Staring into the abyss - the jobless economy?

An anonymous businessman in Davos in charge of a firm with several hundred thousand staff around the world, was quoted on the BBC News website on 28^th January 2012: "We live in a world where wealth creation is uncoupled from job creation".

Those words are chilling. There are 200 million unemployed people around the world. Almost 40% of them – 75 million – are between 16 and 24, and every year another 40 million young people around the globe enter the workforce.

There are lots of reasons why this is bad. It is criminal to waste such a huge and valuable resource. It is criminal to continue delivering education and skills that are plainly irrelevant. Most of all, though, it is criminal to sentence the young people who represent the future of this planet to a lifetime of hopelessness and disappointment.

This is not just some blip on the long road to full employment or a small group of factory workers being displaced by automation, and it is not, to quote a well-worn phrase, “a car crash happening in slow motion”. What we are witnessing is the breakneck speed at which a fundamental shift can occur in the nature of work.

The pace of that change has produced an immense increase in global output over the past twenty years, yet because it is founded on increasing productivity in the private sector, job creation has not kept up with population growth.

In a period shorter than a human lifetime, tens of millions of potential job opportunities have gone from the global production chain, and the jobs that remain are changed beyond all expectation – hence, growing unemployment. And growing discontent.

Who can blame young people? In the race up the value chain it is always those at the lower end of skills and experience who are at risk. It wasn’t the blacksmiths who went broke in the shift from horses to cars - it was the people who collected horse dung from the streets whose talents were not transferable to the future.

We are seeing economies develop where job numbers are reducing – literally – without any negative effect on output, and with the private sector continuing to improve performance using fewer people on the headcount every year.

This is not an event. It is not a cycle. It is a trend. Either the private sector hires more people and pays them less, thus maintaining growth at the expense of individual wages, yet at least creating more jobs. Or, the public sector employs more people, which (as public sector productivity is low and declining) will not help output, yet would at least create employment.

Neither of those is going to happen in a hurry. Private sector workers would swoon at having their wages possibly halved, and the public sector doesn’t have any money.

It’s time for a rethink on what constitutes employment. It’s no use hoping for the upturn to come – things have changed. Unemployment figures won’t go up and down by much any more. Full employment won’t be back any time soon, or at all.

When “wealth creation is uncoupled from job creation”, we’re not just talking about a jobless recovery. For young people, we’re talking about a jobless economy.