Those who subscribe to a “lump of labour” view believe that there is only so much work to be done, and when, for example, machines substitute for what was previously done by humans there is nothing more, or something less, for workers of any age, sex or race to do. I and many others don’t believe this is the case, but there are serious questions about what displaced workers will do and, for example, whether they can be retrained for other jobs.
In thinking about this question, consider the following, in no particular order:
- In countries like Germany and Japan, the population is ageing and the concern is for a future workforce shortage. This explains Germany’s welcome for refugees and displaced persons from the Middle East and Africa. Japan so far is reluctant to dilute its native population with foreigners, and will reap the consequences if it fails to do so. As people are living longer, the present retirement age can be extended providing partial relief, but there is a limit.
- Unemployment due to the need to adapt to changing technology – the Schumpeterian case of creative destruction – that is the introduction of different ways to produce familiar as well as new goods and services, gives rise to the need for retraining. This is easier for some, say younger folk, than others, but is an option that almost always occurs in similar circumstances. How fast workers can adapt is an issue. For example, a change from manual work to engaging with digitized production processes may require more of a generational change than a simple retraining course. If the change is too slow or virtually impossible then other measures, preferably of a temporary nature, can be tried.
- Young people have the flexibility to aim for employment in areas where demand is growing in both low and high skilled occupations, and to take courses accordingly. It is pretty obvious that in higher income countries there is strong demand for service sector employees in food and other types of retail operations. The job vacancy signs are posted in store windows as well as in help wanted electronic and other billboards. No, they don’t pay well, frequently offering minimum wage but they exist. Some taking these jobs may decide to experiment themselves by starting their own businesses.
- There is an active market for caregivers for old people (like myself) and for children in rich and poor countries as well as for healthcare workers. Where available nationals won’t apply for these jobs, temporary or permanent foreign workers are often hired. The work is there. The locals don’t want to do the jobs. In general, employment is increasing in the service sector in middle and upper income countries. There is no shortage of work, often a shortage of the type of work people may be willing to do.
- The educational and training paths may be out of whack with available job opportunities. A higher percentage of the population in upper income countries now go to university than previously, but the available jobs may not need degree training. Often a rewarding career in the trades benefits from attending community colleges where skills required from emerging technologies can be acquired. Past emphasis on the three Rs may now need the addition of skills like computer programming and apprenticeship-type programs. (I learned the basics of Fortran programming in the 1960s, and whereas I never followed this up and could not earn a living at it, I know what is involved. It may now be a necessary and rewarding skill in many industries subject to the use of computers.)
- There is considerable research available that addresses the question of where future job opportunities lie. I will refer to these in a future posting.
None of the foregoing suggestions involve rocket science. They do suggest ways of looking at the future labour market and its required skills. They do indicate a willingness to be adaptable and engage in life-long learning, something that recent technology facilitates. In my view, there is no fear of a finite lump of labour syndrome.