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Technology, Competition, And The 'Crapification' Of Jobs

Tyler Durden's picture




 

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

The 'crapification' of jobs is the direct result of the 'crapification' of the economy.

Two recent articles shed light on the 'crapification' of jobs and the rise of income inequality:

Martin Wolf on the Low Labor Participation as the Result of the Crapification of Jobs (Naked Capitalism)

The Measured Worker: The technology that illuminates worker productivity and value also contributes to wage inequality. (Technology Review, via John S.P.)

While both articles offer valuable insights into the secular trend of stagnating employment and wages, I think both miss a couple of key dynamics. As a general starting point: if you want to understand the 'crapification' of jobs and wages, we have to look at the 'crapification' of the economy from the perspective of those who are doing the hiring: the employers.

From the perspective of employees, the 'crapification' of jobs boils down to 1) low/stagnant wages for 2) highly structured, boring, repetitive and often difficult work. The decline in the quality, pay and upward mobility of jobs is directly related to the dynamics of globalization, financialization, and the surplus of ordinary labor and capital:

1. Increased competition suppresses wages as employers seek to cut expenses. Rents, taxes, healthcare, government fees, etc. all rise like clockwork; that leaves labor as the largest component that can be trimmed.

2. Cheap capital incentivizes replacing labor with new software/technology. With the cost of capital at all-time lows, the pressure to replace costly labor with new software, robotics, etc. is intense. Software, robotics and related technologies are dropping in price even as their productivity increases.

The reality is that humans can only be pushed to produce more if the tools they're using become more productive.

The second reality is that for many enterprises, these global pressures boil down to automate or die, with the purpose of automating being to reduce labor costs and boost productivity, as both are required to survive competition and stagnating sales.

3. The total compensation costs of employees is rising even if wages are flat. Employees (and the vast majority of pundits, most of whom have never hired a single employee with their own money) tend to overlook the overhead costs paid by employers: workers compensation insurance (soaring), healthcare insurance (soaring), disability insurance, unemployment insurance, 401K or pension contributions, etc.

Total compensation costs = wages + labor overhead. If labor overhead costs are climbing, the employer is paying more per employee even though the employees aren't getting a dime more in wages.

4. As system costs rise, those with stagnant incomes have less to spend. We can't say no to higher taxes, higher healthcare costs, higher junk fees, higher fees imposed by monopolies, etc. and so the share of income that is truly disposable is declining as the big-ticket expenses continue rising.

This means stretched consumers are foregoing expenses that they once paid for without thinking: the $350 blood test for the ailing pet, the broken air conditioner in the car ($500+ to repair), the after-school enrichment class, the Friday dinner out, etc., etc., etc.

The net result of stagnating income for 90% of the households is stagnant sales. The cheerleaders on propaganda-TV never mention that the rising corporate profits they are trumpeting are typically accompanied by declining sales and declining same-store sales. In other words, the "profits" are accounting gimmicks, not true profits earned on rising sales.

5. It is increasingly difficult to generate a profit in this environment unless you own/operate a monopoly or quasi-monopoly. Those focusing on the 'crapification' of jobs tend to look at global corporations--those with thousands of low-paying jobs or those doing extremely well (Google, Facebook, Apple, etc.)-- while everyone from Mom and Pop small businesses to mid-sized corporations are generally being squeezed by slumping sales and higher total compensation costs.

If the management of public companies don't meet Wall Street's grandiose profit expectations, they'll be fired. If small businesses lose money, the owners are forced to either close the business or go bankrupt.

So everyone in the managerial food chain hoping to avoid the crapified employment market below their current job (i.e. those trying not to get fired) must crapify every job they manage to wring enough productivity and profit out of stagnant sales to keep their job.

The 'crapification' of jobs is the direct result of the 'crapification' of the economy.

 

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Fri, 11/06/2015 - 11:44 | 6758006 813kml
813kml's picture

It's never been a better time to be an organ donor, that's why God gave you two of everything.

Fri, 11/06/2015 - 11:53 | 6758048 Rainman
Rainman's picture

two brains .... one in head and one in pecker .

Fri, 11/06/2015 - 12:20 | 6758172 coinhead
coinhead's picture

Robots and AI gonna take all your jobs away.  Go robots!

Fri, 11/06/2015 - 13:00 | 6758338 SWRichmond
SWRichmond's picture

The crapification of jobs is an ongoing effort to change people's perception of what it means to be employed full time.  In a generation or two, grandpa will be the only one who knows what "middle class" once meant.

Fri, 11/06/2015 - 12:02 | 6758084 Anonymous User
Anonymous User's picture

I'll donate this organ:

http://www.thepornster.net/video/467/

Or better only just "lending" it.

 

Fri, 11/06/2015 - 11:45 | 6758011 El Vaquero
El Vaquero's picture

Can we just start with the next phase of the collapse already?  Preferably before WWIII starts?

Fri, 11/06/2015 - 12:05 | 6758099 Ghordius
Ghordius's picture

for me "The Great Proxy War" started a few years ago. I could even lean out of the window and declare it's start with 9/11. what you call collapse... August 15th, 1971

big things take time. for everything. meanwhile, note the millions of victims around Syria and Iraq alone

Fri, 11/06/2015 - 11:45 | 6758012 farflungstar
farflungstar's picture

Someday we'll all be serfs on public assistance except for the 1%

Fri, 11/06/2015 - 11:52 | 6758043 NotApplicable
NotApplicable's picture

All by design, thank ZIRP!

Fri, 11/06/2015 - 14:19 | 6758686 divingengineer
divingengineer's picture

except there wont be any "assistance" if the 1% have to pay out for it. 

 

"Relief", my Grandparents used to call it. 

Fri, 11/06/2015 - 14:51 | 6758926 Panafrican Funk...
Panafrican Funktron Robot's picture

The basic income idea is rapidly gaining steam.  Can be paid via debt, no direct taxes needed (just the hidden "inflation" tax).  

Fri, 11/06/2015 - 14:39 | 6758834 Inevitability
Inevitability's picture

Or, read William Gibson's "The Peripheral".

This book postulates that in the near future 'post jackpot' there will be only the 1%

Fri, 11/06/2015 - 11:46 | 6758016 MadVladtheconquerer
MadVladtheconquerer's picture

The author forgot to mention the crapification of the tripe that he spews.

Charles Spew-Smith

Hey!  It looks like the buyng panic is back!

Fri, 11/06/2015 - 11:51 | 6758036 neidermeyer
neidermeyer's picture

The crapification began back in the 1970's and accelerated mightily with H1-b abuses... The thinking jobs were destroyed.

Fri, 11/06/2015 - 11:56 | 6758050 NotApplicable
NotApplicable's picture

More like 1913. It's just taken a while to filter through the ENTIRE economy, as debt-money destroys everything it touches.

IOW, there's no way possible for honest business to compete with free money. The destruction of jobs are an effect, not a cause.

Fri, 11/06/2015 - 11:56 | 6758049 NoDebt
NoDebt's picture

I think he pretty much nailed it with that article.

I'll add that displacing physical labor with machines has never been the killer it is today.  It's not just the speed at which it's happening, it's that those displaced can't find anything better to do with their skills.  This is also a DIRECT result of government.  They have killed innovation (which is what allows those displaced workers to rejoin the economy in another area of the workforce) in two ways:

1.  Crony capitalism where new, competitive start-ups are quickly squashed by large corporations or government unions that can simply outlaw competitive alternatives (ask Uber about this).

2.  Taxes, fees, regulations that are so think you can't possibly get past them without major bucks behind you to get you off the ground.  And hiring actual people (legal American citizens, not illegals or H1Bs) has gotten so costly from a compliance standpoint it would be cheaper to buy a $1MM machine than hire 3 average-wage workers.  Just about the only thing that could turn this around now would be if Robots could unionize and demand minimum wage and maternity leave.

Fri, 11/06/2015 - 12:00 | 6758077 Ghordius
Ghordius's picture

new, competitive start-ups get also bought up, very often

to the point that some young people I recently met don't even contemplate to start up for something that might go on for hundred years: they focus instead on when they will get bought up

Fri, 11/06/2015 - 14:21 | 6758606 spooz
spooz's picture

WHAT?  "Innovation" CREATES the automation that reduces the cost of labor! Multinational corporations' efforts to compete on a global scale means replacing expensive human labor with lower cost machine labor. How is that the fault of the government and how would LESS government change things?

As for Uber, check out what Uber DRIVERS have to say over at Uberpeople.net.  The "sharing" economy works out just fine for Uber, not so well for the drivers. Here is what UberXTampa posted last Saturday:

"It is the same story as yours all the time:
Newbies start not knowing what to expect.
Uber feeds them best fares for at least 2 weeks.
Newbie thinks "the gig is so great for me that either old timers are too lazy to work or they must be too stupid to find the good fares."
Newbie thinks he is smart or at least a natural in a job that requires almost no special skill and no barrier to entry.
This is the honeymoon phase.

At the end of the one month, newbie gets some undeserved 1 stars and earning power is not as it used to be anymore.
He is one of us in a short 1 month barely making $10.0/hr after Uber cuts.
Deduct all other expenses such as gas, car washes, gum, auto detailing and you barely make minimum wage.

Welcome to the forum.

Full Disclosure: I am driving for both Uber and Lyft. I don't expect to make a lot of money but this job fits my current economic situation and my reality. I am grateful I could pay off a few credit cards. Working on remaining ones. Digging myself out 1 fare at a time. I treat my pax fairly, professionally and with respect. I have more than 3k trips and a 4.89 rating."

Fri, 11/06/2015 - 11:54 | 6758052 firstdivision
firstdivision's picture

OT but Holyshit: This is not getting enough attention http://gawker.com/report-louisiana-police-dramatically-walk-back-explana-1740921296

Fri, 11/06/2015 - 12:25 | 6758194 Kassandra
Kassandra's picture

You are right, it is NOT getting enough attention. You might think that was by design. The Guardian write up was pretty concise.

Fri, 11/06/2015 - 15:19 | 6759099 silverer
silverer's picture

They probably ran the story in Louisianna, because few people can read.

Fri, 11/06/2015 - 11:57 | 6758063 Ghordius
Ghordius's picture

a nice theory. but I still maintain that this "crapification" of both economy and jobs has a completely different source: megabiz

in short, the bigger a company, the more crap jobs it offers and the more crap it offers to customers, etc. this all doubled when it's gov

the main reason is that the bigger the company, the more it's sheltered from entrepreneurs/shareholders and customers alike. meaning who is sheltered is the management

and the bigger the company, the more easily it can lobby, and so participate to a corruptive crony capitalistic setup

but finance loves big companies, and politics loves to accomodate big biz. if we had only one company on this world, btw, we would have something like... global socialism

Fri, 11/06/2015 - 12:04 | 6758095 PeeramidIdeologies
PeeramidIdeologies's picture

And global wage parity.

SO. Who wants to go in on an organic insect farm. I see great(and tasty) things for this market in the future

Fri, 11/06/2015 - 12:11 | 6758126 Ghordius
Ghordius's picture

my niece bugged me until I tried her grilled locusts with honey. I made a show to be slow to try them, without mentioning that I ate them the first time in Africa, twenty years before she was born

they are ok, but so in the range of tofu. I probably prefer them to tofu, particularly when done to resemble meat, that's so... gay

Fri, 11/06/2015 - 13:12 | 6758384 Winston Churchill
Winston Churchill's picture

Probably thinks you've never had sex either.

Fri, 11/06/2015 - 13:45 | 6758524 PeeramidIdeologies
PeeramidIdeologies's picture

Lol I haven't tried that particular recipe yet, but it sounds pretty good.

Of course using them for direct consumption is only one of the rolls insects can be used to alleviate the pressures created within a terminal labour market.

Bugs, in their many forms, could be of the most efficiently created sources of bio-mass and are one of the best processors of human by products. They also make great organic supplements for other sources of protein.

I recommend the ants, they're a tangy delight!

Fri, 11/06/2015 - 15:17 | 6759086 silverer
silverer's picture

Bugs are OK.  It's what's on the menu in about 8-10 years.  Might as well get used to it.  Congrats on your head start.  Hey, come to think of it... maybe the next big thing. Draw up the contracts for some franchises.

Fri, 11/06/2015 - 13:49 | 6758542 l8apex
l8apex's picture

Ghordius, seems to me that it's a combination of both your theory as well as Nodebt's.  They're certainly not mutually exclusive.

Fri, 11/06/2015 - 13:57 | 6758582 spooz
spooz's picture

WRONG.

Socialism means public, cooperative or citizen ownership of the means of production.  What this article describes is large PRIVATE multinationals, who own the means of production, chipping away at labor's share.  Globalism and socialism are NOT the same thing.  

Fri, 11/06/2015 - 15:10 | 6759046 silverer
silverer's picture

Well, free enterprise doesn't really exist in developed western countries anymore.  It's at least almost socialism or simply is socialism.  Yes, you can say "private", but the separation line is so murky as to become a task to find.  Big corps and the government are entertwined.  The taxpayer now pays for both (think Solyndra - private with government guaranteed loans), and the operation of companies with government leaning over their shoulders, even overseas based companies.  Since this business model is happening almost everywhere, I think of globalization as "standardization" of the common operating principles we see in place today in the west, between government and what people would call "the private sector", which isn't really private anymore.  Now all substantial business is mostly drifting toward crony capitalism or even facism.  So by definition, I agree with you.  But what we see in reality is the chicken shit cobbled mess.

Fri, 11/06/2015 - 16:43 | 6759543 spooz
spooz's picture

EXCEPT crony capitalism ISN'T socialism.  Its closer to totalitarianism or, yes, fascism. The PEOPLE are getting NOTHING from the profits of multinationals.  Under socialism, the PEOPLE get rewards, not private shareholders. As long as its shareholders and executives that are getting the benefits of crony capitalism (despite the fact that corrrupt, paid-for legislators let it happen), it is NOT socialism.

Fri, 11/06/2015 - 12:01 | 6758066 I Write Code
I Write Code's picture

STEM workers with college and advanced degrees (and some without college) have seen declining real wages overall since 2008 ... since 1991, really.  And at least a couple percent a year, so say 15% since 2008.

Thanks to a number of reasons, but certainly H-1B above all.

And yes, the jobs have been crapified.  Offices gave way to cubicles now give way to open "collaborative" offices, and now they're even taking away the chairs, LOL!  And the work, too, failure is expected, everything needs to be done three times.  You get big frauds like Theranos.  Even Google is infamous for having thousands of smart people - who do nothing, just lost in the process, and Google doesn't care if they don't.

Fri, 11/06/2015 - 11:59 | 6758070 CHoward
CHoward's picture

I'm greatly comforted in knowing that someone finally invented the Crap-O-Meter.  This has been long in coming and will be very useful as we go forward.

Fri, 11/06/2015 - 12:00 | 6758076 MedicalQuack
MedicalQuack's picture

Be aware that Chinese Citizens Score model is here in the US, maybe a bit hidden but look at all the excess scoring that is taking place to deny access as well.  

http://ducknetweb.blogspot.com/2015/10/citizen-score-in-china-huge-warning-for.html

 

Fri, 11/06/2015 - 12:01 | 6758080 world_debt_slave
world_debt_slave's picture

yep, looking for part time to supplement my full time job, service jobs galore

Fri, 11/06/2015 - 14:59 | 6758978 silverer
silverer's picture

And you can change your name to "Jeeves".  Awesome.

Fri, 11/06/2015 - 12:06 | 6758102 Raymond_K._Hessel
Raymond_K._Hessel's picture

Wastin' away again...
in H1B-ville

I'm sure that the recent {relatively} recent financial-sector driven growth did not represent a misallocation in any sense, nor is the massive and growing gap between ceo compensation and median employee wages.

and for all this technology - sure seems like people are still scrambling to get here by the hundreds of thousands.

They can't all be going on welfare.

Fri, 11/06/2015 - 12:15 | 6758145 Ghordius
Ghordius's picture

the financial sector is something like the grease of the economy. it does nothing as such, but it helps things run smoothly

at least it did, when it was like 2% of the GDP, and did not throw a fit from time to time

10%? that's not grease, that's... crap. or just a huge sucking sound. but New York and London are literally built on that crap

Fri, 11/06/2015 - 13:16 | 6758402 Winston Churchill
Winston Churchill's picture

More like 40 % when you add in all the financial 'engineering' going on

in non financial companys..Its crap like a Xmas goose.

Fri, 11/06/2015 - 12:54 | 6758308 Ludwig Von
Ludwig Von's picture

Crapitalism --->crapification of labor --->crapification of evironment--->crapification of homo sapiens--->self extinction of saps.

Fri, 11/06/2015 - 13:32 | 6758476 csmith
csmith's picture

"Rents, taxes, healthcare, government fees, etc. all rise like clockwork;..."

 

And NOW we've figured out the problem. Break the monopolies that the bankers and bureaucrats (the nexus of which is the FED) have on our lives and let millions of flowers bloom. 

Fri, 11/06/2015 - 13:52 | 6758535 spooz
spooz's picture

What do bureaucrats have to do with globalization and monopolistic corporations squeezing labor to maintin profit margins? Did you bother to READ it? How do you think "less bureaucrats" would change things for the better in the face of monopolist global corporations that seek to have an army of underpaid global worker units fighting each other over the crumbs that remain when labor gets squeezed?  But why bother reading anything new when you can just spit out the same sound bites you've been reapeating for the last decade?

 

Fri, 11/06/2015 - 14:09 | 6758636 moratar
moratar's picture

Report was good enough to crush gold and silver.

 

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