I have been reading about the concept of a ‘jobless recovery’, a term economists use to describe when employment is falling or stagnant even when the economy is growing, especially after the official end of a recession.

Why would this happen? Wikipedia suggests that increased productivity, automation, and workers switching industries might all be part of the reason.

I’ve made a simple model I think might be a starting point for explaining how employment might keep falling even as the econom grows.

Let’s say that people buy 1000 of some item each year (skyscrapers or supercars or something) and it takes 1000 people to make these 1000 things. Then a recession hits and sales drop to 200 per year, stays low for a while and then begins growing again.

Let’s also assume that the labor market is not very flexible: when sales drop, people are let go slowly. This is true in industries where labor does not make up much of the price of the finished items.

In this model, the number of people hired or let go each year is simply 20% of the difference between the Sales rate (which is also the normal number of people needed to make that number of items) and the current employment level. So, when there are 1000 people employed in the industry and sales drop from 1000 to 200, then 20% of (1000 – 200), or 20% of 800, or 128 people will be let go.

The graph below shows what happens to the level of employment as the sales drop, stay low for a year, and then slowly recover. Because there are initially too many workers for the level of sales, the number of workers begins falling. As the economy begins to recover, the employment rate keeps falling (because there are still too many workers for the sales level), eventually stagnating, and then beginning to grow again.

The green shaded region on the graph shows the ‘jobless recovery’, the time during which employment is still falling even though sales are growing again.

This article from a few years ago in the Washington Post, ‘Jobless recoveries are here to stay, economists say, but it’s a mystery why’ asks the related question of why jobless recoveries are lasting longer and longer after each recession.

I hope my model offers some insight into both of these questions: Because sales can drop and pick up faster than people can find or lose work, there is a delay in the system and therefore we can have times when employment is falling even though the economy is growing again. And, if labor is becoming less and less of the final cost of a product, then the 20% factor in the model might become less over time, making the jobless recovery time get longer and longer.


Work in Progress: sterling silver matchbox holder (80 g), pictured with two paper prototypes. The original design was a box with a removable lid and handle made from four silver bars. The current design incorporates a hinge I practiced making in the earlier triangle pendant project. I still have not settled on a design for the handle (or latch or other closing mechanism) for the current box.

A sterling silver pendant, made from two triangular pieces joined with a hinge.

A 9 karat gold ring for a child

Below is a similar ring I saw in a museum, made somewhere between 550-1050 AD.

Regarding the first commercial production of his ‘horseless carriage’, Henry Ford supposedly said: “If I had asked people what they wanted, they would have said faster horses.”

(Ford apparently never said that, but even so it’s still a good quote.)

I made this graph below from an article I saw at Wikipedia. It shows the size of largest container ship in the world, in terms of the number of twenty-foot equivalent units (TEUs) it can carry, as a function of the year the ship was launched.

There is one ship, the Emma Mærsk, launched in 2006 with a capacity of just over 15000 TEUs, that stands out from the rest. But otherwise, the data points all seem to fall along a path that generally rises over time. Maybe the path is S-shaped and it seems like the three record-setters launched in 2017, the OOCL Hong Kong, the Madrid Mærsk, and the MOL Triumph, all with capacities greater than 20000 TEUs are nearing the size of the largest container ships that will ever get built.

These ships are monsters – early 400 meters (a quarter of a mile) long and over 16 meters (50 feet) at their deepest. This is twice the size of the largest ships in 2005. I am asking myself: Is this the logical endgame in the shipping industry? Just build a new largest ship, 1000 TEUs larger than last year’s largest, every year forever?

To me, it feels like ‘bigger ships’ is the shipping industry’s equivalent of ‘faster horses’. Maybe we will keep building ever larger ships. Or maybe 3D-printing will allow individuals, small companies or large companies, to make goods in Europe and the US that are now being made in China.

I have been seeing a lot of articles recently about innovations that seem to me to be ‘faster horses’ in agriculture, transportation, electricity and other areas.

Like ships, like largest passenger planes keep getting larger and the longest regular commercial routes keep getting longer. In 2001, Continental Airlines ran a 16-hour flight from Newark to Hong Kong. In 2004, Singapore Airlines flew an 18-hour flight from Newark to Singapore. In 2016, according to the BBC, a flight from Dubai to Auckland, New Zealand, had a scheduled duration of 17 hours 15 minutes. And a planned route from Dubai to Panama City will have a duration of over 17 and a half hours.

Again, ‘longer flights’ feels like ‘faster horses’. Will we still be flying commercial aircraft 500 years from now?

SpaceX is building a rocket that can hold a couple of hundred people and fly from New York to London in less than 30 minutes. They say it should be able to go from any point on Earth to any other in under an hour. Autonomous electric vehicles (AEVs) could replace short-haul flights. That feels more like the horseless carriage compared to the airline industry’s plans for larger planes, small supersonic craft, and longer routes.

Don’t worry about the timeframe – Just ask yourself what is the most logical endpoint, maybe 200 or 500 or 1000 years from now.

For energy, the most logical endpoints I see are solar power or fusion. In 1000 years (or sooner) we will have used up all of the oil, coal and natural gas. In 1000 years, we could also use up all of the uranium for fission. But in 1000 years the Sun will still be shining.

I have seen some articles recently saying that to accomodate more electric vehicles, we need to increase the capacity of electrical supergrids (the large trunk lines that form the backbone of the national-scale energy system). But the more energy we get from solar power, the less we will need giant electricity transmission and distribution infrastructure.

I have seen videos on YouTube of ‘exoskeletons’ – robotic suits that construction workers can wear to assist in lifting heavy weights and moving things. Here’s an article about big mining companies using sensor-equipped hats and helmets to detect fatigue among their vehicle drivers. Won’t these ideas just get wiped out by self-operating construction vehicles and humanoid robots?

I guess all technologies are transitional, and therefore exoskeletons and brain-wave helmets could be useful for a while until the robots arrive. But with technological change getting faster and faster, doesn’t it just make sense to spare the horses and hop on board the new ride?

Back when I was about 13 and the Soviet Union still existed, my social studies textbook contained a photo from a supermarket somewhere in Russia.

I think back about it every now and then. If I recall right, it was a black and white photo down a row of shelves that were almost empty except for a roll of toilet paper. Two women were standing separately in the aisle, each of them looking at that single toilet paper roll.

I realize that a photo is just a moment in time and maybe those women only looked at that roll for a second. But spine of my book had cracked so that basically every time I opened the book, it opened first to that photo. All year long, every time I opened the book, there were the same two women looking at that same roll of toilet paper, never finally deciding whether to buy it or not.

I guess what has stayed with me all these years about that photo is that, at the time, we were told that the Soviet Union was the world’s only other superpower besides the US. (They had beaten us into space!) And here with a basic staple item that is not particularly difficult to manufacture, transport or store, and that does not spoil, the Soviets forced to ladies to stand there, staring at a single roll of toilet paper forever.

Next Page »