[phaster]

its been awhile since I dropped by this board, and the only reason I'm here now is to post a review of "The Prize - The Epic Quest for Oil, Money & Power" which is an old PBS doc that I just found at Fry electronics on DVD this morning.

over the weekend on 60 minutes there was a segment on "robotics" and how its now possible for small mom/pop shops to buy a robot which according to the segment can work about 3 years for about $3 per hour

in other words many mfg jobs are now being brought back to the USA because of advances in robot mfg technology, so in effect those low skill workers in china who displaced low skill US workers are now going to have to compete w/ robots

like it or not this world is going to change between the have and the have nots!

those who have knowledge are going to be able to leverage that ability to adapt to a world where energy is going to cost much more that the historical norms of the past 100 years

heard a talk by matt simmons before he unforntnately died that he though there would be an energy plateu (which I'm guessing could be thought of as newer energy like NG from fracking, etc.) before global energy demand out strips supply thus causing a non linear exp growth in cost for energy

so just wondering how is everyone adapting to the new economic normal?

[Satori]

I'm taking an almost 30% pay cut starting in 2 weeks

same hours,same responsibilities
just significantly less money

also taking a MAJOR cut to pension plan of 40%

and thats not all

[SamInNebraska]

so just wondering how is everyone adapting to the new economic normal?

Pretty well. Volatility in the markets is a good thing, the last crash was quite a money maker for those who dived in at the low, knowing what would most likely happen next. Fuel prices aren't all bad for those who changed their OpEx profile by taking advantage of the new fuel saving technologies (VW TDI, Mazda SkyActive, Chevy Cruze diesel or hybrids) and wages have been pretty doing well for those participating in the drilling boom. Wages are up pretty nicely since the price for oil started increasing back in 2005, diversification of pension plan was an obvious move after the fall of 2008, just in case.

Recently I've even seen a trend of hiring among non-traditional students, older folks who went back to school and acquired various engineering or technical skills. Good for them as well, no point in sitting around worrying about the future when there are good jobs going unfilled.

[Lore]

I'm wondering if there are any real figures on those 55+ year old workers that got laid off from the furniture, textile and auto factories on all the jobs they got after being retrained in technical skills and as engineers?

[ROCKMAN]

Plaster - A coincidence: I found the same dvd in the bargain bin at WalMart for $5 last weekend.

I'm not very optimistic regarding how well many folks will be able to adjust. There are lots of stories about clever/ambitious folks who have already adjusted. What we don't see are the stories about the millions of folks without the ability. But I have a somewhat imbalanced view. I work with a group that helps folks at the bottom side of the economy deal with the world. But I'm not talking about someone trying to become an engineer or computer programmer. I'm talking about unsophisticated folks who can feel too intimidated to open a checking account. Folks who have a problem understanding a simple apartment lease. Some folks who can't even read such a lease.

And as a rule these are not lazy folks or unambitious folks or folks with drug/alcohol problems. They just desperately lack basic skills. They have a great deal of difficulty dealing with $3 gasoline. They have a problem when public transport schedules change. How do they cope in a world of increasing energy costs in the future when they had difficulty dealing with a world of $50/bbl oil?

[ralfy]

I think one reason why U.S. workers moved away from manufacturing was because income levels were better in professional work in the service industry. Hence, we saw large numbers taking college degrees to work as doctors, lawyers, engineers, etc.

The use of robot manufacturing technology will benefit not only small businesses but large ones that will compete with them. The same technology may be used in China and other countries with large forex reserves.

The problem is that manufacturers won't need a lot of workers but will still rely on the same citizens who were supposed to work for them, earn, and then use their earnings to buy what is manufactured. Some details here:

https://en.wikipedia.org/wiki/Capitalis ... al_markets

Thus, too many goods will be made but there won't be enough buyers. That means one has to expand markets and export, but the ones who are supposed to buy what is manufactured abroad also lack jobs. Apparently, changes between the haves and the have nots do not work well in capitalist systems, as the former relies on the latter to buy more goods and services. But for the latter to do that, it has to have more income.

The second problem is that increased production due to such technologies will mean more oil consumption, and that obviously works very much against the physical reality of peak oil.

[ROCKMAN]

ralfy – Some goods point but “I think one reason why U.S. workers moved away from manufacturing was because income levels were better in professional work in the service industry”. I don’t have the time to research it now but I’m pretty sure the largest shift in the US work force hasn’t been from manufacturing to profession degrees but to the service industries. Many of the folks I just mentioned are barely competent to hold service jobs let alone manufacturing positions. And getting advanced degrees? My single biggest struggle is trying to get many of these folks that dropped out of high school to get their GED’s. A lot more resistance than many would think. I used to try to teach reading and basic math to folks but gave it up: too frustrating…I did not have one person that didn’t eventually give up the effort before they made real progress.

Don’t take this wrong but I think many folks have something of an elitist attitude about how workers will be able to adjust to a PO world. Not that it’s anyone’s fault but a lot of folks don’t have that much intimate contact with the segment of society I’m talking about. I work in a world of great affluence. But I don’t live in that world. There are a few parts of my world where many folks wouldn’t tread…and for good reason. As I said earlier maybe I don’t have a balanced view of society and my concerns about the future are too prejudiced by dealing with a segment of that some would call “throw-aways”. But these folks (and there are a great many of them) are going to share our PO future and we are going to have to deal with them. Last weekend I dealt with a guy that got fired from the third min wage job I helped him get. He just isn't good at waking up on time.

[Lore]

Exceptions aside, the vast majority of people wake up every morning, put their shoes on one at a time and trudge off to work. If it were otherwise, nothing would be working. There will always be those that have never been trained to be responsible, engaged, or motivated to be a functioning part of the workforce.

The new economic normal is fewer jobs for lower economic classes as automation and globalization of the worker will continue to cannibalize the employed. Even skilled, and highly trained workers have and will continue to feel that pinch.

[ralfy]

Yes, I mean the service industry in general (around 70 pct of the work force?), but also with plans for several to receive further education, if not something like a college degree.

[Lore]

Yes, I mean the service industry in general (around 70 pct of the work force?), but also with plans for several to receive further education, if not something like a college degree.

Which is why we need a new paradigm for the masses. Modern capitalism as mentioned does not work well in a society of automatons.

[Pops]

I'm not sure this is a new normal, normal implies sustainable and long lasting and I don't know that where we are is going to last.

Workers are becoming redundant, I agree, the problem is they can't simply be mothballed. Even though they are less and less required for production, they are still required to consume. Kind of a conundrum.

I think trying to cope with that growing "leisure" class in addition to trying to "prime" an economy capped by energy costs has governments around the world pushing 1s and 0s out the door as fast as possible. Not to mention the push by the ownership to continue reducing their share of the cost.

Additionally, more and more effort and cost is and will increasingly be expended chasing gas/coal/oil. I'd like to think that jobs will be created in "renewables" but they are also dependent upon government borrowing, at least to this point.


Bigger Chart


It's no surprise to me that the OECD, by definition the largest consumers and wasters of energy on the planet, has seen it's growth capped while the non-OECD countries, who by the same definition are less wasteful -call them the scooter-commuters, have seen their growth surge and surpass the "developed" countries. Of course the most wasteful will suffer the most as waste becomes more and more expensive.




So, low growth paid for by government "borrowing", high oil cost that will only continue to increase in cost (monetary & energetic), and a population with fewer and fewer ways to earn a living...

A momentary plateau, maybe battle fatigue, a population holding it's breath perhaps; but definitely not a new normal.

.

[rollin]

How do you get used to an economy where increasing debt (money dumped into the system) has no real effect on the GDP? It's spinning the wheels time, we are stuck.

[Pops]

Britain embarked on its largest privatisation in decades on Thursday as the government unveiled plans to sell the majority of the near 500-year-old state-owned Royal Mail postal service.

http://uk.reuters.com/article/2013/09/1 ... BR20130912

The commie in me see this as the end game of trickle-up economics:
Privatize profits
Socialize costs
Reduce taxes
Let them eat cake

There was a brief moment where the dynasty of ownership was displaced by industrialization and the worker was needed. But the connected/containerized/automated economy now is returning us to the rentier economy once again. A rentier is someone who profits from mere ownership, whether it's a patent, copyright, real estate, etc. In the past it was the ownership of land, all the common folk owed their livelihood to the lord of the manner and in return they worked his land.

Marx thought the capitalist was a parasite on the worker. But now the capitalist no longer needs the worker, robots do the work. All he needs is capital and consumers.

Kinda makes you wonder who the joke is on if there are no consumers without work?

[ROCKMAN]

Ralfy – I have to go along with Lore on this. The folks on the bottom side of our work force pyramid have been there for a couple of generations. We’ve had re-education programs in place for decades along with programs helping them get their high school degree. I recall one program in Houston about 20 years ago: the govt spent $millions teaching unskilled workers how to lay brick. And some number of them did develop the skill. But with the general lack of brick laying jobs combined with so many contractors (like my brother) using undocumented and cheaper labor the program was a complete waste of money.

We have a large and relatively unskilled/uneducated portion of the workforce. This despite the standard efforts to alter that stat. BAU with respect to training most of these folks hasn’t changed the situation from what I’ve seen. I don’t know how we would do it but I think Lore is correct: it’s going to have to be a radical change from how our capitalistic system has worked. The system is designed to advance and reward the capable. Not so much for the rest of the population IMHO.

[KaiserJeep]

Capitalism can be made to work in a steady state or in a growing economy. However, the state we are in now is neither of those. Last month Obama's minions congratulated themselves over creating 117,000 new jobs, although what that statistic actually meant, given population increases, was we are about 80,000 jobs in the hole for the month. So many people have retired or are out of work that last year we passed the milestone where more people were receiving government payouts than were paying taxes. The resulting government deficits dilute the value of currency for everyone, penalizing those on fixed retirement incomes the most.

The truth of the matter is that the US standard of living has been slipping for about 4 decades. My Father had six kids and helped us all with education expenses, and owned two houses plus a nice RV. He retired with a nice pension and medical benefits from what was essentially a Blue Collar job.

I can't match his achievements after 37 years working in a White Collar job (Engineering), the last 27 here in Silicon Valley.

Rising energy costs are at the root of it. I expect our standard of living to slip further for the next few decades, due to the end of cheap fossil energy. The second half of the 20th Century was a Golden Age, never again to be equaled.

[SamInNebraska]

I'm wondering if there are any real figures on those 55+ year old workers that got laid off from the furniture, textile and auto factories on all the jobs they got after being retrained in technical skills and as engineers?

The change from one world to another can be tough, no doubt about it. Can you imagine what the apprentice buggy whip maker, watching this belching, loud, obnoxious thing running by on 4 wheels, scaring all the horses, must have thought the first time this happened? And then how that attitude might have changed over time? And that poor guy probably didn't get a chance to make it to 55 before being booted out of his industry of choice.

The good news is that even an old dog can learn new tricks, and if a 55+ really wanted to gain technical skills or become an engineer, they probably could. The question then being, if they already had the skills to tackle the daunting math and course load of engineering, why hadn't they already?

Make your choices in life before they make you, as the saying goes.

[Shaved Monkey]

In Australia.
My dad retired from a unskilled blue collar job with no personal pension plan.
He got a redundancy package
He and mum went on an OS holiday package tour (US Canada and Europe for 3 months)
It was full of mainly American Doctors and Lawyers and Upper Middle Class types who couldn't believe a factory worker could afford to do this and said it couldn't happen in America.
20 years ago
Mum is dead now Dad is still on the government old age pension and living a good life growing most of his food and saving money.
Those times are gone.
Now they want everyone to put their money into superannuation even though it will give you no return, so they don't have to pay the state pension.
They then scare people into thinking they need to work till they die,because they wont have enough pension to retire on.
They also like to tell people they need to maintain a virtual high paying wage to maintain their current lifestyle,so they need to work longer and put more in their super.
All delusions of how to cope with an ageing demographic while maintaing carrot chasers and shopping addictions in order to try and drive the exponential growth fantasy.
Im not buying that BS
No debt, reduce overheads, maintain a modest self sufficient lifestyle is what I can take from my father and grand father.
Invest in your health,your soil and your community.

[ralfy]

Likely, the change will involve localization, the formation of transition communities, and sustainability to meet basic needs. Skills that have to be learned include organic farming or gardening, permaculture, food storage and preservation, basic, alternative, and herbal medicine, and others needed for such a change.

[kiwichick]

only two scenerios worked in The Limits To Growth models

both involved stabilising human population

it will need countries that have net population growth from migration to
reduce the number of people they accept

and most countries will need to encourage their young people to limit the
number of children they have

one way to encourage this is to pay an incentive to women to delay
their first child so they are more likely to complete tertiary education for example

[MD]

....
over the weekend on 60 minutes there was a segment on "robotics" and how its now possible for small mom/pop shops to buy a robot which according to the segment can work about 3 years for about $3 per hour

Most "mom/pop" shops do not have the production volumes required to support robotic automation.

That said, factory automation continues to bring that volume threshold lower every year.

"Robotics" or more generally "factory automation" has been promoted to replace human workers in "dull, dirty, dangerous, difficult, or dark" tasks, and in this regard they are a boon to the human condition.

"The new economic normal", created by automation, requires less human labor every year.

In the early years of "robotic" or general factory automation (defined as the transition from complex and inflexible electromechanical automation to software driven flexible automation) resulted in the need for technical and engineering support in numbers almost equal to the displaced workers.

In time the reliability of the technology has improved to the point where a "normal" staff of technical support can maintain an installed base. The new maintenance professional does require a higher level of training, but the staffing requirements for these individuals are finally settling back to more traditional maintenance $/production $ ratios, at least in well established manufacturing segments.

These technologies continue to follow "Moore's Law", to a great degree.

What you will see continue to develop are highly flexible and adaptable systems that can be cost effective in ever decreasing production volumes.

Much more could be said on this topic. I've been in the automation business as a software and motion control engineer for 30 years now. I installed my first "robot" in 1987. It was a parts loader/unloader. It was a piece of crap. So much has changed!

Back on point: carried to the extreme, "robotics" will create (and is creating) an economic model that requires almost no human labor. Our entire workforce model is changing as a result.

We could shut them all off and go back to humans performing the "dull, dirty, and dangerous" tasks, but should we? A strong argument can be made for both sides of that question, but in the mean time our global manufacturing base is racing to make the robot world a reality. Are you ready to join the borg yet?