Unemployed? Davos worries you’ll riot

At Davos, they're worried that these guys could get angry. So why not just send them to Caltech? Photo: aflcio via Flickr.

Do global elites gathered in Davos this week fear that armies of unemployed workers, especially youth, could turn into angry mobs that destabilize the world’s industrialized nations? A new video suggests that the rich and comfortable are concerned about the jobless and desperate.

“The West isn’t Working: The CNBC Debate,” presented at the beginning of a panel on global unemployment at the conference this week, hits just the right note on the jobs crisis in Western nations. A dark soundtrack and ominous images of people rioting in the streets underline that too many people out of work today is dangerous for our societies.

In the US alone, 10% of workers are officially unemployed and perhaps double that number have dropped out of the statistics or are scraping by with part-time work. Here, the unemployment crisis is feeling more and more like the worst of the 1930s. In Europe, with its national debt defaults and government cutbacks, the situation appears little better.

The West is already facing Depression-Era levels of discontent and lack of consumer confidence. Could these spiral out into civil unrest, extreme political movements and the rise of demagogues reminiscent of the Communism and Fascism of yore?

As one expert in the film says:

If we do create a world in which there are millions and millions of people without hope and without a job, that will eventually boil over. And I think that’s the real doomsday scenario.

Ariana Huffington, who is at Davos this week, said she’d like to lock every member of Congress in their office and make them watch this video every morning until unemployment reached pre-recession levels. That’s not a bad idea. Even though I’m not sure how much Washington can to do create jobs without reversing 20 years of free-trade policy, I’d like to see them try much harder.

So pulling Congress’s attention away from its usual solicitude for what big corporations want and putting it on what American families need couldn’t hurt for a few minutes a day.

But Washington also needs to be reminded of America’s longer-term problem, and the likely root cause of today’s unemployment: energy depletion.

More engineering graduates won’t fill our gas tanks

I part ways with CNBC when the video suggests that the problem is young people who aren’t prepared to sufficiently hustle in today’s job market and in particular, young people who aren’t interested enough in science and engineering.

For years, we’ve heard about America’s alleged technology-education gap with other nations. I didn’t buy it then, as American jobs fled for cheap labor in Mexico and Asia. Now, it’s even less convincing that we know the world has passed peak oil and possibly reached an insurmountable barrier to future economic growth.

Those of us who understand the consequences of peak oil will be dubious that getting more young people into science and engineering is any kind of long-term solution. The economy will probably still need technology of some kind, but it’s likely to be much less high-tech than today.

Even in the short term, graduating more techies isn’t going to help America much to compete with fast-growing Asian economies, most of whose miracle economies still largely rely on cheap labor.

At some point as energy prices increase, cheap labor won’t be worth it. Once the minimum wage in Shenzhen or Chennai rises even to 25% or 50% of what companies have to pay comparable workers in the US, transportation costs are likely to eat up any savings on labor.

Reversing globalization

That’s the whole idea behind re-localizing economies, whether through the Transition movement or in other ways. Distance costs money. And once the cost of distance passes a certain tipping point, our jobs and factories will start to return to us from Asia. At Davos, they still believe in an unending future of more globalization. But we know better.

Let’s just hope the US will still have any kind of economy left when we can no longer afford to have things shipped across the Pacific and we have to make them in the USA or just plain do without.

So, rather than rooting for Caltech, I’m rooting for the Alliance for American Manufacturing.

What we need in this Great Recession is not more jobs for a few elite nuclear engineers or nano-technologists. We need more good jobs for ordinary people both today and in the lower-tech economy of tomorrow.

Watch the “The West isn’t Working: The CNBC Debate,” here.

– Erik Curren