More and more people are starting to worry about something that’s trouble me for some time: Zero Marginal Product workers. The short definition: workers whose maximum output simply isn’t worth the minimum cost of employing them. They literally will lose you money if you employ them.
Every industry has these people, and always has. The beauty of the free market has been that these people eventually get pushed out and reshuffled until they find their way into a position where they have value to the employer and produce more than they consume.
But what if that is breaking down? What if we have a growing number of workers who aren’t just unemployable in good industries… they’re simply unemployable? What if we’re growing a new subpopulation that literally isn’t productive enough to be worth hiring in any industry?
Dan Holm warns against this exact thing. Forgive the lengthy excerpts below… but then, you really should read the whole thing anyway.
Few of the very bright have have ever had to make the unhappy calculation: Forty times a low minimum wage minus bus fare to work, rent, food, medical care, and cable. They have never had to choose between a winter coat and cable, their only entertainment. They don’t really know that many people do. Out of sight, out of mind.
Cognitive stratification has political consequences. It leads liberals to think that their client groups can go to college. It leads conservatives to think that with hard work and determination…..
It ain’t so. An economic system that works reasonably well when there are lots of simple jobs doesn’t when there aren’t. In particular, the large number of people at IQ 90 and below will increasingly be simply unnecessary. If you are, say, a decent, honest young woman of IQ 85, you probably read poorly, learn slowly and only simple things,. Being promoted, or even hired, requires abilities that you do not have.
By the definition of IQ and the normal distribution that it follows, half of the population will have an IQ below 100 and a full third of the population will have an IQ below 85. In other words, Mr. Holm is arguing that one third of our population is already becoming unemployable.
He ends his piece by getting to the real heart of the matter:
The question arises: What does the country do with the large and growing number of people whose labor is worth nothing? Or, perhaps more accurately, whose labor isn’t needed? We see this in the cities today. An illiterate kid in Detroit has no value at all in the market for labor. Assuming that he wants to work, a questionable assumption, what then? Endlessly expanding welfare? What about the literate, averagely intelligent kid for whom there are no jobs? If people working in McDonald’s can barely live on their wages, and strike, or the state institutes a higher minimum wage, McDonald’s will automate their jobs, is automating their jobs, and conservatives will exult—the commie bastards got what they asked for.
I don’t have an answer – only more bad news. The problem is far worse than even Mr. Holm’s dire picture, because we’re looking at a future of more and more automation. We’re far further from true AI than most people think – perhaps no closer than we were 30 years ago. But we’re far closer to automating your job than you probably think. Even most “knowledge worker” and “creative sector” jobs are approaching automation.
My fellow software engineers seem to believe that computers will never be able to do what we do. But they’re almost certainly wrong – even programming other computers will probably be automated 50 years from now. Our industry has already hit the point where 80% of “software engineers” are doing nothing more than putting a glorified GUI on top of a database that was already written years ago by Oracle, Microsoft, or a team of open source engineers.
On the far end of the scale, my oldest son flew out to Kansas last summer to visit some distant relatives. One of them still owns and operates a major farm. I remember traveling out there to visit them when I was the same age he was last spring. My fondest memory was of getting to drive the tractor. When my son came home, I asked him if he had fun driving the tractor. His response?
“The tractor drives itself, Dad.”
(H/T to Vox Day for the link)