Growing jobs crisis in the age of technology

"The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds."

- John Maynard Keynes

According to the Labor Department, 209,000 jobs were added in the month of July. But if the numbers stay true to last year's, then a whopping 61 percent of jobs created were low-wage and 77 percent were part-time. To make matters worse, workforce participation is at its lowest point in more than 30 years.

Some will blame President Obama, Democrats, or the Affordable Care Act for this growing economic trend. Others will blame Republicans for not raising the minimum wage or passing a national jobs bill. Both arguments may have some merit in the short term. However, in the long term, the economic situation may be bleaker than most would care to admit.

Greater productivity due to automation is driving down prices of material goods while killing jobs. As pointed out by David M. Kennedy in his book, Freedom From Fear, by 1925 a Ford Model T rolled off the assembly line every 10 seconds. A decade earlier it had taken 14 hours to assemble a single car.

Before the automation of manufacturing came agriculture. At the dawn of the 20th century, agricultural output had surpassed demand, and millions moved from the countryside to the bustling cities to find employment. Yet that wasn't enough. In the depths of the Depression, with millions of farmers looking for assistance, the federal government took unprecedented action. That action continues today, with farmers still receiving subsidies to control prices and wages, and to ensure an adequate food supply. Yet about $165 billion worth of food (40 percent of the nation's food supply) is lost due to overproduction, distribution mismanagement, or individual, restaurant, and family waste, according to a recent CNN report.

With agriculture and manufacturing considered the first casualties of automation, many economists would add aspects of the housing industry to that list after the Great Recession, with other sectors of the economy likely to follow.

Larry Summers, a treasury secretary during the Clinton administration, recently wrote that the challenge going forward won't be the scarcity of goods, but rather their overabundance. Furthermore, he states that because productivity is extremely high, producing enough good jobs will be a challenge. He's not alone in this bleak assessment.

Peter Edelman, a former aide to Sen. Robert Kennedy and a professor at Georgetown University, writes in his book, So Rich, So Poor: Why It's So Hard To End Poverty In America, "The future may be one not only of more low-wage jobs but also of not enough jobs, period."

A report titled, "Programme on the Impacts of Future Technology," by the Oxford Martin School estimates that 45 percent of U.S. jobs are at a high risk of being automated in a couple of decades. To put that in perspective, there were roughly 143 million people employed in 2012. That means about 64 million jobs lost if those estimates are accurate.

The author of the study stresses that as technological innovation accelerates, workers will have to transition to tasks not susceptible to automation - such as those that require creative and social intelligence. How smoothly this technological transition will occur, especially if government assistance will be needed, is anyone's guess. Since most elected officials and policymakers refuse to acknowledge this crisis exists, the transition could prove anywhere from difficult to disastrous.

There is much that could be done in the short term to lessen the negative effects of automation. One step would be to institute an infrastructure project modeled after the New Deal-era Works Progress Administration. Investments in traditional infrastructure, such as roads and bridges, could be coupled with high-tech investments in solar panels and fiber optic cables. With unemployment for millennials accounting for some 40 percent of the total unemployed, there's more than enough manpower available for such an ambitious project.

As for the cost, all I can say is that it would be money better spent than fighting two wars, giving tax breaks to the wealthy, or expanding the welfare state. Simply put, while Democrats and Republicans endlessly squabble, jobs are not being created at a rate that would keep up with a rapidly expanding population. And the jobs that are being created are not even close to the caliber of those that came about during the economic heyday of the 20th century.

An open and frank discussion must occur to address the links between automation and employment. Unfortunately, leaders in Washington are too busy with political posturing and grandstanding to focus on any singular issue. That means the responsibility for addressing the issue will likely fall to state and local governments, an approach that has seen some success with regards to advancing gay marriage and raising the minimum wage.

In short, the nation must adopt new ideas for the 21st century or be trapped searching for a past that will never return.