2009 May 31 Sunday
Robert Reich Says New Knowledge Destroying Routine Jobs

Jobs that do not require a lot of thought are getting wiped out by automation (in case you didn't already notice).

Want to blame something? Blame new knowledge. Knowledge created the electronic gadgets and software that can now do almost any routine task. This goes well beyond the factory floor. America also used to have lots of elevator operators, telephone operators, bank tellers and service-station attendants. Remember? Most have been replaced by technology. Supermarket check-out clerks are being replaced by automatic scanners. The Internet has taken over the routine tasks of travel agents, real estate brokers, stock brokers and even accountants. With digitization and high-speed data networks a lot of back office work can now be done more cheaply abroad.

Any job that's even slightly routine is disappearing from the U.S. But this doesn't mean we are left with fewer jobs. It means only that we have fewer routine jobs, including traditional manufacturing. When the U.S. economy gets back on track, many routine jobs won't be returning--but new jobs will take their place. A quarter of all Americans now work in jobs that weren't listed in the Census Bureau's occupation codes in 1967. Technophobes, neo-Luddites and anti-globalists be warned: You're on the wrong side of history. You see only the loss of old jobs. You're overlooking all the new ones.

What is the defining characteristic of the routine jobs that are getting automated out of existence? They place low cognitive demands on workers. So the jobs that are going away are the jobs that dummies can do. The demand for workers on the left half of the IQ Bell Curve is declining. That's the most important trend in the labor force of America and every other industrialized nation.

What types of jobs are experiencing demand growth? Brain jobs. Occupations where you have to be smart to be productive. That's the flip side of the decline in jobs for dummies: more jobs for smarties.

The reason they're so easy to overlook is that so much of the new value added is invisible. A growing percent of every consumer dollar goes to people who analyze, manipulate, innovate and create. These people are responsible for research and development, design and engineering. Or for high-level sales, marketing and advertising. They're composers, writers and producers. They're lawyers, journalists, doctors and management consultants. I call this "symbolic analytic" work because most of it has to do with analyzing, manipulating and communicating through numbers, shapes, words, ideas.

Robert Reich, when you served as Bill Clinton's Labor Secretary didn't you get the memo? Low skilled Hispanic immigrants are needed for economic growth even though the demand for low skilled routine labor is dropping. Now, I do not understand logically how to reconcile the need for more supply when demand is falling. Using logical reasoning I'm not able to divine how the wisdom of our elites makes any sense. But that is what they tell us.

On the bright side, this future that Reich describes bodes well for his students at UC Berkeley. They've got the skills needed for the kinds of jobs the US economy is producing. But on the not-so-bright side, the average skill set of the US labor force is looking less and less like the graduates of UC Berkeley.

Share |      By Randall Parker at 2009 May 31 10:32 AM  Economics Labor

James Bowery said at May 31, 2009 11:56 AM:

The low cognitive job elimination problem can be handled with little sweat by a citizen's dividend given simple restrictions on reproduction.

What I find more interesting is the structure of the high cognitive demand jobs. Basically, the high value our society has placed on fraud (in a broadened definition to include self-deceptive selfishness) is leading to nonviolent yet highly destructive cognitive elite that is begging for a violent cognitive elite to emerge.

Michael L said at May 31, 2009 12:33 PM:

Last time I checked, in the West we have shortages of skilled tradesmen/workers, not of engineers let alone of the run off the mill paperpushers. Becoming a skilled tradesman doesn't take big IQ, but it does take a lot of time, patience and, most importantly, effective training infrastructure. Meanwhile, unfortunately, it seems that the only places where the society as a whole cares about systematically training workers is Germany, the historical motherland of institutionalized vocational ed, and Japan, Germany's faithful student and imitator. As for America, England and France, AFAIK not so much.

Randall Parker said at May 31, 2009 12:44 PM:

Michael L,

In my own experience working in engineering environments the biggest shortage I come across is in smart people. Skilled tradesmen: I've never worked in a place where it was hard to find a lathe operator or an electronic technician. People to come in and repair buildings are in plentiful supply.

Aki_Izayoi said at May 31, 2009 12:56 PM:

Why not imitate Sweden and Denmark and have more "labor market political activities"? In Sweden those are "supposedly" education and trainee positions 100% subsidized by the government. Of course, the Social Democrats there like that policy, but I think everyone knows that "labor market political activities" have no meaningful purpose then to reduce the headline unemployment number. The Social Democrats know this, but they lie during their speeches. It is just a way to combat unemployment and giving people something do to because the Social Democrats are smart enough to know that the free labor market isn't going to do that.

Randall Parker said at May 31, 2009 1:03 PM:


You know the answer to your own question. How is America demographically different from Sweden and Denmark? We can't sustain paying half the population to do "labor market political activities". I do not want to pay half my income in taxes just to give the dummies make-work jobs.

A. Prole said at June 1, 2009 3:37 AM:

Robert Reich (Bill Clinton's pet household 'wise dwarf'), is merely stating the obvious - point made much better by Bill Murray all those years ago - and a process that has, in fact, been going on for centuries and was prbably more acute 100 years ago when mass production really took off - think of the gearbox of a 'Model T'.
- Another reason why economists aren't particularly bright - anyone with half a brain could have pontificated forth.
Anyway, how the Hell does a lawyer (as Reich claimed), add value to anything? - Even in his 'wise' 'economic' pearls of wisdom he has to fuck up big time in small but obvious detail - the only thing a lawyer produces - apart from puttting the frighteners on the opposing party - is intestinal waste products.

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