Are the employment trends, from agriculture to manufacturing to services, cause for worry? Far from it!
Marian L. Tupy —
The U.S. President Donald J. Trump has repeatedly lamented the supposed decline of the American manufacturing sector. During his presidential campaign, he asserted that Americans “don’t make anything anymore” and pledged “to restore manufacturing in the United States.” Yet there is no reason to think of manufacturing jobs as the gold standard in employment. The nature of work has been changing for about 250 years and it is likely to continue to evolve – thanks to declining birth rates, and the rise of robotics and artificial intelligence – in the future.
Prior to the Industrial Revolution, between 80 and 90 percent of the world’s population worked in agriculture. At the start of the 19th century, people in Western Europe and North America began to move into manufacturing jobs en masse. Factory jobs were not universally welcome. Factory jobs were criticized by philosophers, like Karl Marx, lampooned by comedians, like Charlie Chaplin, and bemoaned by poets, like William Blake.
Marx felt that factory production, in which products are generated using an endless sequence of discrete and repetitive motions, did not offer the worker enough psychological satisfaction. The worker, who did not design or market the product, was thus “alienated” from the latter. Chaplin turned the soul-and-body crushing assembly line mode of production into a hilarious comedy skit in his 1936 movie, Modern Times.
And, who can forget William Blake’s 1808 poem Jerusalem, in which the artist mourns the “satanic mills” (i.e., factories) that in his view pockmarked the bucolic face of the English countryside?
And did those feet in ancient time Walk upon England’s mountains green? And was the holy Lamb of God And did the Countenance Divine Shine forth upon our clouded hills? And was Jerusalem builded here Among these dark Satanic mills?
Today, we know that most people moved from agricultural work in the countryside to factory work in the cities willingly, for the latter provided higher wages, and greater independence and cultural stimulation. This trend continues to this day. Between 1991 and 2017, for example, agricultural employment fell from 43 to 27 percent of the global workforce. Only in very poor countries, such as Bhutan and Zimbabwe, does agriculture continue to employ over 50 percent of laborers.
In the United States, employment in the manufacturing sector continued to grow until the middle of the 20th century. In 1950, for example, manufacturing employed approximately 35 percent of all workers. Fifty years later, it employed only 15 percent of all workers. Conversely, the share of workers employed in the service sector increased from approximately 18 percent in 1960 to almost 80 percent in 2000. Similar trends can be observed in other advanced economies, such as the United Kingdom, Germany and Japan.
Meanwhile, manufacturing jobs have grown in countries that embraced industrialization in more recent decades. Between 1991 and 2017, for example, industrial employment rose from 12 to 19 percent in Bangladesh, from 19 to 24 percent in China, from 15 to 25 percent in India and from 9 to 23 percent in Vietnam. History suggests that, as these populous and rapidly industrializing countries become richer, the service sector will play an increasingly prominent part in their economic development.
Are these employment trends, from agriculture to manufacturing to services, cause for worry? Far from it! The service sector consists of jobs in the information sector, investment services, technical and scientific services, healthcare and social assistance services, as well as arts, entertainment, and recreation services. Most of these jobs are less physically arduous, more intellectually stimulating and better paid than either agricultural or manufacturing jobs.
They are, also, less dangerous. In 2014, global fatality rates per 100,000 employees in agriculture ranged from 7.8 deaths in high-income countries to 27.5 deaths in South-East Asia and Western Pacific. In manufacturing, the range was from 3.8 in high-income countries to 21.1 in Africa. The range for the service sector was from 1.5 in high-income countries to 17.7 in Africa.
The evolution of the workplace is far from finished. With fully mechanized farms on the horizon, agricultural employment in advanced countries is heading toward zero. Similarly, the rise of robots and artificial intelligence is likely to displace tens of millions of manufacturing and service sector workers in rich countries.
Collapsing fertility rates in rich countries, however, will likely prevent the emergence of mass unemployment. Moreover, high levels of human capital and the relative openness of advanced economies are likely to unleash innovation in unexpected ways, thus soaking up displaced workers.
The employment picture is less sanguine in some poor countries. That’s especially true of Africa, the population of which is projected to go on expanding well into the 22nd century. Scandalously mismanaged state education systems retard development of human capital and lack of economic freedom, especially rigid labor markets, make African countries ill-positioned to respond to the challenges of automatization.
Will the millions of young Africans without a prospect for meaningful employment force change upon their sclerotic governments or opt to migrate out of the continent? Time will tell.
1,000 Bits of Good News You May Have Missed in 2023
A necessary balance to the torrent of negativity.
Malcolm Cochran —
Reading the news can leave you depressed and misinformed. It’s partisan, shallow, and, above all, hopelessly negative. As Steven Pinker from Harvard University quipped, “The news is a nonrandom sample of the worst events happening on the planet on a given day.”
So, why does Human Progress feature so many news items? And why did I compile them in this giant list? Here are a few reasons:
Statistics are vital to a proper understanding of the world, but many find anecdotes more compelling.
Many people acknowledge humanity’s progress compared to the past but remain unreasonably pessimistic about the present—not to mention the future. Positive news can help improve their state of mind.
We have agency to make the world better. It is appropriate to recognize and be grateful for those who do.
Below is a nonrandom sample (n = ~1000) of positive news we collected this year, separated by topic area. Please scroll, skim, and click. Or—to be even more enlightened—read this blog post and then look through our collection of long-term trends and datasets.
We have more time to do as we wish and fewer needs that force us to do as we must.
Tim Worstall —
Summary: This article challenges the common perception that human progress has made us work harder and deprived us of leisure. It shows how both market and domestic labor have declined over time, thanks to technological innovations and economic changes. It traces the history of labor alleviation from the Viking era to the present day, and celebrates the benefits of having more time and freedom to pursue our interests.
People often complain that we are all working too hard and that human progress is pointless if we have to labor and strain to achieve our current lifestyles. They say we would be better off curtailing our desires and returning to some Edenic life with more time for ourselves. The problem is that Edenic life never existed. In fact, over the past millennium, humanity has been working less and less. And a thousand years is probably long enough to make the claim that working less is a trend, not a blip.
To understand working hours, it is important to recognize two points. First, households (some societies define households as containing only parents and children, while others extend the definition to cousins and nephews and so on) are the central economic units that should be discussed. Second, labor comes in two flavors: domestic work and market work. Domestic work includes food preparation, childcare, cleaning, or any other labor within the household. Market work generates money or goods to trade for any goods and services that the household does not produce. The “labor burden” on the household is the combined number of hours spent doing those two types of work.
Market and domestic labor can substitute one another. Children can go to kindergarten, and food can be bought as take-out. Likewise, clothes can be purchased from a factory, or they can be stitched at home. People tend to use the option that gets them the desired good or service with the least amount of work. As I will show below, the net effect of changes in those two forms of labor determines the total household labor supply. Or, to put it less formally, it determines how long people have to work to gain what they want. Once those two kinds of labor are added up, a declining trend in the total number of hours worked becomes apparent. Consider this report from the Federal Reserve Bank of Boston:
Specifically, we document that leisure for men increased by 6-8 hours per week (driven by a decline in market work hours) and for women by 4-8 hours per week (driven by a decline in home production work hours).
And that was just for the period between 1965 and 2003. A closer look at the 20th century suggests that market working hours fell for men and rose for women. The rise in female market working hours was precipitated by technological innovation and a concomitant decline in the number of domestic working hours. Domestic working hours fell greatly for women and, less dramatically, for men. The net effect of the four processes was that leisure hours rose, and total working hours fell, for both men and women.
In his 1930 essay Economic Possibilities for our Grandchildren, the British economist John Maynard Keynes predicted that the next century would usher in an age of prosperity. He also forecasted that people would work less and spend more time at leisure. Keynes turned out to be right. But many modern readers, who come across Keynes’ prediction of a 15-hour workweek, wonder why they are still putting in 40 at the office. The answer is that the work we killed was the domestic labor done largely by women.
One author estimates that it took 60 hours a week of physical labor to keep a 1930 household working. Today, it takes perhaps 15 hours. Those numbers are not exact, but when you consider the washing machine, the gas oven, the vacuum cleaner, prepared food, and steam irons, the amount of household work eliminated is immense. One of Hans Rosling’s TED talks recounts how the washing machine brought him books. According to the Swedish physician, once the washing machine liberated his mother from laundry, she had more time to read to him. The South Korean economist Ha Joon Chang claims that the washing machine – by which he really means all domestic labor-saving technologies – changed the world more than the internet.
But labor alleviation did not begin in the 20th century. In her new book (The Fabric Of Civilisation came out in November 2020), the American writer Virginia Postrel estimates that it took 365 full days of work to spin enough thread to make a Viking sail. Days and days of work to create enough thread to weave a bandana and weeks to make a pair of jeans. The Vikings used the drop spindle to make thread – a basic technology that humans used for millennia. The spinning wheel, which partly mechanized the process, arrived in Europe sometime in the 11th or the 12th century A.D.
Then came the Industrial Revolution, first with the Spinning Jenny, which was followed by Crompton’s Mule and endless other derivatives. These machines progressively automated what was a horrendously time-consuming and nearly exclusively female domestic task for centuries. The economic historian Brad Delong has remarked that when women of any class are depicted in older literature, there is always reference to their spinning. By the time of Jane Austen’s novels in the late 18th and early 19th century A.D., spinning is never mentioned – it was all done in the factories by then.
We all have more leisure now than our forebears did. We have more time to do as we wish and fewer needs that force us to do as we must. But this wonderful outcome of human progress is obscured by the fact that, in large part, it is the household labor that has been automated away. Sure, the Roomba might not be a great leap forward, but it is just the latest iteration of a process that began a thousand years ago. And there is no sign of it ending.
Don't Count on a “Tech-Driven” Employment Apocalypse
New technology creates more, better jobs than it costs. If anything, automation may lead to labor shortages.
Livio Di Matteo —
Media reports often paint a dire picture of technological change and automation which they fear will spawn a future rife with massive job loss and less employment. And yet, a labour shortage— not a glut due to mass unemployment— looms in Canada thanks to retiring baby boomers and our aging population.
Furthermore, history suggests that when technological change alters the employment mix, the economy grows, creating new jobs and more opportunity. For example, a Deloitte study of census results for the United Kingdom since 1871 notes that, despite fears of job destruction, technological change spurs job creation. Over the long run, the UK has experienced increases in both employment and the labour force. While there were declines in some occupations such as agricultural labourers, washers, launderers, telephonists, and telegraph operators, other occupations such as accountants, bar staff, hairdressers, service workers, etc. experienced employment growth.
The situation is the same in Canada. Between 1851 and 2017—an era marked by rapid technological change— our population grew from 2.4 million to 35.2 million, a 15-fold increase, while the Canadian labour force grew from an estimated 762,000 people to 19.7 million people, a 26-fold increase. And according to employment data, from 1891 to 2017, the number of employed people in Canada grew from 1.6 million to 18.4 million, a 12-fold increase, while the labour force (which includes employed people, unemployed people seeking work, and employers) grew—from 1.7 million people to 19.7 million people, also a 12-fold increase.
While employment and the labour force grew alongside technological progress and development, the composition of employment also changed. For example, in 1921 agriculture still accounted for nearly one-third of all employment in Canada (down from 50 percent in 1871) compared to two percent by the early 21st century. Overall, the last 150 years in Canada has seen a shift from goods production (manufacturing, for example) to services (health, for example) as the dominant source of employment. Even as demand for many traditional jobs has declined, entirely new occupations have arisen that did not exist mere decades ago—think of today’s social media strategists, solar panel installers, and genetic counsellors.
Forecasts suggest that in coming years, employment and the labour force in Canada will continue growing, but at a diminished rate with employment growing slightly faster than the labour force. The result? Low unemployment rates. Again, this is due largely to our aging population and the expected decline in labour force participation rates. Overall labour force participation in Canada has declined over the last decade but interestingly has grown among people aged 55 and over, reflecting the progress of the demographic bulge known as the Baby Boom.
In 2016, people aged 55 and over accounted for 36 percent of Canada’s working-age population—the highest percentage since 1976, the first year of comparable data—with this proportion expected to reach 40 percent by 2026. Yet this demographic will eventually retire, opening up large areas of employment to the smaller age cohorts behind. Demand for workers is expected to be high in health care, computer system design and related services, support services for mining, oil, and gas extraction, social assistance, legal, accounting, and other professional services, arts and entertainment, and food services, such as chefs and servers.
Clearly, contrary to popular belief, history teaches that technological change has been marked by increases in total long-term employment, notwithstanding shortterm job loss for individuals. That’s good news. Canada’s labour market will likely experience continued employment growth (though at lower rates than in the previous half-century) due to demographic changes and changes in labour force participation rates. Our aging labour force, the retirement of baby boomers, and the creation of new jobs spurred by technology, will combine to create a period of chronic labour scarcity, which means the demand for workers will be high.
This originally appeared in The Fraser Institute’s Fall 2019 Quarterly publication.
Desire for greater material well-being is not a moral failing. Yearning for a better life has driven progress over the past 250 years.
Ryan Bourne —
British economist John Maynard Keynes once said that “[p}ractical men who believe themselves quite exempt from any intellectual influence, are usually the slaves of some defunct economist.” It’s unclear whether Chinese tech billionaire Jack Ma is a Keynes discipline, or considers himself immune to economists’ musings. But in forecasting that technology and automation might deliver a 12-hour working week, Ma certainly echoes Keynesian thinking about economic progress.
Sharing a stage with U.S. entrepreneur Elon Musk in Shanghai, Alibaba founder Ma this week predicted that artificial intelligence and automation will deliver unheard of gains to productivity. Offering an upbeat story of its effects, he suggested that producing more with fewer workers will reduce the desirable working time to just “three days a week, four hours a day.” Instead, we will be able to spend extra time enjoying “being human beings” and going to “karaoke in the evening.”
In a 1930 essay entitled “Economic Possibilities for our Grandchildren,” Keynes made a similar prediction. Within a century, he believed we’d be four to eight times as rich. Such would be the technological advances in production driving more output with less labor input, our economic needs could be fulfilled by just working “three-hour shifts or a fifteen-hour week.” Even working that long would be reflective of our natural human desire to stay occupied, rather than out of necessity. Keynes even mused that people would have more time to sing too!
As we contemplate the long hours we’ll spend at our desks this next week, it’s easy, in retrospect, to dismiss Keynes’ musing as a flight of fancy. But in fact, a lot of what he wrote was prescient. What he got wrong should make us think skeptically about Ma’s musings of what it means to be human.
Keynes’ forecast of our prosperity boom was unnervingly accurate. With a decade to go, the U.S. is already six times as rich in real GDP per capita terms as on the eve of 1930.
Improvements in the technology of domestic appliances has meant that traditional “household work” — the basics of laundry, cooking, and cleaning — have fallen time-wise from being a near full-time occupation (38 hours) in 1930 to just 15 hours in 2015. If Keynes’ prediction had been about chores, he hit the bullseye.
What he got wrong was what technology and innovation would mean for paid working hours. Yes, full-time production workers’ average hours have fallen from 48 hours to 40 hours since 1930. Productivity improvements, in other words, delivered a whole extra day off, as we saw the birth of the modern weekend. As a result of more part-time and flexible work, an average employed person’s working hours have fallen from 38 hours per week in 1950 to 34 hours per week in 2014 too. Yet we are clearly nowhere near the 15-hour work week he projected.
Keynes severely underestimated that, when free to choose, most of us seek further material advancement and betterment, and value the inherent dignity that comes from productive labor in the service of others. As progress raises wages, the opportunity cost of leisure rises. Faced with this trade-off, we still maintain substantial hours of employment.
This search for greater material well-being is not some moral failing, as Keynes implied. In fact, it’s precisely this yearning for a better life that has driven progress in the past 250 years. Most people are not content with modestly rising living standards driven by technological improvements producing slightly more with fewer and fewer workers, allowing us to “have fun.” They want to enjoy the best goods, services and experiences possible for their families. They want to feel the dignity of their services being needed. They want to see their living standards propelled.
If predictions about automation are correct, then the next 30 years could well see rapid improvements in technology, as Ma implies. Service sector employment could be revolutionized, with lots of tasks currently undertaken by lawyers or doctors ripe for automation or being replaced with artificial intelligence or robotics. This will make us rich, and disrupt established occupations and work patterns. From a policy perspective, that will bring demands for jobs to be protected and innovations restrained. Predictions of “mass worklessness” will feed calls for huge social programs too, whether universal basic income us or government project jobs to give people meaningful purpose.
But the past century shows we shouldn’t fear technological change, nor presume its labor market effects will have vast destructive social consequences or change who we are. As the opportunity for leisure time and greater comfort has risen, we’ve maintained our desire for betterment and meaningful labor. That shows there’s no discrepancy between employment and “being human beings.” Striving and toiling is part of who we are.
Contra Ma and Keynes, then, I doubt increased productivity will result in mass karaoke singing. We will enjoy more comfort and the option of more family and leisure time, yes. But the recent past suggests that workers will shift into jobs delivering new entrepreneurial pursuits, into meaningful vocational activities, and new jobs where human contact and effort are highly prized by further enriched customers.
