One of the most important, oft-ignored, trends in the world economy is the way technology is displacing humanity – capital equipment, both machines and software, is preferred to employing labour. It’s a major reason why high levels of unemployment persist despite economic growth, why there has been no growth for decades in middle-class living standards in advanced economies.
This latest example caught my attention…
Honda recently opened a new manufacturing plant at Yorii in Japan, which is producing a quarter-million cars every year. It employs just 2,200 workers.
In the US, the reported fall in unemployment is almost all due to people exiting the labour force, due to retirement of the baby-boom generation, out-of-workers finding it so difficult to find jobs that they’ve given up looking, and youths staying on at school because no paid employment is on offer.
Without those distortions, “the unemployment rate now would be 13 per cent,” Gary Shilling reports on Bloomberg.