You may have heard lately, here and elsewhere, about the “jobless recovery.” While a number of the traditional leading economic indicators demonstrate that our nation is coming out of the economic malaise characterizing the past few years, unemployment and job creation statistics aren’t matching up. While the debate could become endless whether a “jobless recovery” is or should be an oxymoron where policymakers are concerned, economists are still grappling for an explanation as to why the economy is growing when its workers aren’t. A recent article suggests one explanation: the number of businesses investing in new equipment is increasing significantly, while the numbers reflecting businesses who invest in new employees isn’t budging.
In the story Player Piano, author Justin Lahart cites the statistics that document the problem: in the last five years, the cost of labor (the Employment Cost Index) has risen 21 percent, while the cost of equipment in the same period has fallen 9.2 percent. Tax incentives such as depreciation allowances further deepen the cost divide between man (and woman) and machine. As economist Paul Kasriel puts it: “People got too expensive and they’re still too expensive.”
This probably shouldn’t come as a huge surprise. After all, machines don’t require health benefits and vacation days. And why does it always seem that the managers who are the hardest to work for get along quite well with the machines? While machines and people both seem to need sick days when it’s least expected, it’s often easier to get the machines up and running at full capacity than to accommodate disability, pregnancy, and family leaves. Aside from the occasional hardware and software incompatibility, machines often do better than workers at communicating with each other and working together successfully. Technology advances are always boosting a machine’s productivity, and we thought that would work with humans as well, as cell phones, web browsing and e-mail started taking over everyone’s off-duty hours and vacation time. Machines handle burnout much better than humans–you just get a new one or replace a part, while the toll of constant stress and fear of unemployment is harder to quickly fix in human beings.
However, machines and humans need each other. Who is going to build all the machines if all the manufacturing jobs go away? It appears that the answer in the short run may be workers in China and India and other companies around the globe rather than workers in the U.S. But who is going to buy the things that the machines make, if no one here has income that makes discretionary spending possible? Moreover, if employers and insurers don’t help subsidize the cost of health care, we all know that the American taxpayer pays the price. We need healthy, educated, and skilled workers to design the machines, run the machines and fix the machines’ malfunctions, and to step in where a human touch is and will always be needed.
And preliminary attempts at creating glitch-proof voting mechanisms notwithstanding, machines aren’t going to be doing any voting in the 2004 elections. People are, and the candidates that promote business interests and the purchases of yet more machines with tax breaks and incentives, without considering the interests of human workers, may just find that a machine isn’t an adequate substitute for the American worker after all.