Mommy, where do jobs come from?

"Oh my dear, that is simple. Jobs are created by presidents of the US with a little assistance of the congress. When presidents and congress people love each other very much, they spend a lot of money that doesn't actually exist, and that is where jobs come from."

That is right up there with the stork story.

Actually the real story is very simple. Jobs came from human ingenuity with respect to how to do stuff that wasted energy at the same time that energy availability was growing (as too, the population). We have figured out all kinds of trinkets to make and how to give each other haircuts, and entertain ourselves silly. And it didn't matter because we were always getting more net energy to burn off.

That is we were.

The question now is where did jobs go? OK, some US jobs did get shipped overseas, but that excuse is wearing thin as the Chinese economy is cooling. Again the really simple answer (if you know any physics at all) is that with less energy to throw away on trivialities and novelties jobs simply disappear. Every time energy costs have peaked we see an impact on spending on those trivialities. No consumption, fewer jobs. People lose jobs, they spend even less. What really got us this last time around were the siamese twin problems of the housing bubble and the debt bubble. They had grown so out of proportion with any real economy that the sudden loss of a few jobs, especially among those who were in over their heads (e.g. sub-prime mortgages) led to a cascade of unemployment. What our economist "experts" have been calling a "recession".

Back when the flow of net energy started to diminish we had shipped many jobs to China and India to take advantage of the cheap labor over there. Why was the labor cheap? Because the populations there were living on far less energy per capita. Both of those countries are seeking to change that now, promising their peoples that they will be able to consume just like the westerners have been doing. I imagine it is going to get pretty ugly when they fail to deliver on the promises. The global net energy flow will affect them every bit as much as it has hit the OECD countries. As I said, it is just plain physics.

So what do you think Obama can say, or do, next Thursday that will turn things around? Is he a magician? Is he going to pull cheap energy out of a bodily orifice that will let us go back to mindless consumption of stuff and "services" that then means someone has a job providing that stuff? I can't wait to see this. I was disappointed to have to wait one whole more day to hear his "plan". On the other hand the clown act of the three ringed circus known as American politics should be entertaining.

Maybe Obama should just join Rick Perry in prayer for jobs.

Comments

[Georgi Marinov]

I have never understood why people talk about jobs all the time, and I find it even harder to understand how people can seriously say things like "We shouldn't do anything about climate change because it will destroy jobs". As if jobs are more important than the future of humanity.

People do not need jobs, people need food, shelter, and the rest of the things in the hierarchy of needs that you have been writing about lately. None of those do or should require jobs to obtain, in fact jobs are about the most inefficient way (because so much energy and resources are spent in the process) to deliver them to people, and they only deliver it to the people who have jobs, the rest are often left out. Why would anyone ever think this is a good system? It is so wasteful and not even doing what it's supposed to accomplish...

Yes, someone has to produce the food we eat, maintain the infrastructure we depend on, etc. But all of this can be done with a fraction of the labor force available today, in fact it is done by a fraction of it today, which is why there is a problem with creating jobs for people. And this would be even more true for a much smaller population and yet more true if we haven't recklessly wasted so much of the fossil fuel endowment of the planet. Of course, it requires people motivated to work for the common good, and getting people to think this way is hard but not impossible. There are societies, rare cases indeed, but they do exist, that have managed to establish a similar attitude as the social norm so it is a matter of conscious effort to make the change happen, not an impossibility

But people need to see the madness of the current system for this to happen, which is the impossible part.

[John D]

The population of this country has grown by over 30 million people in the past ten years, but we have the same number of people employed. How can any sane individual think that some government jobs program is going to make a difference? I think Obama has lied himself into such a deep hole that all he can figure on doing is to come up with more creative and tangled lies. Then find a way to blame Congress. I believe Obama and most politicians think the only way out is to kick the can until collapse occurs.

[Bruce]

John D, believe it or not, there has not been a net new full-time private sector payroll job created since the mid- to late '90s, and not for males since the early to mid-'90s.

Less "health care" and "education" payroll jobs, males have not experienced net new private sector payroll employment growth since the mid- to late '80s.

The US economy is incapable of creating net new private full-time employment.

[Tony]

Job is the way to distribute production among people and to motivate people to increase production. When production is limited by carrying capacity, distribution and population should be adjusted together to achieve smooth transition. We can grow again when our quality are improved to a level that allow us to settle in other planet and so augment the total carrying capacity available to human. It is like an old company which successfully sustains for a long time by climbing up a limit by limit through continuous self-renewal for meeting new challenge.

"Share vision, get committed, improve ourselves."

[Bruce]

Tony, the human ape species has as much chance of colonizing and populating another planet en masse as Pat Paulsen has of becoming the next US president, and he's deceased.

[Molly]

"Is he (Obama) going to pull cheap energy out of a bodily orifice....?" I don't think ANYONE can fart THAT much! Tho hope springs eternal......

[Tom]

Right.

However, i think he could put a WPA-type project together where he directs the unemployed to sign up to help clean up after all the natural disasters we're having, but then the private contractors would howl that he's taking their jobs away.

He could start investing in green energy and those kinds of tech jobs, but again the private sector is already there and besides he has no money to invest (except in the war economy, then its carte blanche).

No it looks like we're on our way down and out as a country and planet.

[George Mobus]

George M,

I try to imagine an Asian-like culture or yore, where there was a good deal more group cohesion, coupled with a population of higher sapient beings. We humans have it in us to a certain extent, as evidenced by the cultures of which you speak. But most modern cultures are now so stressed with the learned desire to chase material goods just for their own sake that I doubt that what little inherited amount of sapience is there will ever shine forth. Better to let evolution work its magic!

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John D.

Don't know if you caught this post a while back: Could we solve two problems at once?. I have been working on some ideas for how this modern CCC could be funded and how a new kind of capitalism (i.e. aggregating resources for a profitable venture) might result is greater food security for those willing to invest. It would provide jobs (admittedly not-easy labor) but also current and future security for those who want a more fulfilling life (not a "better" life in the materialistic sense).

Stay tuned. I may have something before long.

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Bruce (1),

Same comment I made above.

(2),

See my comment to Tony below.

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Tony,

I love your enthusiasm and ability to dream in a time when it seems as if the whole human enterprise is about to fall apart.

I, too, have optimism when it comes to the human really-long-term project. I think we are more than just another ape, but we are still, at least, an ape kind. So we have some growing up to do. Some evolving. I think we will do so. No guarantees, of course. Evolution doesn't provide a guarantee of satisfaction nor a warrantee against defects. Nevertheless, its a project I continue to invest in!

I just suggest you also pay attention to what is actually happening and be ready to act appropriately.

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Great on Molly.

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Tom,

See my comment to John D. above, and follow the link.

Green energy is a bit trickier. See some of my posts in Biophysical Economics to see some of the problems with alternatives and so-called renewables. Not that there might not be a place for some of them in a transition. But it must be done very thoughtfully and strategically.

George

[Robin Datta]

Jobs are services that directly or indirectly manipulate energy streams to produce usable items from natural resources. Jobs need energy that is not being used elsewhere. A profusion of jobs needs a profusion of net energy - a large ERoEI.

Without an availability of new energy streams to be manipulated for useful purposes, there will be no new jobs to manipulate them.

[Robin Datta]

Producing food, maintaining infrastructure, producing iPhones, movies, etc. all imply the manipulation of energy streams to convert natural resources (primaly economy) into usable items (secondary econormy). When superfluous energy starts disappearing, the priorities have to shift to the most basic essentials: meeting the needs of hydration, nutrition and homeothermy: when it comes down to the bare essentials for staying alive, a lot of jobs will vanish.

[George Mobus]

Hi Robin.

And this IS the fundamental problem.

George

[Bruce]

Little know facts about the US labor market:

Private payrolls per capita are back to the level of the late '80s to early '90s.

Full-time employment per capita is back to the level of the late '70s to early '80s.

Employment for US males per capita is back to the levels of the '60s.

Employment per capital for young Americans age 16-24 is at the levels of the mid- to late '50s.

But, wait! There's more! Total local, state, and federal gov't spending, including personal transfers, plus debt service as a share of disposable income now exceeds reported public and private wage and salary disbursements.

But it's worse still. Total gov't spending plus household debt service combined is now 124% of private wages and salaries.

Effectively, the US private economy has created no net new payroll jobs per capita for 20-25 years, and no full-time employment for 30-35 years.

Gov't and household debt service costs mean that the private sector cannot grow.

Anglo-American rentier capitalism no longer creates paid labor opportunities for the society.

Taxing the private sector still more in order for gov't to borrow and spend will only cost more in lost private sector uneconomic activity and labor.

"The market" and gov't are too big, too wasteful, and dysfunctional. Peak Oil, population overshoot, and falling net energy and oil exports render the peak-Oil Age model of economic, social, and political organization no longer viable.

[George Mobus]

Bruce,

Interesting data.

George

[supra tk society]

I thank thee that I am none of the wheels of power but I am one with the living creatures that are crushed by it.

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[Jobs in the Medical Field]

I agree with you Bruce, jobs of coming from the additional expenses that government is making. However, a lot more has to be done to create more jobs. Praying may not be the best option because God will only help those who help themselves.

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