Fake Jobs at Fake Companies

Several months ago I did a post on automation and it’s elimination of “good jobs.”  I wondered then,” …frankly I don’t know what to do about the problem of people being rendered permanently unemployable.”  I still don’t, but it’s been an observation of mine that Europe is about 20 years ahead of us in all of the bad indicators, and a permanent unemployed class is one of those indicators. So once again, from France, an idea whose time may soon be coming to the United States; fake companies for the unemployed.

From the New York Times:

In Europe, Fake Jobs Can Have Real Benefits

Sabine de Buyzer, working in the accounting department, leaned into her computer and scanned a row of numbers. Candelia was doing well. Its revenue that week was outpacing expenses, even counting taxes and salaries. “We have to be profitable,” Ms. de Buyzer said. “Everyone’s working all out to make sure we succeed.”

This was a sentiment any boss would like to hear, but in this case the entire business is fake. So are Candelia’s customers and suppliers, from the companies ordering the furniture to the trucking operators that make deliveries. Even the bank where Candelia gets its loans is not real.

More than 100 Potemkin companies like Candelia are operating today in France, and there are thousands more across Europe. In Seine-St.-Denis, outside Paris, a pet business called Animal Kingdom sells products like dog food and frogs. ArtLim, a company in Limoges, peddles fine porcelain. Prestige Cosmetique in Orleans deals in perfumes. All these companies’ wares are imaginary

The whole concept of fake companies is mind boggling.  The idea that you can set up a parallel economy of fake companies that produce nothing, but can’t figure out a way to make that capital and manpower do something useful and profitable is stunning.

Office Space I did nothing

As a training concept, which these were apparently originally set up for, a fake company isn’t a bad idea. It certainly seems to beat the American government version of job training, which has devolved into one failure after another. However these have gone from training programs to place holders for the unemployed.  I suppose from a Keynesian viewpoint, at least the modern Obama era view; there isn’t any difference between a fake company and a real one.  It employs people and provides them an income to buy goods and services. In real economic terms, that’s pointless, but heh, we’ve passed real economics a long time ago.

Convicts manage to make real goods so I don’t understand why fake companies couldn’t do the same, but this is a concept I expect to see more of as our permanent unemployable underclass grows and grows, and we scratch our heads trying to figure out what to do with them.

Office space stapler

The Shrinking Need for a Workforce: This Time it’s Different

There’s a YouTube video making the rounds of the internet that I highly recommend.  Go ahead and watch.

I’ll wait.

Done?  Good.

For those who will stubbornly refuse to watch the video, this is the synopsis.  Automation over time has made things easier for us since it’s reduced the demand of physical labor, which we’ve benefitted from.  But automation is not only continuing to reduce the number of boring, repetitious jobs, it’s now going after higher end jobs.  An Oxford Study predicted that 47% of US jobs could be lost to automation in 20 years.  Burger flippers and baristas for sure, but also lawyers and doctors are at risk. There is a lot fewer tax preparers now then there were in the days before tax preparation software.  So it’s not just low end drudge jobs that will be going away, it’s upper end jobs that require education that used to provide a lot of middle class and upper middle class incomes.

Previous automation, since the Industrial Age, has often provided a springboard to new industries and new jobs.  In 1870, between 70 and 80 percent of the US workforce was involved in agriculture.  In 2008, it was less than 2%.  But industrialization created vastly more jobs than were lost.  Automation in agriculture didn’t cause widespread unemployment, it freed up millions to work.  Within my lifetime, there has been an explosion of new jobs that just didn’t exist when I graduated high school.  Web Designer anyone?

There are, as a percentage more professional, high paying jobs than there used to be. That’s part (but only part) of the reason for expanding income inequality; more “good jobs” at the upper end. Professional jobs for people with technical BS degrees or graduate level.  But what about the percentage of new unskilled or semiskilled jobs?  Is the economy creating unskilled jobs paying much better than the minimum wage?

So never mind the video and its predictions. We can just look back over the past 50 years and see that the new jobs that are created are for a more highly educated and highly skilled subset. Automation improvements like cash registers becoming easier to operate as they become oversized calculators, are not creating new jobs, they are making already low skilled jobs even more low skilled.  At least until the jobs are automated away all together.

If these trends continue, with more newer jobs being for the more educated class and few new low skilled jobs created, what are we going to do with people who are just not smart enough to get a Phd in Neurolingustics (as an example)? We are improving automation along the lines of Moore’s Law, but there isn’t a Moore’s Law for human intelligence or ability. That is my concern. Not that we hit the Singularity and every human is unemployed and targeted for termination, but that the gradual change in the economy means few jobs for people on left side of the Bell Curve. We’ll have a growing cadre of people permanently unemployable no matter how great the stock market is doing or how much increase in GDP there is.

After watching this video, I had more questions than answers from it.  Frankly I don’t know what to do about the problem of people being rendered permanently unemployable.  Maybe someone should make an app for that…