What if many of today's unemployed have been rendered unemployable by changes in the economy and the advance of technology?
In one of the most thought-provoking economics books of our times, A Farewell to Alms, Gregory Clark, discusses the concern that improved machines would reduce demand for labor. The answer during the Industrial Revolution was remarkably “no”. Most unskilled workers in fact benefited hugely from the Industrial Revolution, but not all:“there was a type of employee at the beginning of the Industrial Revolution whose job and livelihood largely vanished in the early twentieth century. This was the horse. The population of working horses actually peaked in England long after the Industrial Revolution, in 1901, when 3.25 million were at work. Though they had been replaced by rail for long-distance haulage and by steam engines for driving machinery, they still plowed fields, hauled wagons and carriages short distances, pulled boats on the canals, toiled in the pits, and carried armies into battle. But the arrival of the internal combustion engine in the late nineteenth century rapidly displaced these workers, so that by 1924 there were fewer than two million. There was always a wage at which all these horses could have remained employed. But that wage was so low that it did not pay for their feed.” (page 286)
The U.S. has 15 million officially unemployed workers and additional tens of millions who aren’t working and aren’t looking for a job. Could these folks be the draft horses of the 21st century?
Machines will continue to displace humans. The tipping point will come before machines can do the work of an average-IQ human because there are plenty of humans with average or above-average IQ who are lazy and will be happy to let machines take over their jobs.