Polity by Rob Salmond

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Polity: Hosking’s right about jobs

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  • BenWilson, in reply to Swan,

    We have had low inflation for I think about 6 years, and similarly high unemployment. Therefore, monetary policy has been too tight.

    It's a bit hard to make therefore-type conclusions about this stuff. It's possible that we could have high inflation and high unemployment too, which would be even more of a lose for RB, since inflation is their primary responsibility. Or at least they do what they can, whilst ignoring probably the biggest driver of real inflation - the price of property. It's not even counted even though it's the hugest part of our economy. With only the small number of levers they have, it's a lot to expect that they could really control either inflation or unemployment. It's like expecting them to swim using only one arm. They might be able to struggle along for a while but they'll never make decisive headway, and they're helpless against even minor waves and currents. Most of the economy is outside of their control. A pretty significant part of the economy is outside the control of all the governmental powers put together - what the international economic situation is.

    They might be the most qualified people to gaze at crystal balls and twiddle settings, but it's still crystal ball gazing and twiddling fairly weak and incomplete controls.

    Auckland • Since Nov 2006 • 10650 posts Report Reply

  • Kumara Republic, in reply to Jim Cathcart,

    What you are saying is quite right, but that's not how people actually think during bubbles. It also works in the other direction, when asset prices crash. And this is a scenario that the govt is terrified of.

    In gambling circles, it's called 'double or quits'.

    The overall point is that the FIRE sector has crowded out the productive sector in recent years. From historical precedent, it's sadly often taken an upending event like a pandemic, a World War, or a Great Depression for meaningful change to proceed.

    The southernmost capital … • Since Nov 2006 • 5429 posts Report Reply

  • Kumara Republic, in reply to BenWilson,

    Of course. For most major combinations of demography and opinion there are some examples of people like that. But I was hoping to get an idea of any particularly significant groupings.

    In my case, I'm tempted to vote Labour again, largely on the strength of the proposed Digital Apprenticeship Scheme. Because it attacks the problem three-fold: firstly, it's a genuine measure to extend the ladder of opportunity, as opposed to more of the same motivational psychobabble and ladder-pulling victim-blaming; secondly, it recognises a major skills shortage, in this case the ICT sector; thirdly, it partly addresses the issue of automation and technological unemployment.

    The southernmost capital … • Since Nov 2006 • 5429 posts Report Reply

  • Jim Cathcart, in reply to Dismal Soyanz,

    Well the only way you're going to be able to prove your point is if Auckland has a property crash. From your comments, your interpretation of the wealth effect is different to mine and that espoused by Robert Schiller.

    Since Nov 2006 • 228 posts Report Reply

  • Kumara Republic, in reply to Jim Cathcart,

    Well the only way you're going to be able to prove your point is if Auckland has a property crash. From your comments, your interpretation of the wealth effect is different to mine and that espoused by Robert Schiller.

    Another thing to consider is that certain political leaders in Auckland who you'd expect to be pro-market and want the RMA abolished, suddenly become statist if something out of Manhattan or Dubai was proposed nearby. In other words, rentier-ism.

    The southernmost capital … • Since Nov 2006 • 5429 posts Report Reply

  • Rich of Observationz, in reply to Kumara Republic,

    I don’t believe there is a major skills shortage in the IT sector.

    I think there’s an unwillingness of some employers (going up the value chain to corporate purchasers of IT) to (a) pay the rate for the job and (b) develop staff skills rather than expecting to hire people with a 99% fit to their tech of the day.

    it partly addresses the issue of automation and technological unemployment

    Well, only if IT processes don't themselves get automated away, which they've been somewhat resistant to over the last 50 years (demand for increased functionality and complexity eating up productivity improvements), but that process might end. (If it doesn't end in the bootstrapping of an AI that can perform any programming task - which in turn depends to some degree on Gödel's incompleteness theorem).

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • Jim Cathcart, in reply to Kumara Republic,

    Well noted. Despite any ideological bluster, there seems to be a strong element of entitlement among the rentier class, which seems to be particularly strong in Auckland. The same rentier class (all-powerful in NZ and Australia) tend to ignore that the global monetary system, which sees our banks secure wholesale funding for mortgage lending and retail bank "money creation", is the framework for this burgeoning social structure.

    Since Nov 2006 • 228 posts Report Reply

  • Kumara Republic, in reply to Rich of Observationz,

    I don’t believe there is a major skills shortage in the IT sector.

    I think there’s an unwillingness of some employers (going up the value chain to corporate purchasers of IT) to (a) pay the rate for the job and (b) develop staff skills rather than expecting to hire people with a 99% fit to their tech of the day.

    It's part of the wider issue that no one can agree on how to fix the skills mismatch/'shortage'. A relatively deregulated labour market like New Zealand's favours those with capital or the very highest skills - and it provides little or no incentive to train people on the job, which a lot of people, myself included, are far more suited to than a traditional classroom environ.

    The southernmost capital … • Since Nov 2006 • 5429 posts Report Reply

  • BenWilson, in reply to Rich of Observationz,

    I don’t believe there is a major skills shortage in the IT sector.

    I find it quite hard to square with being unable to find a job despite huge experience and skills in the sector, and not even having high salary expectations. To me it's just one of those things people complain about - on both sides. People hiring always complain that they can't find people and on the other side that they can't get a job. What they always leave out is the caveat of price. The employer can't find the person with the exact right skills at the price they're prepared to pay, or someone close whom they will have to train for a bit. It's as much a statement about their stingyness as it is about the availability of the people with appropriate skills. On the flipside for me it's as much a statement about what kind of work I'm prepared to do, under what conditions, and at what remuneration, as it is about whether there is any work I can do around.

    <digression>

    If it doesn’t end in the bootstrapping of an AI that can perform any programming task – which in turn depends to some degree on Gödel’s incompleteness theorem

    </q>

    :-) Heh. Well no AI is going to solve the Halting Problem, But the question it all most depends on is whether every mental task currently performed by humans is ultimately computable. After that, the Church-Turing thesis pretty much guarantees us that a computer could do it.

    </digression>

    Automation of every kind already does massively reduce the "genuine" need for human labour. It's been doing that for centuries. We manufacture the demand for human labour at the same time, though. Because, as described in the first sentence of this post, demand is not a fixed thing anyway, just a statement about how much we're prepared to pay for what. We can keep ourselves this way forever. We could even make things worse quite easily. Until we can conceive our way out of this dilemma, we're pretty much stuck here in the Vale of Tears, vacillating over how much punishment we deserve (and the others around us).

    Auckland • Since Nov 2006 • 10650 posts Report Reply

  • Swan, in reply to BenWilson,

    Ben, if we had a supply shock we might have unemployment and high inflation, but that obviously isn't the current situation, it is fairly well recognised we have a lack of demand. It is arguable that things get difficult when we get near the ZLB but that isn't the case for NZ They have full control of our fiat money supply. They've gotten it wrong and that is a major reason for NZs high unemployment.

    It might be reasonable to say ex ante it was difficult to be definitive about the appropriateness of monetary policy, but the result over the last few years are a matter of fact.

    Birkenhead • Since Feb 2011 • 86 posts Report Reply

  • Tom Semmens,

    I think there’s an unwillingness of some employers (going up the value chain to corporate purchasers of IT) to (a) pay the rate for the job and (b) develop staff skills rather than expecting to hire people with a 99% fit to their tech of the day.

    Employers ruthlessly use the “skill shortage” to force wages and conditions down by the wholesale importing of low cost IT labour from (current flavours de jour) India and the Phillipines. These workers come with stellar CVs chock full of impressive qualifications, but in my experience they are 50-50 propositions on actual ability and/or workplace nous, and anyway usually require at least as long as retraining/skill development would in order to come up to speed with NZ workplaces and culture.

    Sevilla, Espana • Since Nov 2006 • 2214 posts Report Reply

  • BenWilson, in reply to Swan,

    I'm not sure what you're talking about there Swan. Not being combative, but I just lost the thread. A supply shock in what? Jobs? Money? Property? Oil? Milk? I just don't know what you're talking about, so can't really intelligently respond.

    It seems overly confident to state that the full conditions that could lead to high inflation and unemployment simultaneously. I don't even really accept the general framework of the discussion of these figures, for reasons given above - inflation seems high to me because I live in Auckland and my own personal "basket of goods" includes property ownership, which has gone so high it dominates my entire financial life. But sure, the price of milk is pretty stable, and computers are always coming down.

    As for unemployment, it's always quite fraught because there are so many ways to just exclude people who don't have a job or money from unemployment statistics, and then just ignore their plight when talking about the grand economic indicators.

    I don't show up on any unemployment statistics, because the support I can get for it is basically nothing - I can't get a benefit, therefore I'm not even an official statistic. No one officially knows if I have a job. I don't even know - I just know I don't get paid for the work I do. Doesn't mean it's not substantial - I was recently doing 60 hour weeks to get coursework and exams behind me. That's on top of childcare (one of the children being disabled) and housekeeping. Now, I'm working full time on my small business. Which is a "job", but it's still not paid until I get a sale. I'm not "precariously employed" - no one can fire me from the company in which I'm the sole shareholder and only employee. I'm not idle. Nor am I unusual in any of this among my peers. This isn't some whack unusual situation which can safely be considered noise.

    Essentially, it seems to me that the very way people work is changing. If that is the case, then time series about unemployment figures and inflation rates aren't going to be any more enlightening than time series about any other phenomenon that is undergoing a fundamental change. It's entirely possible that inflation and unemployment could decouple - there's no strong obvious casual connection, just a long period of weak correlation. It's also entirely possible that this could be a good thing. A world in which less work is done is not an axiomatically bad world to me. For me, it's almost the entire point of work - so that you can stop doing it at some point, and move on to activities aren't work, which you like to do. You work now so you can work less later. We've been working really, really hard for a really long time now. We could...just...stop doing it so much. We could take all of the insane amounts of energy and development that have gone into keeping us busy and just direct it into making ourselves happier. That's the only kind of economic plan that makes any sense to me, and this world of neverending work maintained by keeping a poverty line there and devaluing money via inflation to kill off what investment actually means for the bulk of humans - that shit is whack. That's the Vale of Tears I was talking about, the cycle of endless Dhukka that we have literally put ourselves in through a lack of imagination and self awareness. I'm not even a Buddhist, but I get that this Christian suffering shit that we suck down wholesale from both sides of our political spectrum is just bilgewater.

    Auckland • Since Nov 2006 • 10650 posts Report Reply

  • BenWilson, in reply to Tom Semmens,

    And wouldn't you, if you were an employer in a competitive industry where everyone else is doing that? In IT, your main cost will be wages. It's what I'll probably do when it comes time to try to upscale my business - no sane stats graduate kiwi kid is going to work for what I'd be able to afford to pay, but some technically competent kid without the best English, who really wants a start probably will. Then I'll be one of these evil exploitative employers, running a barely viable shop and hardly paying myself at all. I probably shouldn't be in business, but unfortunately the alternative for me is unemployment and poverty. Because that's how our system works. With all the best intentions in the world for it to be different, that is my reality.

    Auckland • Since Nov 2006 • 10650 posts Report Reply

  • linger,

    Essentially, it seems to me that the very way people work is changing.

    Cue two BBC Radio 4 series on that topic, both currently available to stream through BBC iPlayer, though not to download:
    The New Workplace (from August 2015; podcast access has expired)
    and The Joy of 9 to 5 (November-December 2015; no podcast available).

    Tokyo • Since Apr 2007 • 1928 posts Report Reply

  • Jim Cathcart,

    If anyone is interested, Rodney Dickens has an analysis of house prices and consumer spending in NZ here. Good read and he's suggesting that even if house prices were to fall, rising employment and increasing migration will keep consumer spending high.

    http://www.interest.co.nz/opinion/78949/rodney-dickens-says-forget-dairy-and-housing-consumer-spending-central-driver-economic#comment-835804

    Since Nov 2006 • 228 posts Report Reply

  • Kumara Republic, in reply to BenWilson,

    The employer can’t find the person with the exact right skills at the price they’re prepared to pay, or someone close whom they will have to train for a bit. It’s as much a statement about their stingyness as it is about the availability of the people with appropriate skills. On the flipside for me it’s as much a statement about what kind of work I’m prepared to do, under what conditions, and at what remuneration, as it is about whether there is any work I can do around.

    It’s a likely symptom of education and training, among other public goods, being reduced to a perishable good. Student debt is undoubtedly a driving factor in salary expectations for graduates, and for those who drop out or otherwise hail from blue-collar backgrounds, it’s even more of a liability. Again, Labour’s proposals – part of the Future of Work study – for an IT apprenticeship system are a partial solution.

    The logical extreme of automation would be a techno-feudalist system where robots churn out flawlessly produced goods and the Internet of Things flawlessly carrying out services… and not enough consumers with the money to purchase them. Still, I'm of the view that automation in itself isn't a job-killer, but rather the real issue is cartellised automation where the robots and the IoT are dominated by the Marc Andreessens in our midst.

    The southernmost capital … • Since Nov 2006 • 5429 posts Report Reply

  • Kumara Republic,

    For further reading by the same author on the topic:

    How to Keep a Piece of the Pie After the Robots Take Our Jobs

    I’m slightly sceptical of MOOCs as a solution, because they need an incredible amount of self-discipline to complete, and completion rates are typically far less than tradtional tertiary education courses. I suspect it’s especially true for those with disabilities and conditions like ADHD, and for such people, myself included, there’s not much other substitute for a practical and direct mentoring approach like that of an apprenticeship.

    The southernmost capital … • Since Nov 2006 • 5429 posts Report Reply

  • andin,

    Robots could drastically improve our quality of life. The jobs they’re good at—the only ones they’re capable of right now—are the boring, repetitive, strenuous positions. By taking monotonous tasks off our fleshy hands, they could free us from drudgery so we can do what humans have a unique aptitude for: complete creative tasks, care for each other, and communicate

    Uh Huh...We are all so creative. And we're all just longing to care for each other, and all the creatures on this planet, oh and this rock we're all spinning around on. And communication isnt just about you talking, there is that other thing called listening.
    WTF is wrong with boredom and monotony?

    raglan • Since Mar 2007 • 1890 posts Report Reply

  • tussock,

    Why does anyone think automation takes away jobs?

    Like, before the industrial revolution, everyone worked on farms, and then we freed those people up and instead of mass unemployment we got massive wealth and prosperity growth.

    Freeing up miners and loom workers and scribes and coopers and wainwrights didn't mean we had less jobs, it actually meant we got more real jobs that paid real money. As we've gone on and freed up typesetters and farriers and the people who used to replace all the bits in cars that used to break before we figured that shit out, there's not less jobs, there's more jobs.

    I know it seems weird, but back when nothing was automated almost no one had a paying job, and now almost everything is automated we have a greater workforce participation rate than any other time in history.

    Automating a bit more stuff isn't going to make that go backwards. You don't even need to figure out what they're all going to do, you just cut interest rates a bit and unemployment falls, like it always does. Thus Labour runs 2% unemployment to encourage wage growth and National runs 6% unemployment to encourage capital growth only now we all have iPhones and the people that used to print your photos for you do something else that creates even more jobs.

    Since Nov 2006 • 610 posts Report Reply

  • Tom Semmens,

    I’m slightly sceptical of MOOCs as a solution…

    We’ve already discovered that to much education simply leads to a qualifications arms race that the middle class is better equipped and funded to capture in their interests than the lower middle class, the working class, the working poor or the just plain poor. I also question whether or not people dropping out of higher education is a failure of the education system, or simply a reflection of human nature. A huge number of people – probably the majority of the population – are not particularly academically gifted, hated school, and are not that interested in the drudgery of continuing education. They just want a decent vocational job with a bit of on the job skill up-dating and training and some job security. A huge number of people would happily be an employed tradie or a teacher or a nurse all their lives. The governments jobs policy shouldn’t be focused creating opportunities for the already gifted to transition between careers. The smart and the gifted can take care of themselves. It should rather be about ensuring there is meaningful and reasonably paid work for everyone. As far as I can see, this probably means higher taxes, a UBI and a bigger government sector employing more doctors, teachers, nurses, social workers, community organisers and the like.

    Sevilla, Espana • Since Nov 2006 • 2214 posts Report Reply

  • Joe Wylie, in reply to Tom Semmens,

    A huge number of people – probably the majority of the population – are not particularly academically gifted, hated school, and are not that interested in the drudgery of continuing education. They just want a decent vocational job with a bit of on the job skill up-dating and training and some job security.

    Oh for fuck's sake - you're paraphrasing exactly the kind of hidebound 1930s tory editorials, asserting that lesser mortals were essentially ineducable. that Clarence Beeby once so rightly skewered as "nonsense on stilts".

    "Every person, whatever his level of academic ability, whether he be rich or poor, whether he live in town or country, has a right, as a citizen, to a free education of the kind for which he is best fitted, and to the fullest extent of his powers". That's Peter Fraser, back in 1939. That's what the Labour Party once stood for, before it was white-anted by bean-counting moral pygmies who imagine their privileges were somehow divinely ordained, rather than being hard fought for by their working class forebears.

    flat earth • Since Jan 2007 • 4593 posts Report Reply

  • Ian Dalziel, in reply to Joe Wylie,

    That’s what the Labour Party once stood for, before it was white-anted by bean-counting moral pygmies who imagine their privileges were somehow divinely ordained, rather than being hard fought for by their working class forebears.

    Well put, sir.

    Christchurch • Since Dec 2006 • 7943 posts Report Reply

  • Tom Semmens,

    “…“Every person, whatever his level of academic ability, whether he be rich or poor, whether he live in town or country, has a right, as a citizen, to a free education of the kind for which HE IS BEST FITTED”

    You need to calm down sometimes bro, your hater gonna hate routine affects your comprehension.

    My emphasis added above. No one is saying no to free education, just an end to the idea the only education that counts is a costly tertiary one that goes on forever.

    Sevilla, Espana • Since Nov 2006 • 2214 posts Report Reply

  • Sofie Bribiesca, in reply to Ian Dalziel,

    That’s what the Labour Party once stood for, before it was white-anted by bean-counting moral pygmies

    Ahem, Pygmies? What's well put there? Let's not be insulting (?) Pygmies eh, although my current bean counter is really cool.
    As an aside I'd wager that National has many more bean counters than Labour but they aren't getting the thrashing I suppose, so ne'er mind.

    here and there. • Since Nov 2007 • 6796 posts Report Reply

  • linger, in reply to Sofie Bribiesca,

    “moral pygmies” = “people short of morals”.
    No shortage of those in National, for sure.
    “Immoral bastards” might be more politically correct in one sense,
    but ... possibly ... less generally correct in another.

    Tokyo • Since Apr 2007 • 1928 posts Report Reply

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