Optimization vs. Job Creation

It’s interesting to listen to the President stress over the need to create jobs for the unemployed. Listening to his theories, you would think that job creation would be easy. Just destroy all machines and make humans do the work.

Of course, that’s stupid. And no, he hasn’t said that verbatim, but he has made interesting comments on the tragedies of business optimizations causing companies to cut back their workforce. Companies are finding ways to do what they need without having to pay the wages of human workers. Yeah, tragedy, right?

Consider if all production jobs were done by machines. Farm equipment was so advanced that it is all done automatically. Cars, computers, everything created by machine. What would we do? How would the wealth created by those machines be spread to the rest of the nation?

It’s funny that we seem to discourage such progress, as it destroys jobs. It’s true that it destroys a job. But the products (wealth) are still created.

What this does is it frees up human resources to use for other services. The fact that America has become so efficient is the very reason why we are able to have such an enormous service industry. We spend only 5% of our income on food. Shelter is typically our biggest expense. But all that’s left over is for non-vital services.

We have massage therapists, hair stylists, restaurants, movie stars, military, professional athletes, auto detailing, artists, policemen, and so many other jobs. All of these are non-essential to survival. They are comfort services. They are life improvement services.

This is exactly how we spread wealth. The producers create the wealth, then we spread it by paying for lilfe improving services.

So if a producer becomes more efficient, thus eliminating a job in their process, they have done the nation a great service. They eliminate the need for manpower in the production industry, thus moving the manpower into the service industry. The wealth is the same, but we create more services, we increase the life-improvement industry.

If companies are becoming more efficient, and people are losing their jobs, this is a great thing, so long as we know what is going on and how to deal with it. Unless there is a drought or some kind of disaster, there should not be a shortage of food. As long as we continue to mine and obtain resources, there should be no shortage of shelter or production. So long as we do not shoot ourselves in the foot with idiotic regulation on energy production, there should never be a shortage of energy with the technology we now have.

We are a rich nation. We have a steady supply of affordable life sustaining products. We haven't had a drought in many decades because we have developed technology to free ourselves from weather dependance. All man-hours not necessary to the production of these life sustaining products is used for life improvement. If jobs are being lost due to optimization, that manpower must simply be moved to improve life in other ways. Those without jobs must simply find other ways to improve the life of others.