Productivity vs. employment

I got a little agitated today after reading a post by Matt Yglesias, one in which he's critical of Michael Lind for saying that we're in a period of deindustrialization. Matt's contention, as far as I can tell, is that we are not deindustrializing, because our industrial output has been rising. He compares it to de-agriculturalizing, which he also says hasn't been happening because we're still producing "tons and tons of food," even though the sector is employing far fewer people than it used to:

It often seems like common sense to believe that if a society gets really good at doing something, then tons of people are going to be doing that thing. But oftentimes the reverse is true. Vastly improved agricultural productivity means fewer farmers. Improved industrial productivity means fewer people in factories. And, indeed, improved information technology will in the long run mean fewer people doing information work.

So Matt says, correctly I think, that:

The future is likely to entail increasingly numbers of Americans working in fields where we’re not seeing any dramatic improvements in methods or technology. Teaching preschool. Cleaning houses. Cooking food all up and down the scale from lowly burger-flippers to high-end chefs. Taking care of the elderly. That sort of thing.

My agitation doesn't come from thinking that Matt's wrong, but because Matt doesn't follow this chain of thought through very far. It's possible he's just assuming that we'll follow his thinking further ourselves, so I may not have any disagreement with him. But the blithe way he tosses off this list of New Economy jobs is something taken for granted by a whole lot of people, many of whom believe, impossibly, that we'll shift to this kind of work but maintain our economy. And that can't be true.

Moreover, this shift has huge implications for one of the industries we still believe to be an area of growth, education. As I commented on this post:

Let’s even grant Matt every point he’s making, and think about the implications of the brave new world of jobs. None of the ones he mentions, save possibly preschool teacher, requires the kind of college-prep -> college -> grad school orientation that dominates current talk about education. You can add to that: solar panel installer, liquid hydrogen truck driver, and most of the other new jobs that will come from New Energy.

At some point, we have to figure out what society is going to need our kids to do, then determine what form education should take to get us there - it will probably not be the “all kids go to college, no matter the cost” thinking. One hesitates to offer the obvious, but technical training? Manual arts? A return to the days when a whole passel of kids went through our public schools learning actual skills they were likely to use, rather than discovering the valueless wonders of parsing Moby-Dick?

As it is, we put kids on the college-prep assembly line, grabbing the ones who fall off, branding them failures, and giving them jobs in, yes, cleaning houses, cooking food, taking care of the elderly. Perhaps we can restore some dignity to these necessary jobs by making them destinations, rather than fallbacks for those who can’t quite get the whole conic section thing.

But there is a larger point here, one I've been pondering for a while. It seems clear that, as Rick Shenkman wrote in a book I recently reviewed:

The public is fixated on employment as a measure of economic success; economists, in contrast, focus on productivity.

And the Yglesias post illustrates that thinking perfectly. We're not deindustrializing or de-agriculturalizing, just look at the output and productivity numbers. But the American citizenry is made up of workers and their families, people who can't eat productivity. If economists want to focus on broad aggregates, that's fine, but as their numbers come increasingly into conflict with the real experience of real people, it will be the economists who are discredited. Higher output from the factory you now drive by instead of drive into may benefit some people (particularly the executive class), but it doesn't do a whole lot for you.

Clearly, and I've certainly written about this before, we're going through some absolutely titanic changes in our relations with other countries, to multinational corporations, to our educational institutions, to our political structure, and, ultimately, ourselves. When that kind of shift happens, we need to think seriously about the implications, and stop applying old rules to the new world.

If a politician tells you we need to spend money, your money, to send every child to college, and you know that many of the jobs waiting on the other end come from the low-end service economy, you can ask why.

If an economist tells you that productivity is important, employment is not, it's fair to ask what will happen if productivity gets so high that the "natural" rate of unemployment is, say, 20%.

If anyone tells you that we can sustain a growing economy when we export well-paying, stable jobs and create a contingent, service-based workforce, it is incumbent on you to ask how.

There may be good answers to these questions; what troubles me is that these questions aren't being asked. We are going on, wrapped safely in our assumptions that the world is the same now as it was yesterday, ignoring the very real results of our policies. And that needs to stop.