In my last post we introduced the disturbing CNN article, “Are Jobs Obsolete?,” and discussed how the premise that most Americans don’t need to work would negatively impact individuals’ happiness and self-esteem.  Now, in the second of a three-part blog series on entitlement in society, we’ll discuss why making jobs obsolete would stunt our country’s growth.

The article makes an erroneous argument about how increased technology, automation and efficiency kills jobs. During the Industrial Revolution, machines were supposed to eliminate all laborers and the tractor was supposed to eliminate farm workers.  Yet it didn’t happen and unemployment was below 5% almost 100 years after these innovations. Why weren’t more jobs eliminated?

Here’s why. Automation and efficiency may eliminate jobs in the short-term, but they increase jobs in the long-term.

Imagine a car company that automates some jobs with a new robot.  Some factory line workers are no longer needed and they lose their jobs.  The company has now produced their product for less.  They can make the same amount of money, selling it cheaper than their competitors that did not automate.  The quality of the car is better because there is no human error; the car company sells more cars; more dealerships spring up; more salespeople are hired; more finance and accounting positions are filled; more factories are built; non-automated jobs in the factory increase; more robots are ordered; and more people are needed to build the robots. While employment drops slightly in the beginning, it then grows dramatically with the success of the company.  The money the consumer saves on the car helps buy other items, employs people at those companies, or funds a home purchase. So while the “exact job” may be eliminated, the “overall” number of jobs increases.

Now, let’s look at the company that did not automate.  They had more people employed in the beginning, but soon their costs were too high and their quality was too low.  They started losing sales to competitors.  They have to close factories and dealerships.  More and more people lose their jobs.

This is not just a company vs. company idea either.  This is a global economy.  If a company in China is automating their process to undercut our price or improve the quality, we must also automate and protect our jobs. 

Ultimately, encouraging a non-working society reduces individual happiness, stunts our growth and global competitiveness, and lowers the quality of life for everyone – which will be the topic of the third blog in this three-part series.