How many employees does it take to screw in a light bulb? The answer, it seems, is as many as possible.
In the past, when pitching a commercial venture opportunity to potential investors, one would have touted low risk and high return on invested capital, but these days economic viability won’t cut it in the eyes of the public. This isn’t because of environmental risks or even a disdain for big business. The reason why so many projects are derailed by public opinion is simply because they don’t create enough jobs.
Job creation is now a standard criteria for judging the viability of an investment. For example, if a city is considering constructing a new bridge, prison or stadium, it must first convince the public that the project will employ an substantial number of local workers. Thus, it is understood to be a positive when a project requires a large amount of labor, and a negative when a project requires little labor. This line of thinking seems to make sense, since citizens need jobs in order to perpetuate the consumer-driven economy. But if we think about job creation in relation to efficiency, it becomes clear that the two are actually adversaries.
When we refer to efficiency in this case, we mean the amount of labor required to produce or sustain a specific project or business. For example, a toll bridge may require 5 full-time employees for toll-collection and 5 for maintenance, but after switching to an automated tolling system, now only requires a total of 5 employees in order to function, thus doubling the efficiency of the project. Most would agree that the automated tolling system is a wise investment, but what about the 5 employees who lost their jobs? Doesn’t the economy suffer when people are unemployed?
The short answer is no, the economy does not suffer when efficiency is increased. The long answer is still no, but it’s more complicated.
Ever since the industrial revolution, humans have endured massive layoffs and labor migrations at the hands of mechanization. Movies like The Matrix and Wall-E depict a grim future where machines have either seized, or been entrusted with, control, resulting in a pacified, purposeless human existence.
Another perceived threat is the replacement of skilled workers with a cheap, and often illegal, immigrant labor force. The use of language like, “they took our jobs,” reveals the sense of ownership that we feel about our employment. This is interesting, considering how slaves were seen as a great asset to societies in the past. It’s likely that those from the past would find it comical that a nation considers it a problem when another race is voluntarily doing all of its hard labor.
Eventual replacement, either by a machines, immigrants or the next generation, has always been a threat to the employed. However, the solution is not to restrict automation or immigration or to prevent the restructuring of an inefficient model. No one has a right to a job, for employment is not guaranteed by any charter, but neither should it be gifted to us by charity. Employment is merely the satisfaction of a demand for labor.
In some cases, the government will mandate employment, regardless of the return on their investment, in an effort to stave off unemployment, which can further damage fragile economies. These make-work projects seem like reasonable solutions, since governments worldwide took this approach to solve the economic crisis of the late 2000s. However, we cannot escape the reality that employing for the sake of employment is not a sustainable practice. Now let’s look more closely at how efficiency is a threat to employment.
With many businesses now filing and transferring documents electronically, paper consumption has declined. Because of this, paper mills may be forced to lay off employees. Does this mean that we should keep using paper, simply to keep these folks working? Few would agree.
We can comfort ourselves by knowing that the loss of employment in the paper production industry may be compensated by increased employment in the online storage industry, but this is not guaranteed. Taken to the extreme, imagine that an invention is discovered which will revolutionize human industry, such as instantaneous teleportation. This invention would dramatically increase productivity by reducing transportation costs to zero, but it would also cause the collapse of major corporations, resulting in significant job loss. Do we accept this invention in the hopes that the efficiency will outweigh the economic damage of the unemployment, or protect the stability of the economy by ensuring that the device is never produced?
The answer, of course, is that we should accept the new invention, the same way that we should accept automation and immigration. Although it’s true that technology does replace high numbers of unskilled labor positions with fewer skilled positions, this has not yet resulted in the demise of employment. In fact, employment has remained generally constant over the past 50 years in the United States, averaging about 93% and rarely dipping below 90%. It’s true that increased efficiency costs people jobs, but it also allows us access to products and services that would otherwise be impossible to afford. If computers, cars, books and clothing were all produced locally and by hand, many of us would not be e-mailing, driving, reading or warm.
Will there always be enough jobs? It’s impossible to know. But preventing industrial and technological development for fear of unemployment seems like a primitive and futile response. Perhaps one day all of the world’s labor will be performed by one lucky person, while the rest of us suffer.