I was just struck this morning by the absurdity of a jobs shortage. Isn’t that a crazy idea? There’s just not enough to do? Really? Because I don’t feel like there’s too little to do. In point of fact, I feel like there’s way too much to do and not enough hours in the day to do it all.
I suppose that, economically, a jobs shortage is really a demand issue. When there is not enough consumer demand, we see that as a jobs shortage.
When there are too few jobs, the government can spend money to increase consumer demand. When there are too few jobs, the government can spend without competing with the private sector.
When there are lots of jobs, that means that the private sector needs people. Then it has to compete with the government to get those people. That reminds me of the Eisenhower quote:
This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement.
When human labor is scarce, we must choose how to spend it. Schools or bombers? Ships or hospitals? There are only so many people. There are only so many man-hours for labor. It takes a certain number of man hours to do these things. We allocate those hours using an accounting system called dollars, and the premise is scarcity.
But when excess labor is abundant, we don’t have to give up the bomber to build a school. There are “spare” hours going into TV, Facebook, and World of Warcraft. Lest you think I’m joking, WoW users have logged about 50 billion hours of game time. For comparison, we spent about 4 billion hours on the Apollo project (and that’s a generous estimate).
There are spare hours, why are there not spare dollars?
Automation will exaggerate this situation further. The creation of “stuff” will require fewer man-hours (that sounds good). That leaves more spare man hours without a way to translate them into dollars or economic demand (that sounds bad).