The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (TheStreet) -- In my last employment article, I noted that we only recently figured how to use information technologies effectively. The result? A dramatic increase in the use of labor-saving technologies.
My conclusion: to get back to full employment, consumers will have to be induced to "binge" again. Not a good option. I cited the historical work of Juliet Schor, economist and sociologist and the author of The Overworked American: The Unexpected Decline in Leisure, and more recently, True Wealth: How and Why Millions of Americans Are Creating a Time-rich, Ecologically Light, Small-scale, High-satisfaction Economy. She points out that historically, civilizations work fewer hours as they develop (see Table 1).
Information on a number of developed countries for more recent years is provided in the graph. Even over this period, one can see a decline but with an uptick at the end of the period as people work more hours after capital losses in the global recession.
Elliott: I have considerable sympathy for your main point, but readers have raised a number of questions about the feasibility of your proposals. Let me start with where we are now. My vision (and I don't like it) is that machines are taking over almost all manual jobs. That means only people with some education (to run the machines) will get jobs and the less educated will not. A grim prospect.
Schor: You're right that we are going through a wave of mechanization, which has also extended to white-collar labor. The only way to make this work now is to reduce hours of work. Trying to grow our way out of technical-change induced unemployment is ecological suicide. We're already producing more pollution than the climate -- and planet -- can tolerate. Historically, we reduce hours per year and over the lifetime to respond to technical change. For example, in the U.S. and most other global North countries, annual hours fell between from 3,000 in 1870 to under 2,000 by 1973. And that's a big part of the point, isn't it? Economic progress gives us more time to live, rather than slave.
Schor: The current policy of austerity will only make things worse. And the most commonly cited alternative, federal stimulus can help, but only up to a point. There isn't a political will for a large enough stimulus. More importantly, Republicans want to cut taxes to stimulate the economy, and lower taxes will create fewer jobs than higher government expenditures. But the bigger point is what I call "indiscriminate macro-policy," Keynesian pump priming. This will have us spending money on things we don't need, rather than investing in what we do need -- clean energy, education, mass transit. On the labor market side, we need to do things which open up the labor market.