Not withstanding a recent and maligned attempt at humor on my part, the impasse between Conservatives and Liberals on the fiscal crisis grows ever more serious. Now, my favorite moderate, David Gergen, has chimed in to wax pessimistic over the possibility of any kind of deal. Gergen is a serious and pragmatic man. If he thinks it’s serious, then I believe it is. This is truly unprecedented in my lifetime.
According to Gergen, and this is backed up by everything else I’ve read about it, the GOP has firmly locked themselves into a monolithic no-compromise position on any raise in taxes. This intransigence has angered the more extreme Democrats, who are likewise resisting any attempts at entitlement reform. And in the background looms an economy mired in stubborn unemployment.
If the economy could only recover, we wouldn’t be in this mess. Tax revenues would be higher and businesses wouldn’t be scared to hire. The newly employed would be earning and buying, further sparking the economy. So why isn’t this recovery like past ones, where businesses and industry yield to the need to hire? Well, I have posted before about what I think the “root causes” are, and by that I mainly mean “inefficiencies”. But I suggest there is another very important factor: in a word, it is productivity.
An article in USA Today explains how a GM plant, under pressure of reorganization, rediscovered a long-known secret to productivity, i.e., cross-training. That means training people to do more than one job. This pays enormous benefits. First of all, there is someone to fill in for unexpected absences. It makes for happier, and less-bored employees. They are more-fulfilled and more likely to take ownership of their jobs and pride in the product.
I believe that businesses all across the country have discovered productivity in similar ways under the pressure of the Great Recession. They have learned to do more with less. And what is it that American businesses do, anyway? 76.9% of it is the service economy – that means running restaurants and fast-food shops, hospitals, schools, banks, insurance companies, newspapers, tourism, utilities, and the like. 76.9% of us are waiting upon each other’s daily and routine needs, and many have learned, with the help of automated equipment like computers and Bobcats, to do it more efficiently. (When’s the last time you saw a guy wielding a shovel?)
What makes up the rest of the economy? Industry accounts for 21.9%, and that would include making cars, heavy equipment, airplanes, tanks, bombs and submarines. You might think things like farming are an important source of employment, but you would be wrong. While farming relies heavily on unskilled labor for harvesting, it is seasonal and not the kind of labor that results in benefits-costs. Farming is highly automated and efficient, but as far as its permanent workforce goes, it is tiny. Almost unbelievably, according to Wikipedia, if you combine its labor force with those of fishing and forestry, it is still only 0.7% of the total! A typical price list of farm equipment is revealing of its dependence on automation. A new tractor: $220,000 (GPS included, no doubt). New grain bin: $60,000. New sprayer: $30,000. New farm hand: $0 (no thanks, don’t need any). So, if you are counting on farming and the global economy’s increasing hunger for farm products to boost employment, you had better think again.
I read a science fiction story in my youth, title and author now lost to memory. It predicted a future when all the work would be done by robots and automated factories. Mankind would be freed to spend all its time at leisure and would actually compete for a tiny number of meaningful jobs, jobs in the arts and a few in science and politics. Well, it turns out that utopia isn’t all that pretty after all, is it? The world has changed, and David Gergen knows it.