Entitlement in Society (Part 2): Stunts Growth

In my last post we introduced the disturbing CNN article, "Are Jobs Obsolete?," and discussed how the premise that most Americans don't need to work would negatively impact individuals' happiness and self-esteem.  Now, in the second of a three-part blog series on entitlement in society, we'll discuss why making jobs obsolete would stunt our country's growth.

The article makes an erroneous argument about how increased technology, automation and efficiency kills jobs. During the Industrial Revolution, machines were supposed to eliminate all laborers and the tractor was supposed to eliminate farm workers.  Yet it didn’t happen and unemployment was below 5% almost 100 years after these innovations. Why weren't more jobs eliminated?

Here's why. Automation and efficiency may eliminate jobs in the short-term, but they increase jobs in the long-term.

Imagine a car company that automates some jobs with a new robot.  Some factory line workers are no longer needed and they lose their jobs.  The company has now produced their product for less.  They can make the same amount of money, selling it cheaper than their competitors that did not automate.  The quality of the car is better because there is no human error; the car company sells more cars; more dealerships spring up; more salespeople are hired; more finance and accounting positions are filled; more factories are built; non-automated jobs in the factory increase; more robots are ordered; and more people are needed to build the robots. While employment drops slightly in the beginning, it then grows dramatically with the success of the company.  The money the consumer saves on the car helps buy other items, employs people at those companies, or funds a home purchase. So while the “exact job” may be eliminated, the "overall" number of jobs increases.

Now, let’s look at the company that did not automate.  They had more people employed in the beginning, but soon their costs were too high and their quality was too low.  They started losing sales to competitors.  They have to close factories and dealerships.  More and more people lose their jobs.

This is not just a company vs. company idea either.  This is a global economy.  If a company in China is automating their process to undercut our price or improve the quality, we must also automate and protect our jobs. 

Ultimately, encouraging a non-working society reduces individual happiness, stunts our growth and global competitiveness, and lowers the quality of life for everyone - which will be the topic of the third blog in this three-part series. 

1 comment:

  1. There's proof that a company can both automate, become more efficient AND keep jobs and ongoing hiring sustainable / The Lean methodology at its core. For example, If you automate a product or solution end to end without human oversight and/or intervention, who is going to find your errors and mistakes first in your production line? The consumer /or your customer - wow, that sucks. To your point, yeah, you eliminate A job, BUT you in turn create many more opportunities with the extra cash flow to increase research and development and customer satisfaction. The employees left in the dust will be the ones who are not ambitious enough to keep on growing and expanding their career and industry knowledge -- a win-win in my book. Why waste your organizational workforce on simple repetitive tasks, instead you automate, take the brainpower you have and use that for continuous/on-going improvement.