Larry Herschel is an economist for the Department of Labor. He’s evidently balding but has shaved his head – an old-fashioned style these days – and wears a conservative business shirt and dark trousers. His analysis, though, is very current.
“Gu challenges most of our old working assumptions,” he says. “We’ve become well aware of that in the past 15 years. It seems like it’s been a lot longer than that – and at the same time, it seems like it’s all very recent. Well.
“The thing with Gu is, it makes the global labor market truly global. The services sector was well down that track already, anything you could do on a computer you could already do from nearly anywhere, but Guplicates accelerated and expanded it. Now I can’t think of any job that can’t potentially be done from a foreign country, and that has huge economic implications.”
“Because the unskilled are now competing against people living in countries with much cheaper living costs?” you ask.
“Absolutely, Susan. Supply and demand cuts in, and the supply of unskilled labor vastly outweighs the demand in western countries. The price can’t fall below the minimum wage, which is historically based on what it costs to live in the country where the work is performed, so what happens is that employers look for the workers who will work hardest and produce the best work. If you live in a poor country and you’re a good worker, that’s great news, because you’re being paid in hard currency and you can live well in your country on what would be barely subsistence in the country where the work is being performed. Typically, you share your good fortune in one way or another with the people around you – either you flat-out give them money or you buy their products and services – and your whole community prospers as a result. You haven’t had a polluting western factory built in your neighborhood, where you’ll work for a pittance while your children get cancer, either – which was the old model of global labor, or one face of it. Nor do you need to leave your home and your culture and your family and friends and go to a foreign country, live in a slum and claw your way up from the gutter. But on the other hand, nor do your kids get to go to a western school for free, or get western medical care paid for by the state, and grow up to be doctors or whatever. They get some benefits, but not all the benefits that immigrants traditionally have got after a generation or two.”
“So this has affected immigration, too.”
“Oh, very much so. Most western countries, of course, have only been dealing with mass immigration since the 70s, when cheap air travel became available, but America has always been a country of immigrants. We still do get them, but the proportion of poor economic migrants has dropped dramatically. What those people are mostly doing, if their country is livable at all, if it’s not so bad they have to flee into the orbital habitats, is staying there in their communities and working for the Yankee dollar. Which affects, of course, our balance of trade.”
“And taxes?”
“Well, taxes are a lot more complex. On the one hand, you aren’t paying for education and healthcare for a big immigrant population who themselves are not paying high taxes, or any taxes at all in some cases. On the other hand, you do tend to have high unemployment locally, which costs tax money, and has social costs as well, of course. There are a lot of unhappy people on unemployment, and unhappy people are unhealthy people, and are also more likely to do things you’d rather they wouldn’t, up to and including crime. So employers can end up paying two or three times over. They’re paying for someone from another country to work at a job. They’re paying, via taxes, for someone else in this country not to work at that job. And potentially they’re paying the cost of that person’s unhealthy life choices and/or criminal activity.”
“So why not employ local people?”
“Because the perception is that they just won’t work as hard. And if you think about it, their motivation is much lower. A local person can work at a minimum-wage job and be close to the bottom of the heap, just above the people who don’t have a job at all. But someone from, say, Gambia can work at the same job and be a big deal in their community, someone with a lot of money to splash around. Of course he works harder.”
“But the number of jobs isn’t just static, is it, Mr Herschel? New jobs, new job sectors, keep being created even while some of the old ones are reduced or destroyed.”
“Absolutely true, and an excellent point, Susan.” He gives you a slightly creepy look; perhaps he’s attracted to you. “The domestic service industry, for example. Hit its previous peak probably in the 19th century, when even quite a modest middle-class family could usually manage to afford a maid. The loss of population and the social changes following the world wars pretty much finished it off except for the very wealthy, and the history of late-20th-century technology was, from one point of view, the history of the development of labor-saving devices to replace the missing domestic servants. And now that pendulum is swinging again, and in three ways: One, domestic servants working via Gupe from their own countries; two, local people who would otherwise be unemployed and would rather be a domestic servant than nothing; and three, increasingly, domestic Gubots.”
“There’s a whole status hierarchy there, isn’t there?”
“There is. It goes: I have a Gubot, I am middle-class; I have a Gupie servant in the Philippines or wherever, I am upper-middle-class; I have live local servants, I am wealthy – though not necessarily as happy with their work.”
“And where does this leave, for example, young people who don’t yet have qualifications for a skilled position?”
“You’re feeding me my lines, Susan.” He definitely leers this time. “Yes, the traditional teenage job in fast food or such similar scut-work is fast disappearing. The employers had spent years breaking those jobs down into such repetitive, mindless parts that even a not-very-bright, not-very-motivated teenager could be trained to do them to a degree of effectiveness that usually stopped short of driving away your customers. Which, of course, makes them great candidates for automation. Food outlets with human servers are definitely in the premium tier these days. And, as you implied with your question, this leaves unqualified young people in a bind. Where are they going to make the money that they believe they need in order to become the consumers that they have been programmed to be? Surprisingly many of them have risen to the challenge by, in effect, joining the entertainment industry – which is what a lot of education these days is training you for, basically. They’ve learned creative skills, and they put those to work and find ways to generate money out of them. Some of them, sadly, end up in that sector of the entertainment industry which never fails to make money even in the hardest times – pornography and prostitution, though often called by various other names. And if you’re neither creative nor attractive, crime is always a thriving industry and always needs disposable runners, fighters and similar dupes. But the bright student whose abilities lean towards the scientific and who has some moral scruples is left in a spot, all right, unless they have at least some minimal skill at teaching and can tutor those less bright or less advanced than themselves. A physicist, say, or a mathematician is unlikely to be employable for much until they’re in their mid-twenties and are half-dead from ramen noodle poisoning and damp, roach-infested apartments.”
“You’re dramatizing a bit, aren’t you, Mr Herschel?”
“Larry. Well, yes, a little, but – that’s the thing with change. It’s dramatic, it affects people in powerful ways, unpredictable ways largely, and those who can’t adapt go under. It’s not always very pretty to watch, and part of what I’m supposed to do here is predict the unpredictable so we can do our best to prevent the unpreventable, or at least slow it down enough for people to be able to deal with it.”
“Because the real cost of living has gone down, hasn’t it?”
“The real dollar cost, yes, despite climate change and all the rest of it; so far our technology is staying ahead of the disaster curve, solving slightly more problems than it creates. Yes, you can live reasonably well now on unemployment, looked at purely from a financial angle. It’s still not a life I’d envy at all. It doesn’t hold out a lot of hope, and the most recent of the economic migrants are probably the worst affected. Some of them are going back now, if they have a country to go back to, re-emigrating, uprooting themselves yet again, dragging their kids kicking and screaming back to the third world in the hopes of building a better life.”
Mike Reeves-McMillan lives in Auckland, New Zealand, the setting of his Auckland Allies contemporary urban fantasy series; and also in his head, where the weather is more reliable, and there are a lot more wizards. He also writes the Gryphon Clerks series (steampunk/magepunk), the Hand of the Trickster series (sword-and-sorcery heist capers), and short stories which have appeared in venues such as Compelling Science Fiction and Cosmic Roots and Eldritch Shores.
I live in New Zealand, but much of my work is done for Australian companies from my office in the basement of my home. Even without really decent broadband, this is already possible. Today’s post is just… an extrapolation of that.