Sunday, May 28, 2017
The Stark Mythology of Jobs, Jobs, Jobs – Dethroning King Coal
Without massive government direct investment in infrastructure, scientific research and education, without a “quality first” nation jobs priority, the American “good paying jobs” picture is bleaker than a burned down forest. Even the Trump vectors towards infrastructure are heavily dependent on the private sector given the right to implement usage fees (such as highway and bridge tolls) that will slam ordinary people traveling or just going to work. Thus the net economic benefit enhances the builder/investor corporations, sustains tax reductions for the rich and makes life simply more expensive (a new indirect regressive tax) for most Americans. The infrastructure jobs created will be more than offset by the increased cost of living to the rest of us.
The rising nations (like China) and smart net exporters (like Germany) are doubling down on direct government support for infrastructure, scientific research and education. Anyone can go to top German universities, virtually for free. Even Americans just dropping in for that free education. We get public education cuts and staggering student loans. And as new U.S. patents are falling almost in direct proportion to the withdrawal of governmental support, patents in those rising nations are skyrocketing. In case you don’t see the obvious, in a technologically-driven world, the countries that push the technology envelope prosper, while those who rely on a stellar past without investing in the future fade into oblivion. It has been that way throughout history. No exceptions. Ever. Oh, and fewer and fewer good “jobs, jobs, jobs.”
Tax-incented “job creators” are also motivated to use newfound expansion money – where they project economic opportunity – to invest in automation… not labor. So the money that used to be paid to those displaced workers is now paid to those who own the machines. And where labor is necessary, increasingly, it is for short-term contract labor, a harsh reflection of the new “gig” economy where workers have no benefits. Accelerating polarization, economic inequality.
That most permanent workers demand some form of a healthcare package – in a nation with far and away the most healthcare-cost nation on earth – is a further disincentive for companies to expand their workforce. This little factor led American car manufacturers to move tons of manufacturing plants to Canada where the hourly rates were the same, but healthcare was covered by a very effect government single-payer governmental healthcare system. $1,500 a car back then. A big deal.
True, we are at a disadvantage in healthcare. When healthcare became a governmental benefit, Canada was then really a part of the UK, and generally, Europe’s healthcare grew in a period of low economic, post WWII growth (rebuilding from the damage)… so prices for doctors and hospitals were comparably moderate. U.S. healthcare grew up, without WWII damage, in a period of extreme prosperity, strong unions, where medical costs escalated accordingly. So while most nations keep their healthcare costs under 10%+ of their GDP, we spend 20% of our GDP. Thus, a 10% reduction in our healthcare costs becomes a 2% slam to our GDP. But you can clearly see how lack of affordable healthcare makes the United States that much less competitive and how our cost-history make solving our healthcare issues “very complicated.” Little wonder that a 20% sector is attracting the most job growth.
Yet almost every major corporate focus, driven to increase efficiencies and hence profitability, is on using technology to replace labor. In the early years, the first jobs to go are those requiring the least skills – those requiring a high school or less education. Routinized manufacturing, low level bookkeeping and data tracking/storage, even retail sales (do you use Amazon?)… soon to move on to any job requiring driving a car or truck. As Donald Trump purges undocumented workers from construction and agriculture, do not be surprised as sophisticated “picking machines” and “drywall installation robots” take over. Consumer prices will soar; job creation, not so much. sIn time, artificial intelligence will also slowly slam higher level jobs, from financial analysts rising to doctors and lawyers.
Most of us grew up enamored of cars. Love ‘em. Fast, sleek or just plain practical. But as younger generations enter the job market, where inflation-adjusted pay ain’t what it used to be, increasingly they are moving closer to the center of cities (where the jobs are), using mass transportation… and where customized transport that used to be provided by car ownership, turning to Uber and Lyft instead. Owning a car is just too expensive when your pay is low and rent is high. When cars do become driverless, which is inevitable, the thrill of driving a car will slide farther down the scale of “I need that.” But try and pry a smart mobile phone from the hands of Y and Z generation-people and watch them fight! A different world.
So you will get a polarization in labor that reflects and exacerbates income inequality to politically unsustainable. Sooner or later the American body politic will understand that a populist pledge for new and better jobs is a manipulative sham. We have absolutely no near-term or long-term realistic plan on how to deal with a world where most jobs have been or will be replaced by self-teaching automation. Socialism? Taxing the automated machines as if they were workers? Universal basic income? Really? In the United States? But sooner or later…
So now we come to perhaps the most egregious jobs-pledge in recent politics: deregulating job safety, financial and environmental regulations in the name of reinstating “King coal” as the nation’s primary energy source. Nobody who can see the obvious has the slightest belief that this will work, only desperate coal miners grasping at non-existent straws from truly lying politicians. As international pressures mount – note how G-7 leaders pressed the president to honor the Paris climate change accords – and global demand for coal plummets (driving the price to levels where it will soon be uneconomic to extract), coal is, you should forgive the expression, toast… burnt toast, but toast nonetheless. And the notion of “clean coal” – a euphemism for shoving coal-processing and burning effluents into deep underground spaces for future generations to deal with – is a great big lie.
Where coal is being mined in high labor-cost countries like the U.S., it is subject to the same implementation of labor-saving technologies applied to the mining and oil/gas industry in this modern era. “With much of the low-lying fruit already picked with respect to global resources, the current generation of miners is facing the prospect of having to drill deeper in more remote areas while also processing ore bodies of lower concentrations. This often means having to operate in more dangerous situations while creating more waste.
“The new generation of automation and control (A&C) technologies is expected to play a key role in helping mining companies tackle these new challenges… ‘Automation and control for leading companies is seen as a major differentiator,’ says Bill Ellerton, mining expert with Siemens Ltd. A&C can give companies greater control over levels of granularity for what they're managing, and, as Ellerton points out, ‘smart mines are more competitive from the start.’” Mining-Technology.com (May 2008).
A January 25th report from Brookings fills in the details: “automation has been eating into coal jobs over a long period of time—years before concerns about climate change led to the environmental regulations that President Trump solely blames for the industry’s decline. Nationwide, employment in the coal mining industry peaked in 1920, when it employed roughly 785,000 people. The more recent decline started in 1980, when the industry employed approximately 242,000 people. By 2000, 15 years before the Environmental Protection Agency first proposed the Clean Power Plan and released new pollution guidelines to cut toxic emissions from power plants, industry employment had dropped to 102,000. By 2015, coal mining had shed 59 percent of its workforce, compared to 1980…
“In the next decade, the coal mining industry will likely lose even more jobs to automation. According to a report from the International Institute for Sustainable Development (IISD) in Winnipeg, Canada, the mining industry is primed for automation. It is highly capital intensive, pays relatively well, and buys expensive equipment. The industry has already adopted various automated technologies, including autonomous haul trucks and loaders; autonomous long-distance haul trains; semi-autonomous crushers, rock breakers, and shovel swings; automated drilling and tunnel-boring systems; automated long-wall plough and shearers; autonomous equipment monitoring; and GIS and GPS technologies. All of these technologies are already in use, and their deployment will be ramped up in the next 10–15 years…
“The IISD report concludes that automation is likely to replace 40–80 percent of workers in a mine, with newer mines and those with many years of life left most susceptible to automation.”
What’s worse, industry-leaders have seen the handwriting on the wall; they know that consumers want clean industry in their neighborhoods, that those who smear the environment will get massive bad publicity if not massive lawsuits. So notwithstanding our government’s new climate-change-denying-deregulating mantra, coal is over and not coming back. “The pressure to shift more of the country’s electric supply to renewable sources is not just a rallying cry for environmentalists. Some of the power industry’s biggest customers, like General Motors and Microsoft, have made a commitment to clean energy. And to help them meet it — and keep them from taking their business elsewhere — utilities are changing their ways.
“West Virginia, where coal is king, is no exception… Appalachian Power, the leading utility there, is quickly shifting toward natural gas and renewable sources like wind and solar, even as President Trump calls for a coal renaissance. Appalachian Power still burns plenty of coal, but in recent years it has closed three coal-fired plants and converted two others to gas, reducing its dependence on coal to 61 percent last year, down from 74 percent in 2012.” New York Times, May 26th.
Meanwhile, companies now feel free now to dump industrial waste into public waterways and into the atmosphere. Changing weather patterns, insect/disease migration and encroaching seas continue to wreak global havoc. Is it worth it to support a false and unsustainable jobs-pledge against decimating our environment?
Oh, and did you note how this blog didn’t even address the impact of globalization – which may have positive benefits for most of us but always displaces some of us? How our raising tariffs to protect uncompetitive industries will generate trade wars that will hurt all of us? All part of the stark mythology of “jobs, jobs, jobs.”
I’m Peter Dekom, and I wonder how many of these inane and self-destructive policies are irreversible.