On the Road

I spent a good part of the week traveling—in fact that goes for the month too. I find myself more in Europe and North America, and not so much in other parts of the world.

Maybe the skills Europe offers are less appealing now to emerging nations—of course it could just be me.

On my journey, a zip tag on my bag snapped. Those double zip locks are designed to be pulled apart, so the tagless one wouldn’t budge. What better remedy than a paper clip?

I asked at a bunch of places in Heathrow but no one uses clips any more—harder to find than a pauper in Davos. Actually, it’s getting harder to find people at all, as machines inexorably replace them.

Most convenience stores in the UK have almost no staff. I bought a copy of Private Eye at Edinburgh airport, and the machine refused to process my boarding card—understandable, since I was landing, not leaving. I was stuck, waiting for change, in a Mexican standoff with a piece of plastic and silicon junk.

One suitably harassed young girl was running around helping all the equally harassed customers deal with the machines. She was clearly a Scottish cyborg, and practically shouted at me while muttering incomprehensible brogue and stabbing illuminati codes into the keypad.

As I walked away, I felt both amazed and sorry for the eighteen-year old, a silly girl with no future defending her right to be fired by machines.

The hourglass economy is in full swing, but apparently it’s getting bottom-heavy (for the UK in particular), as you can see from the chart below, taken from an excellent article in the FT. In the graphic you see three horizontal bars for each nation (I recolored one for clarity). Each bar shows the percentage change in a class of employment: light blue is the bad stuff, the bottom of the hourglass (think McDonalds), red are the middle segment jobs, that used to keep the economy oval in shape, and dark blue are the top end jobs (think Davos).

The Hourglass economy: welcome to the West.

The Hourglass economy: welcome to the West.

This picture is fascinating—it shows the systematic disappearance of the middle class, explains why there is such a huge gap in wealth, and why that gap can’t fail to increase.

Computers and robots have destroyed the oval, and the corresponding wealth slice has shifted up and down. The upper part grabbed all the investment required to expand design and manufacture of the machines that replace us—those numbers are huge, and far exceed the investment in people for a period of time. However, in a few years, the return on this investment begins to bear fruit.

It bears three types of fruit: increased revenue streams to big corporations, reduced revenue streams to humans in that oval space, and more low-paying jobs. The last category can be split into caretakers of machines, and a range of other shitty jobs machines can’t do, such as flipping burgers.

The removal of that oval has two societal consequences: unemployment and sub-employment, as some jobs disappear or shift rapidly to the lower end, and increased state obligations to deal with the problems created at the corporate level by cutting labor costs.

Of course for classic market economics productivity increases, as less people produce more. The question is whether in this new model that is a meaningful indicator.

When we look at this chart by country, only Italy did ok. But er… what period do these data represent? The cutoff is 2008, the Age of Lehman. I bet you these images look oh so much worse in 2015—and I’d love to see the U.S. data.

As all this goes on, the tv is stuffed with images of Davos. Through the years, I’ve found this particular forum a total non-event, and this year it looks even more profligate and futile than usual.

It annoys me intensely that everything seems to take place outside, so everyone can show off their executive winterwear. WTF is wrong with indoors? Will people think you’re in Milton Keynes?

The stuff I hear this year is even more disconnected from the real Europe. Contrast that with the hopeful crowds surrounding Sexy Alex and his band of merry men. I’m not sure what lesson Greece will teach the world tomorrow, just as I am completely sure that Syriza’s policies will not solve the problems Greece faces. Grexit or not, tough times lie ahead.

The middle class is gone, and the oval office has become an hourglass room.

No wonder it’s hard to find a paper clip.

Atmos Fear and The India Road. Quick links for smartphones.

Atmos Fear and The India Road. Quick links for tablets and phones.


One Response to “On the Road”

  1. Louisa Smith Says:

    I loved this post! It highlights some very interesting points about the way our economies are shifting. Just great!

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