A version of this essay was published as part of my monthly newsletter several weeks back. Find other archives and join here to get updates like this first.
Economists love to review our decisions through the lens of opportunity costs. Each decision we make has the added cost of that which we did not do.
When a big box-store clerk, paid hourly, volunteers to leave her shift early because foot traffic is particularly slow, she’s making a choice. She values what she does with that time more than the wage she would have earned.
When an influential academic, evaluated by her published research, agrees to take on another young mentee, she’s making a choice. She values that relationship and the person’s development more than what she perceives to be the potential career gains she could have developed with more time in the lab.
I wrestle with this paradigm more often than I might want to admit.
Since my undergrad years, I’ve taken an interest in the pop science of behavioral economics. From books and articles and podcasts aplenty, I’ve found the shallow edges of the social science quite helpful for my worldview. (I also book a second-hand microeconomics textbook and dug in.)
The clearest result of that has been an entire set of familiar terms that help explain the world. These phrases have been valuable to me. I’d like to share them with you.
Updated with more perspective on the job-crashing Internet here and more from Vox Media here. Also, though some think there is a mighty economic transition happening, many readers and friends have pointed that I didn’t properly address the ‘lump labor fallacy‘ here, in which I incorrectly assume there is a static number of jobs that are going away. I still think there is perspective worth sharing below. More comments welcome.
In the next 20 years, the United States and the broader global economy will either dramatically rethink its employment structure or a history-altering societal change will take place.
Of course, unemployment numbers are gamed by those who give up on looking for jobs, but the idea here is that it’s hard to understand why anyone seems to think that the overall unemployment numbers for our country will trend anywhere but upward.
Let me be clear, this is armchair commentary from someone with absolutely no background in economics or geopolitical, socioeconomic trends, so I am writing this hoping for outside insight because I can’t figure this out.
Below, I (a) outline the problem as I see it, (b) look at big economic drivers that seem to be chances for more problems, (c) list all the opportunities I understand that could reverse somewhat this trend and then (d) highlight some of the transformational changes that could lie in wait for the next generation, before offering some more reading and then waiting to get yelled at in the comments.