Ken Fisher for Forbes: 'Why Job Growth Is Overrated'
It’s called productivity. It was in the 1920 census that we first saw fewer than a third of Americans working on farms. But now we grow infinitely more food, and we are massive net exporters, with some 1 million jobs. Farming makes up 0.7 % of our labor force. Want to return to 1920 or 1950? Would it help to take all the Occupy folks and make them harvest corn? That would only hurt output.
We’ve had a huge electronics-driven productivity boom in recent decades—letting us do more with less. For example, we’re more energy-efficient than ever. We need exactly half the barrels of oil equivalent for an inflation-adjusted $1,000 of GDP today than we did in 1980.
Moore’s Law in semiconductors is 47 years old, but it still has another 15 years of life, according to Intel. Hence, an integrated circuit will cost less than two cents on today’s dollar by 2025. Kryder’s Law is shrinking magnetic memory costs even faster. Koomey’s Law and the Shannon-Hartley Theorem ensure that telecom costs will keep dropping.
There is no magic pill for productivity, but if we continue to innovate as we have been it will mean more output with fewer jobs in the future. In the long run we will all benefit.