Column: Energy, Employment and Economic Growth

LONDON (Reuters) – Economic, social and political upheaval resulting from the decline of traditional manual jobs in the manufacturing, extractive industries and distribution sectors is worrying policy makers in advanced economies.

Globalization, trade, migration, the rise of the Internet and the advent of artificial intelligence / robotization have all been blamed for the detrimental impact on those who live by manual labor.

In reality, the loss of manual jobs is the continuation of a trend dating back more than 200 years that has gradually replaced physical jobs in agriculture, mining and manufacturing with jobs in the country. service sector.

The relatively rapid evolution of employment, energy consumption and industrial structures has been both the driving force and the result of the economic growth of the past two centuries.

Returning to the security and stability of employment in the world before 1800, would imply a return to its more stagnant economy.

For policymakers, the challenge is to manage the transition costs for the most affected communities – not to stop the changes altogether.

ENERGY AND WORK

The economic growth of the last two centuries has been propelled by the evolution of technology, organization, and intellectual capital, but it can be argued that the fundamental factor has been a considerable increase in the availability and availability of technology. The use of energy, initially derived from fossil fuels and, more recently, from renewable sources.

Until 1800, almost all of the energy used in the economy for food production, manufacturing and transportation was provided by human and animal muscles, supplemented by small amounts of energy. 39 energy captured by wind and water mills.

Since then, mechanization and automation have multiplied, replacing human and animal labor with mechanical energy fueled by coal, oil, gas, nuclear energy and, now, renewable energies.

The sharp acceleration of the economy and standard of living over the past 200 years has been dependent on an equally prodigious increase in energy capture and use, as well as the displacement of human and animal labor by machines.

On average, every inhabitant of North America and Western Europe consumes more than six times more energy than in 1800. Thanks to improvements in energy efficiency, social gains have been even greater.

With regard to the energy services provided, each inhabitant of the United Kingdom now enjoys 60 times more heating, 70 times more energy and 500 times more pbadenger transport than in 1800.

During this acceleration, tens of millions of manual jobs in the agriculture, mining and manufacturing sectors were eliminated and replaced by other jobs in the service sector.

In the United States, agriculture accounted for two-thirds of total employment in 1850, but that figure dropped to one-third in 1910, less than 10% in the 1950s, and less than 1% in the 2010s.

Employment in the manufacturing sector increased in the late 19th and early 20th centuries to 35% of the total in the 1950s and 1960s, but fell to less than 30% in the early 1980s and is now less than 15%.

Instead, the proportion of jobs in the service sector increased from 18% in 1850 to 50% in the 1950s and over 80% in the 2010s.

Mechanization and industrial development have reduced or eliminated tens of millions of mostly manual jobs over the last century, including several categories of jobs.

The labor force in the United States has doubled from 42 million in 1920 to 80 million in 1970, and almost doubled to 145 million in 2018.

But the number of workers employed in mines has increased from over 1.2 million in 1920 to less than 500,000 in 1970 and to less than 200,000 in 2018.

Agricultural employment fell from 11 million in 1920 to less than 4 million in 1970 and to less than 500,000 in 2018 ("Historical Statistics of the United States," Census Bureau, 1975).

Mechanization and improved energy capture have been at the root of the huge increase in productivity and economic opportunities, but mainly to the detriment of manual labor.

At the same time, tens of millions of new jobs, mostly unimaginable in 1970, not to mention the 1920s or 1870s, were created during the same period, mainly in the service sector.

VANISHED COMMUNITIES

Overall, mechanization and the increased use of new energies rather than manual labor have resulted in a considerable improvement in living standards, but the costs for subgroups affected by transitions have been intense.

Containerization transformed the global economy in the 1960s and 1970s, making long-distance shipping faster and cheaper, opening new markets and new consumption opportunities.

But it was a disaster for hundreds of thousands of long-established dockers in ports around the world.

Cranes and rider trucks handling shipping containers have eliminated tens of thousands of old manual work related to the manual loading and unloading of ships.

In New York, the number of hours worked by dockers fell by 90% between the mid-1960s and the mid-1970s in Manhattan and 60% in Brooklyn.

Outside the wharves, tens of thousands of additional jobs were lost in the transportation, distribution and manufacturing trades, while the flow of goods and supply chains shifted to new container ports in New Jersey.

"The decline in jobs has been reflected on the economy of New York City," wrote economist Marc Levinson in a story of containerization.

Poor immigrant communities who used unskilled manual labor were devastated by the establishment of an entirely new product distribution system.

In London, the same upheavals affected the dockside communities along the Thames, with freight being routed to the giant container terminals at Tilbury and then Felixstowe, which required far fewer workers.

The same pattern has been observed in port cities around the world: containerization has created a small number of skilled jobs, generally better paid, but has eliminated many more relatively unskilled manual jobs.

Strikes and mechanization agreements between employers and trade unions were aimed at slowing down the pace of change and providing some compensation to the workers concerned, with little success.

Containerization has left the riparian communities that have depended on a large number of jobs in shipyards, marked by social and economic problems for decades.

NOSTALGIA AND REACTION

Because of its concentrated impact on certain demographic groups and local communities, mechanization and the revolution in energy services have often provoked negative reactions.

Mid-career workers or those living in communities dominated by one industry may not have many opportunities to retrain and move to another form of employment without loss of income (or status). .

In Britain, hand-woven weavers destroyed new automated textile machines in the early decades of the 19th century (the Luddite movement), while farm workers destroyed threshing machines in 1830 (the Swing riots).

At about the same time, the introduction of sheep farming in the Scottish Highlands, an extension of the fence movement that suppressed rural employment in England for two centuries, displaced traditional farming communities and produced a similar violent response ( mbad emigration).

The rapid evolution of technology and the resulting displacement of workers have often generated a political reaction and a burning desire to return to an older, simpler and more prosperous age.

Something similar seems to be happening at the moment with an angry reaction against the trade, immigration and technological changes that seem to threaten the established employment patterns.

However, experience suggests that machine breaks, riots, strikes, protectionism, anti-immigration campaigns and nostalgia can not durably hinder long-term change in employment and energy patterns.

– The opinions expressed here are those of the author, a Reuters columnist –