Hank.Walker@unh.cs.cmu.edu (10/02/86)
A recent study using the input-output model of the economy showed only a slight rise in unemployment under the high productivity gain model, compared to the moderate gain model. One point that the article does not address is what do you do when productivity increases by a factor of 10 or 100. Shortening the work week does not seem possible in this case. There is also the fundamental fact that many people like their jobs, and are going to do a lot of work no matter what. Unless we live in a police state, there's no way the government can stop them, short of a 100+% income tax rate. Nils Nilsson discusses the problem of vast productivity growth in a 1985 issue of AI Magazine. Perhaps a more succint way of stating what is happening in the economy is that labor is moving from areas with high productivity (manufacturing and farming) to areas with low productivity (services). This movement has been impeded by some government actions, such as proping up farmers, while accelerated by others, such as unionization in factories. As the cost of labor rises, as it must as we get wealthier, the relative prices of things change, and thus choices, like self-serve versus full-serve. I don't understand the comment disparaging health services and education. These are both areas with low productivity. They are also areas where demand is growing, because the population is getting older, and jobs require more training. The fact that these areas of the economy are largely public in nature is not a requirement carved in stone. Humana/MedFirst health clinics are private. Therefore I don't see the need to separate these services out from other personal services. A secondary point is that longer schooling can be viewed as a method of shortening working times while increasing the number of service jobs to do the teaching. The author is incorrect, or at least incorrect with respect to the US economy, about growth in service jobs. The areas with the most job growth have been in food and janitorial services. These are areas starting out with a large existing job base. -------