It's Worse Than You Think: or why you should care about poverty, jobs and income inequality


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[Row of Unemployed from Flickr Commons]

I'm afraid. Truly. I'm afraid of where we're headed.

We live in a world where the basic storyline goes something like this: we are born, we get educated, we go to work, we earn money, we buy a house and get hitched and have babies who are educated...and the cycle goes on. Of course this story varies in order, magnitude and timeline, but you get the drift. We get trained and then we work so we can afford to do it all over again generation after generation.

It's always seemed to me an odd way to exist, but it works well enough and there have been loads of benefits to this structure, including advances in our technology and comfort in general. The market that we work for and buy from gets more efficient and produces better and better outcomes for us. The incentive is comfier living, through income or better/cheaper stuff or whatever, but I certainly appreciate typing on this laptop while sitting in a warm office and having the ability to publish this for the masses to read. I have a comfy chair and a good cup of hot coffee while the winter elements whip around outside without touching me. Life is good.

povertyline
povertyline

And yes, I have Capitalism and the free market to thank for my good life. But there is no escaping it. We need to work to afford such luxuries. If I didn't have an income, I wouldn't have all of this. And I suppose I could eschew my current lifestyle and take to the land, but I don't really have the skills to snare rabbits and pick the right berries. I took a survival course when I was 14 that my parents teased me about (they called it "Camp Two Fingers" because I described the limited amount of food I could eat each meal - a two-fingered scoop), but I don't remember much of that. And I've been watching the AMC series The Walking Dead and took the 'How long would you survive' quiz and didn't do so well.Also, I like my laptop and wi-fi and power and heat. I'm quite fond of the ease of life I lead, so I'm willing to pay the piper.

But the story is getting harder and harder for more and more people to follow. The piper has more and more limited space. And we're going to have to write a new one if we want to survive.

DETROIT IS OUR CANARY IN OUR COAL MINE

We are nearing a job crisis of mundane proportions. As Chrystia Freeland outlines in her 2013 TED Global talk, The Rise of the New Global Super-Rich(I know, the irony, right?):

Since the late 1990s, increases in productivity have been decoupled from increases in wages and employment. That means that our countries are getting richer, our companies are getting more efficient, but we're not creating more jobs and we're not paying people, as a whole, more.

During the Industrial Revolution, jobs were created on a massive scale, moving the majority of people into cities to fill positions. But since then, globalization has happened, moving hundreds of thousands of jobs overseas to cut costs, displacing an enormous number of jobs. We've seen the effects this has on cities built around industries who now outsource like Detroit and Baltimore. But what happens when the skilled labor is outsourced? What happens when we don't even need people to do the job AT ALL?

Self-driving vehicles, artificial intelligent computers that may teach themselves to code, robots that do intricate tasks and smart homes that monitor and fix themselves are just some of the technology that is right around the corner and threatens unskilled AND skilled labor. Why outsource your coders when the computer can do it for you? Who will need cars at all? Forget mass transit. Seamstresses and tailors? Meh. Cooks? Who needs them. Plumbers? Electricians? The list goes on.

In fact, even the people who are BEHIND the technology that is leading us there are afraid of where this is headed:

Eric Schmidt, executive chairman of Google – a company that is working on emerging technologies such as self-driving cars and robots – is worried. “The race is between computers and people and the people need to win ... In this fight, it is very important that we find the things that humans are really good at,” he said. - FT.com, Automation and the Threat to Jobs, January 26, 2014

Sure, every advancement creates a new job and new opportunities to earn, but are the number of jobs and opportunities created enough to replace the ones lost? Are there? Because if there aren't enough new jobs to replace the lost jobs, no matter how much you berate the unemployed for being lazy jerks, there won't be jobs for them to go to. And the time period between unemployed and homelessness will be swift as the number of people living paycheck to paycheck (68% in USA alone) and buried in personal debt is staggering.

I wouldn't be so afraid if there was some sort of plan in place. If this was something we talked about openly and honestly and that economists were discussing in a public forum. But it's really difficult to find anyone talking about this except for a smattering of people here and there who are largely dismissed as paranoid and overreactive.

As an interesting aside, after watching Freeland's TED talk, I went to check out the numbers of people employed by the tech companies we know and love (these are worldwide numbers for the most part):

Amazon - 109,800 ($183B market cap) Microsoft - 100,500 ($305B market cap) Apple - 80,300 ($450B market cap) Google - 46,400 ($380B market cap) Yahoo! - 11,700 ($35B market cap) Facebook - 5,800 ($150B market cap) LinkedIN - 4,800 ($25B market cap) Twitter - 2,300 ($34B market cap)

TOTAL - 361,600 jobs

To put this in a bit of perspective, here are the headcounts for the 8  biggest employers in the US:

Wal-mart - 2,200,000 ($242B market cap) IBM - 435,000 ($192B market cap) McDonald's - 400,000 ($93B market cap) UPS - 400,000 ($89B market cap) Target - 355,000 ($36B market cap) Kroger - 338,000 ($18B market cap) Sears - 312,000 ($4B market cap) General Electric - 287,000 ($25B market cap)

Total - 4,327,000 jobs

Notice something about many of the employers on this list? Many of them hire part-time, minimum wage employees (the working poor), some of them hire unskilled labor (the automate-able - I can see the day when our Big Macs are assembled by robots, can't you?) and some of them are in trouble (Sears anyone?). Here is something to chew on: Target employs roughly the same number of people who Amazon, Microsoft, Apple, Google, Yahoo!, Facebook, LinkedIN and Twitter do COMBINED.

And if you don't understand the connection, the reason why I'm showing the largest employers is that many of them are retailers whose retail outlets are being threatened by technology - when retail outlets get shut down because people are ordering more and more online (just today, Radio Shack announced the closing of 500 stores), where are the new jobs being created to replace them? Certainly not with the new entrants.

[NOTE: Knowing how damned frustrating it is to get support at any of the tech companies listed (even the Genius Bar is backed up for days now and they direct you to the forums), I have some suggestions of where they could hire a few bodies. Am I right?]

THE GOOGLE BUS THING ISN'T REALLY ABOUT THE BUSES

It's about this. It's just a symbol of a much deeper issue. The Bay Area, is the next canary. It's awesome because people are finally taking income inequality seriously...and it's dislodging many heads from many a$$es.

DON'T JUST POINT FINGERS AT THE PLUTOCRATS - YOU ARE TO BLAME, TOO

As consumers, we should take on a big part of the blame here, too. It's not just companies trying to be more efficient and maximize profits. It's also our appetite for a 'deal' and our move to shopping online and on our mobile phones. As we demand lower costs and convenience, we force more human beings out of a livelihood. Hell, I love my Joe Fresh deals, but when the factory collapsed in Bangladesh last spring, I realized what my hunger for good deals was doing to the world. I'm making more of an effort to shop local now and when I get a hankering for some online shopping, I head to Etsy first.

And what about startups like Etsy and Shopify and Chloe + Isabel and all of the other peer-to-peer and home-based business boosting tools that are launching? Isn't there all sorts of money being poured into these pretty commonplace tools to help people grow their own businesses, releasing them from the shackles of traditional employment?

Sure. But just like their analog ancestors (Avon, Amway, Mary Kay and Tupperware to name a few), there will be only so many successful people in each neighborhood. For instance, I live in a pretty tight neighborhood (roughly 15,000 people and we all have dogs so we talk). If EVERYONE in my neighborhood bought $50 worth of Tupperware per MONTH, that would only cover costs of living in this neighborhood ($60k/yr) for 38 people (25% commission based). And that's being generous. NOBODY needs $50 worth of Tupperware a month. Here is a real stat: 65% of Etsy sellers made less than $100 last year. And as a big fan of Etsy, I know for a fact that these sellers are often barely covering the costs of their supplies. They try to remain competitive so they don't pay themselves very much.

Building a business online is the same as building a brick and mortar business. You need buyers. And with buyers going for the cheap and convenient options, there isn't much space for the artisan or hand-crafter. As a friend of mine said, "There is only so much jewelry I can buy!" when referring to Chloe + Isabel.

And speaking of buyers, what happens when unemployment soars? There will be even fewer buyers, which means ANY business trying to make ends meet is going to struggle, which will most likely lead to more layoffs, which will...well you know where this spiral leads.

SO ARE WE EFFED?

Well, if we keep burying our heads in the sand and moving in the general direction we're moving, yes. We're completely effed. Marketing, which happens to be the profession I've made a living at for 15 years now, is a BS job. I can completely admit to that. It's completely necessary in a Capitalist free market economy - because there is a confusing amount of options for customers and somebody needs to point them in the direction of your option - but in the automation and AI boom, it'll be made irrelevant.

In fact, many of the tech giants have already eliminated the marketer's role. Does Google hire marketers? Nope. Sales people and engineers. There are a few 'advocates' and 'futurists', but that's not the same. Does Facebook? Not really. Some people have the title of marketing, but they're role is more sales-driven, too. Microsoft and Amazon have fairly healthy marketing departments, but there are only so many jobs to go around there. Besides, once Google automates it for us (along with those engineering jobs), everybody will follow.

I know I'm a big downer. Sorry. If it makes you feel any better, this whole mess is still a few decades off. The singularity isn't supposed to hit until 2029. (Oh, which also reminds me that the person who invented the idea of singularity is...an employee of Google. Coincidence? You make the call.)

Truthfully, we need to rethink our economy altogether. Maybe the future of work is different? Maybe we don't work for a living anymore? Maybe we actually work on what makes us passionate without pay because we get a stipend? Or we don't need money anymore? Maybe there are different incentives? There are lots of people who have been rethinkingmoney for years and there is even a great crowdsourced currency contender (say that 10x fast!). Today's dollars are really only real because we think they are real. Sort of like Tinkerbell, if we stop believing it's real, it will cease to exist. (This concept has always fascinated me - since I studied the Brazilian Real Crisis in the 90's)

I had a conversation lately with my brilliant friend Heather, who said she read and watched The Hunger Games and didn't feel it was fictional at all. I agree with her. There are all of these showy excesses being waved around arrogantly while so many struggle. There is fear and awe now, but all we need is a Katniss to start the uprisings. I feel for Tom Perkins because, even though his Nazi Germany comparison is incredibly offensive, the Plutocrats are in danger. When wealth inequality is put under a microscope, it will affect him deeply. In actuality, he should have used the French Revolution as the example. But he wouldn't because many still uphold the French Revolution as a necessary balancing of power during a time of...great inequality.

Maybe there are think tanks and groups of people locked up in important secret boardrooms (beyond the lip service of Davos) coming up with awesome ideas. But seriously, folks. This is going to be big. And we can put it off and put it off, but at some point, it's going to catch up with us.

There are so many people out of touch with reality and though we shouldn't live with a cloud over our existence either, we really really need to think practically about our future. The higher we climb, the further we fall. Let's figure out how to prevent free fall in the future.

Let's not wait for those in power to come up with a solution...or we may be sending our children to a fight to the death arena in the near future.

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I've taken over the Fuck Poverty Facebook Page to share articles and continue this conversation. It's not much, but it's a start. Any additional suggestions, input, etc is very welcome. I've been thinking about this subject a LOT lately. I think the time is ripe for making it a priority.

I'm also reading The Lights in the Tunnel, recommended by my friend and associate, Lane Becker. Everyone should read it. It's awesome and covers stuff I said here with better examples, data and clarity. ;)

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