Where are the High Paying Jobs?

January 5, 2007 · Posted in economics, innovation · Comment 

The big complaint in all the industrialized nations is they’re losing high paying jobs. But where are those jobs going? The quick response is the high paying jobs are going overseas or foreigners are coming in and “stealing” jobs. This is an easy explanation but it’s totally false.

High paying jobs aren’t moving overseas or somehow being stolen. The high paying jobs are gone. No one is getting the old high paying jobs, those jobs don’t exist.

There is a fundamental rule of human nature. We always want More, Better, For Less, with Less Hassle. That continuous drive to get more for less has caused tremendous increases in productivity. 100 years ago it took thousands of people to do what one person does today.

As recently as 50 years ago telephone companies had operators manually connecting calls. This person’s job was to plug wires on a board of connectors to make the connection between telephones. It could take 15 minutes for a call to be connected across the country. Today a device that costs $100 can make thousands of connections a second. Only a few years ago telephone companies charged extra for long distance calls. Today almost every cellular plan offers free long distance.

The job of telephone operator wasn’t stolen, or shipped overseas. That job is gone. If someone did want to do that job today they wouldn’t get paid very much. Plugging and unplugging wires isn’t valuable. No one wants to pay for a manual telephone operator.

The creation of automated switches led to new high paying jobs managing the switches. As the switches became more reliable and easier to manage even those jobs went away. Now one person can manage thousands of switches that connect thousands of calls every second. Today one person can do the work of millions. That one person does have a high paying job. But that will go away as well. It will get easier and easier to do the job and it won’t require special training.

I don’t think anyone wants people to spend all day unplugging and plugging in wires to connect telephone calls. I don’t think anyone wants to go back to paying for long distance either.

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