to blog about for a while "Why Jobs Go Unfilled Even in Times of High Unemployment".

Of all the near term future views, this feels the most correct. But it's not (necessarily) a bad thing!

Let's go back 100 years, and compare the same lower middle class existence. You worked in a factory 50 hours a week, lived in a hovel, had a million kids  and died before you turned 50.

What will the same lower middle class people have today? Earn $40k/year, save nothing, have a car, iPhone, clean water and plenty of food, commute about 45 minutes each way to work and probably live to 70. And that's all before the robots!

This does remove a ton of choice - it's not like they can choose to travel the world after they retire, or even retire - and, to use Mr. Cowen's excellent choice of words, "a fragile existence", but it's also not backbreaking labor. If the wealthy chip in an even stronger social safety net, these people may even go out and take some risks - we'll see if that ever comes to pass. I have long thought that the wealthy have a huge benefit to (partially) funding the non-wealthy's leisure; I would argue that giving them money to spend encourages them to spend the money on the things the wealthy's firms produce - win-win!

As an aside, the skill thing feels a little bit off - or at least it feels like a rural only thing. In many cities, there are actually many jobs that can be filled by even people of modest skills. The other day I spoke with a Postmates delivery kid - he said he worked 30 hours that month, and earned $1800. CRAZY.

EDIT: Someone pointed out the very interesting review of The Lights in the Tunnel which also covers this very thing. It's going to be a race - utopia provided by automation vs. the jobs that automation kills.