How Certain Is A Future Of Massive Unemployment?

I was recently invited by a school in Johannesburg, to participate in a focus session made up of parents to discuss the future curriculum development for today’s learners. It was a really interesting and stimulating conversation. A few of my observations include the following:

  • Not one parent suggested marks / grades on reports are important markers required to prepare our children for a largely unknown future. In fact I’d even suggest that most parents felt it quite an antiquated approach to assessment
  • Not one parent asked for tests or exams
  • Every parent was of the view that the traditional path to and through university has never before been as uncertain as it is now as a guarantee of success or even a job in the future
  • Everyone in the room, teachers included, had no idea what the future would be for today’s preparatory / primary school learners, and if there wasn’t a dramatic shift in how we approach education, we could quite easily one day be accused of irresponsibly gambling with our children’s future.

I’m not a great optimist with regard to the future employment of people. As optimistic as I often am, I can’t see the current system shifting sufficiently (of it’s own accord) to a place that ensures that people have adequate employment to earn an adequate amount of money. I also don’t see wealthy enough governments and countries to create a welfare net large and robust enough to cater for the large number of people who will require it.

The first time I began to think on these things was coming across an graph that looks similar to this one from MinnPost….

What you’re looking at is the distribution of labour in the US over almost 200 years across 3 sectors (agriculture, industry, services). With a massive decline in Agriculture (as you’d imagine with the advance of technology) the US didn’t end up with massive unemployment. There was a significant growth in the services sector that picked up all those people unemployed by job shedding in the agricultural sector.

The Significance of the Graph

Why this was a significant graph for me was that technology has shifted it’s focus away from agriculture (there isn’t much left to do) and is attacking jobs in the services sector (worldwide). When you hear of people losing jobs it’s often in the services sector. As technology advances, and companies are under increasing pressure to return quarterly growth to their shareholders, there are only two ways to make more money….. sell more things, or cut more costs. Frankly we’re not currently living and working in a world that’s selling more things. This is a world in which companies are making more money by cutting more costs, and the largest cost to a company is often it’s people.

Douglas Rushkoff, author of Throwing Rocks at the Google Bus, states that for every $10 000 000 that Amazon earns, it hires 14 people, and for every $10 000 000 a traditional brick and mortar store earns, it hires 47 people. While you might be really impressed by Amazon’s efficiency, you should probably extrapolate this behaviour to every ‘Amazon’ you know and then think carefully about who’s going to buy from those ‘Amazons’ when all those people no longer have a means to earn any money. Efficiency that only achieves value extraction and not value creation for people (don’t read shareholders) is not a sustainable journey we want to be on. Right now, we’re so very on it.

Two Scenarios

When you look at the graph above there are, simplistically, two scenarios that describe the future. The one is that because we’ve done it once before (the rise of the services industry in the mid to late 1800’s) we’ll do it again. We’ll find growth opportunities and everyone will be employed and it’ll all be as it once was. The other is less optimistic, and that is that we’re not going to find new growth opportunities. The gap between the haves and the have-nots will increase, robots and machines will take the jobs of people and we’ll unemploy a large chunk of the population in a very short time period. Governments will not have the reserves required for a welfare net, and there’ll be trouble. Trouble in the worst possible way.