Robots Help Manufacturing Recover Without Adding Jobs 559
kkleiner writes "For the last 30 years, automation has enabled U.S. manufacturing output to increase and lift profits without having to add any traditional jobs. Now, in the last decade, nearly a third of manufacturing jobs are gone. As manufacturing goes the way of agriculture, the job market must shift into new types of work lest mass technological unemployment and civil unrest overtake these beneficial gains."
why (Score:3, Insightful)
why does the job market have to switch into new areas to avoid unrest? why can't we just accept that 10x productivity means that only 10% of the people actually need to do something to maintain our civilization's standard of living?
work is not virtuous. work sucks and it's something we've been doing our best to eliminate for hundreds of years. why are we so afraid of that actually happening?
Re:What year is this? (Score:5, Insightful)
These exact same fears were written about in 1880. Every wave of automation works the same way - as costs fall, people can buy stuff (or services) they couldn't before, and different industries need more workers.
I suspect semi-skilled work will still be around for my lifetime, just more personal services and less manufacturing or paper-shuffling.
mass unemployment due to policies, not automation (Score:5, Insightful)
Assume you have an economy consisting entirely of factory workers. Now, half the work gets automated. What happens? Everybody can continue to live at the same standard of living but work only half as much, or half of the people can be unemployed while the other half work full time and pay half their salary to support the unemployed. Which future we get depends entirely on the policies we adopt. Unfortunately, policies intended to help workers and help the unemployed are increasingly looking like they are bringing about the second of these futures.
Re:What year is this? (Score:5, Insightful)
We already know the outcome.
Are you sure about that? I'm not advocating doom-and-gloom, but at the same time, the "don't bother worrying about it, it's always worked out in the past" optimism doesn't seem appropriate, either. I'd sure like something more solid than "past performance does predict future performance," which I think is just plain wrong in this context.
Other than trading (Score:4, Insightful)
why are we so afraid of that actually happening?
Because people still need to obtain food and shelter somehow in order to survive. How do you recommend that people obtain necessities without trading for them?
Re:why (Score:5, Insightful)
why does the job market have to switch into new areas to avoid unrest?
Because the silly engineers forgot to invent riot police robots before they invented factory manufacturing robots.
why can't we just accept that 10x productivity means that only 10% of the people actually need to do something to maintain our civilization's standard of living?
That would be un-American. Clearly, you can't have people living off someone else's work, even though that someone else is a machine, because...quick, help me someone here!
Re:What year is this? (Score:4, Insightful)
These exact same fears were written about in 1980. There was a famous BBC TV programme about how robots and microprocessors would replace everyone.
We already know the outcome.
Also back in 1980, middle class income people were able to purchase houses in places which nowadays they cannot.
Re:What year is this? (Score:5, Insightful)
Yes and those fears were justified. The median worker's income has stagnated or declined in the US over the past 30 years. It's been hidden by the rise of the two income household and technological improvements in some classes of goods, so it's not obvious, but it's true. People are being driven into the few industries where automation hasn't yet been a major factor healthcare and education, but there's no reason to believe those fields will be immune forever.
Re:Other than trading (Score:5, Insightful)
Socialism.
you missed an option (Score:5, Insightful)
In real life, I see most of the benefit of automation going to the owners/shareholders of the companies, and that money doesn't necessarily stay in the community where the factory is (or even in the same country).
Re:Increased leisure time (Score:5, Insightful)
Re:What year is this? (Score:5, Insightful)
My advise for adjustment in this case; get good at fixing industrial robots.
Re:Yeah... there's problem in the summary (Score:5, Insightful)
aren't suddenly going to be able to become successful in a "creative class" job
And what's more, there is a massive surplus of people in the "creative class" jobs: The number of reasonably competent musicians, authors, artists, poets, etc far outnumbers the market for the arts. For every Brian May there are dozens if not hundreds of really talented and skilled guitarists that you've never heard of. For every Jackson Pollack there are many many good painters that you've never heard of. For every JK Rowling there are many many good authors toiling away in obscurity.
The completely fraudulent idea that has been pushed for the last 20 years is that if you give everyone in America a PhD, everyone will earn what a tenured professor makes. What actually happens is that if you give everyone in America a PhD, you have PhDs mopping floors for a living.
Re:Other than trading (Score:4, Insightful)
You're suggesting that as we're able to produce an increasing proportion of humans' needs through mechanical rather than human labor, we'll run a risk that the robots will go on strike and refuse to keep providing us with the fruits of their labor?
Re:What year is this? (Score:5, Insightful)
Re:Other than trading (Score:5, Insightful)
Socialism.
Maybe. Or Something like it. The interesting question is "What happens to people we just don't need anymore?" What do they do? McDonalds has a robot that flips burgers, but hasn't rolled it out because customers find the burger less appealing if it's entirely cooked by machine. What happens to people who work fast food and similar McJobs when the public accepts it and those jobs go away? It really isn't practical to say that they should build burger making robots. If they could do that, they wouldn't be flipping burgers.
Capitalism works when nearly everyone has a place that they can fit in the economy. There used to be a phrase "The world needs ditch-diggers, too". But now we don't. We need one guy operating a backhoe that does the work of 20 men with shovels. And the backhoe may not always need that one guy in the future.
This will really hit home in 10 to 15 years when Long-Haul trucks (not local deliveries, that's harder) are automated. The technology for driving coast-to-coast on I-70 isn't that demanding. Infinity has an SUV that can already stay in it's lane, and fully stop the car to avoid hitting stopped traffic ahead of it. It's not hard to see a truck pulled into a truck-stop by a human, it's dropped off and reconnected to an automated rig which is piloted by remote by a human until it gets on the interstate. Then it self-pilots for days until it ends up at another such stop in california.
If this comes true, thousands of middle class families will be destroyed, because there isn't an obvious place for those blue-collar drivers to go and make similar income. Society simply won't need them anymore. And whomever owns the automated trucks will increase their profit.
Eventually, either wealth redistribution or revolt will happen.
Re:What year is this? (Score:1, Insightful)
These exact same fears were written about in 1980.
The difference now is that the jobs that automation and self-service have been cutting have been non-labor, middle class jobs. In 1980, there were 225,000 bank tellers in the US, with a median of 10 years experience. Now there are only 28,000 with a median of 3 years on the job. Travel agencies got gutted. The back office in real estate agencies has vanished. Small-business clerical work is evaporating.
These were career jobs. These were jobs retirees could still work part-time. The jobs that are being created in their stead are either manual labor or require more education. The pink-collar job that stabilized the middle class has disappeared.
Re:why (Score:4, Insightful)
The United States is actively in a revolution of sorts to end all the (small-s) socialist efforts of the past 100 years. This is simply because the rich don't think they should have to pay any taxes or contribute any money to the system that has allowed them to prosper.
The fact is this: there is a capitalist/socialist balance. When it gets too far out of whack you have popular movements of some sort because it creates huge unfairness. EITHER WAY it creates a situation where you have a small elite pushing their agenda on the majority of people.
Re:why (Score:5, Insightful)
work is not virtuous.
I am no philosopher wise man (and judging by your post neither are you) but I have experienced periods in my work where I sat around doing nothing, just surfing the internet. I have also done extremely useful work writing code that went into production. Even though I made the exact same money "working" exactly same hours, I can tell you that my mood and mental health during the two periods were drastically different, like night and day.
There is something to be said about meaningful work. The writers of old knew more than you think.
Re:What year is this? (Score:4, Insightful)
Solution: guarantee everyone a basic income, and hold challenges to stimulate individuals to innovate on their own or through collaborations across the unprecedented communication tool of the internet.
Re:What year is this? (Score:5, Insightful)
So your concern is only about the social status of "having a job"? Isn't leisure a good thing? Why do we have to serve an obsolete, feudal economic theory that postulates only people with jobs can have money? A better solution is to use economics as a tool to serve us instead of the other way around: guarantee each individual a basic income.
Re:The cheapest robots are slaves... (Score:0, Insightful)
And in the Hunger Games, certain Districts train their tributes in order to reap the benefits of a victory.
This does not make it a good system.
Re:What year is this? (Score:4, Insightful)
Yes, I can.
Moving from agricultural jobs to industrial jobs that take no skill or can be easily learned is a much different transition that moving from mid-skilled industrial jobs to those that take a very special skill or talent.
"Entrepreneurship" is a word that is getting flung about, but not everyone has the skill to be an entrepreneur. Also not every person has the skill to go into some sort of creative trade or become a corporate exec.
To be flip about it, you have to have jobs for the people on the lower part of the IQ scale to do. There are all type that have to survive in the economy. This particular transition is feeding those people (as well as a good deal of the smart people too) to the wolves.
Re:Other than trading (Score:5, Insightful)
Socialism.
So do I get (or forced) to be the one that stays home because I'm not needed.
This same argument is pretty applicable to capitalism right now. Take a look at the long term unemployed here in the US. They're forced to stay home because they aren't (percieved as being) needed.
Even better, take a look at Europe, where unemployment among new college grads is near 50% in some cases. These are motivated people who have followed the rules, and done what society has told them that they're supposed to do. But it isn't paying off. Sooner or later, they're going to decide that following the rules is for chumps. And that's when the real trouble is gonna start.
Shorter work weeks (Score:4, Insightful)
Actually, productivity improvements in the past did result in shorter work weeks. In the late 19th century, most people worked 12 or more hours per day, 6 days a week. Henry Ford standardized on a five day work week in 1926 (unheard of at the time). FDR established a 40 hour work week as standard in 1938. Increased productivity used to mean shorter working hours, however from about 1980 onward, average working hours have actually increased, despite continual productivity increases. The gains from those productivity increases have been captured by the top 1% instead of being spread evenly through the population.
Re:What year is this? (Score:4, Insightful)
Do you remember how hard it was to pass watered-down it'll-cost-us-more-not-to health care reform on the grounds that it was socialism? People would blow their stacks at anything resembling preparing for a work-free future. Americans can't stand "slackers".
Re:What year is this? (Score:2, Insightful)
I will also point out that we have a tremendous in-prison population.
Some people who can't find work turn to crime. They then vanish from unemployment statistics and eventually wind up in jail, where they are completely provided-for by taxpayer dollars.
I wonder how the growth in prison population size correlates with the technological displacement of the worker. I haven't seen any data on that.
Re:What year is this? (Score:5, Insightful)
At some point the 'haves' need the 'have nots' to have money. Filthy rich people don't continue to get filthy rich off of one another.
But not all the 'haves' see things this way. People tend to measure their wealth by comparing against others - typically their peers, rather than against an absolute standard. An american with a small house, a used car, and only one TV will tend to tell you that they're not very well off, despite the fact that as a percentile of the world population, they're very well off.
The economy is a game. But it's a funny game that is meant to be played forever. But the problem is that we're approaching having people "win" the game. And they want to win it. Have you ever badly beaten a child at the game "Monopoly"? It's much the same thing. And you run the risk of the losing player becoming so frustrated that they simply toss the board from the table. And they destroy your hard earned houses and hotels in the process. This metaphore scares the hell out of me.
Re:What year is this? (Score:3, Insightful)
Repair, the repair function. While you're at it, whack some other parts with a hammer. Durability testing should be part of the job description.
Re:Other than trading (Score:4, Insightful)
Italics fail. I'll preview this time.
So you seize all the factories from the EVIL factory owners who built them.
How many factory owners do you think as much as lifted a hammer to build their factory? I'm guessing zero.
It's the natural result of rewarding people for being better at what they do than others are.
No, it's the natural result of rewarding people for having more.
Re:What year is this? (Score:5, Insightful)
Things are always the same... until they're different.
Here's just a few consideration on why this automated future becomes more problematic than before.
1. For most of the industrial revolution, people wanted good/services just to make life tolerable. The result was that people were willing to work really hard to achieve those good/services. We're talking things like running water, electricity, roads, rail, food at the super market. You can see this phenomenon today in Asia where the Chinese, typically from rural areas, work like crazy just get here. Western people did this in previous times too. But once you have a achieved such a standard of living, people aren't willing to work for that next level of 'stuff'. Don't get me wrong... we all *want* that next level of stuff. But we're not willing to really work for it. I want a Ferarri, but I'm not willing to work for it. I want clean drinking water, and I am willing to work for it.
2. Deflation. Deflation is many things. Many are bad... especially if you view the growth economy. But one way to look at it is as a sign that people's needs as an aggregate are satisfied. Consider for example a world where everyone owns their own home. A utopia for many. Homelessness ended. Shelter solved. Now take a step back and look at how our society would handle such a utopia. The collapse of the entire housing and mortgage market. It would be seen as one of the most horrific events. And well... the recent housing crisis basically shows this. Instead of seeing cheaper housing as a good thing... it has been painted as a bad thing.
3. 'people services' are increasingly public services. Just what 'people services' do you think people are actually willing to pay for? Healthcare? Education? Those are the two main big ones. And in most countries... even the US, they are heavily if not totally government run. This was not the case in previous changes. Both the horse buggy and the automobile were private ventures. So with government services now, they are heavily paid for via taxation or mandates. To replace the demand of physical goods, governments are going to have to replace it with higher taxation and redistribution. Not just on the rich, but think of it as a forced service. A poor person working at mcdonalds is going to face higher taxes as he is 'forced' to purchase (via taxation or mandates) expensive healthcare services. Don't think for a second there are enough 'rich' people to provide this... the math doesn't work. This is not just a simple change in the economy from horse and buggy to car... it's a major social and political challenge.
If the government is basically going to run the future economy, then it must treat all workers fairly. Guaranteeing them equal access to work... It's a very complicated problem.
Again, this goes back 1 where what are people willing to work for to get. One can imagine world where I sit around paying for yoga classes. But if I had the choice to work hard and get yoga classes versus work less and not get yoga classes... most people will choose to work less. Again... rephrase that around the older industrial revolution. Work hard and get clean drinking water, or work less and suffer disease and poor health... Notice the difference. People services are really overrated... as is the general service economy.
4. The new industries require less and less work. The previous changes still required loads of people to operate. The change from horse and buggy to car still required many auto workers. The introduction of the telephone initially requires lots of switch operators. Increasingly new industries need a few highly skilled people to roll out. Some high quality engineers and technicians. The rest is automated. So while there are new jobs... there are not enough new jobs in the new industries for the masses. A small populations might be okay... but a large country like the US with 300 million people... there's enough jobs for everyone.
5. Women in the workforce. Not a problem... but a reality that we've basically doubled the number of jobs required to be created at at time when automation is getting rid of jobs.
Re:What year is this? (Score:3, Insightful)
Because humans (at least a subset of them) overvalue social status. Social status is always a scarce, zero-sum commodity, regardless of material abundance. If you sleep on a flat rock and your rival sleeps on the ground, you win. If you have a starship and your rival has ten, you lose.
Re:What year is this? (Score:4, Insightful)
look.
the IDEAL end result is that the work output of just few guys will feed the entire nation and the rest can just fuck off with their social security doing arts & etc to get the social security extra bucks from the other guys on social security if they want extra hookers&blow. of course the ten individuals who manage to do the actual work would be pretty rich.
we're already way further that road than people would imagine, but really, think about how few jobs are actually connected to the basic human needs of medical care, food supply, shelter and clothing.
it used to be that the vast majority had to toil on farms just to keep the nations from starving.
I wouldn't be surprised. However, as current discourse goes, a large number of people will be arguing for (and voting for) the removal of any sort of taxes for those 10 people, thus also eliminating the source of the social security bucks to keep the other 300+ million people fed.
We may just end up having to revive the virtually-extinct trades of shoe-shine boys, gas station attendants, bank tellers and so forth, just to have something to do.
Re:What year is this? (Score:4, Insightful)
To add to this, I would also argue that robots and automation have often saved the jobs that remain, rather than replacing the jobs that have been lost. Without automation, many businesses would have moved manufacturing overseas (or contracted it out, or gone out of business), because they simply couldn't afford to compete with other companies (including foreign ones) that have taken steps to reduce their production costs.
Not that the people involved will see it this way, of course. When your plant is struggling and the managers replace half the workers with robots, those workers will see the robots as replacing the half that were laid off, not saving the half that could be kept.
Sounds like a Slaveowner ca 1800s (Score:3, Insightful)
"He could be running around like a savage in the jungle with the other Beasts. Instead we give him Civilization, clothe and feed and educate the Savage."
Maybe we shouldn't accept our economic systems as a "fact of life." They're a human manufacture, subject to our rules and goals.
Re:What year is this? (Score:2, Insightful)
Another way to look at it is the labor market has a significant resistance to change.
In different countries, labor markets have different amounts of resistance to chance. So of this is for cultural reasons (people tend to do what their parents did) but is also driven by government policy. The Economist had an interesting article this week on youth unemployment. Around the world today, there are nearly 300 million jobless people between aged 15 to 24. But this problem is negatively correlated with manufacturing automation. Countries like Japan, America, and northern Europe, where factories often have the latest tech, have far fewer unemployed young people than countries in southern Europe or India. The biggest problem is inflexible labor markets that make it hard to hire/fire and modify jobs. So if people are worried about unemployment, they need to see that robots are not the problem, and the key is to change government policies to allow the economy to adapt and integrate technology smoothly.
Re:What year is this? (Score:5, Insightful)
These exact same fears were written about in 1880.
So this must be exactly the same then.
Every wave of automation works the same way...
Except when they don't.
One of these automation revolutions is going to be qualitatively different from the ones in the past. I don't know if this one is the one, but it is coming. At some point when a machine can do any job better, faster, and more cheaply than any human, what's left for the human to do? Beg for food I guess... or something.
Re:What year is this? (Score:5, Insightful)
As the summary implies, one way people use when they attempt to adjust is by killing people and breaking things. It is probably in our best interest, both individually and "as a society", to help these people adjust in a more orderly fashion.
Re:Other than trading (Score:5, Insightful)
The interesting question is "What happens to people we just don't need anymore?" What do they do?
Unfortunately, the answer, at least from some quarters in the US, seems to be really simple: let them die of neglect. For instance, the obvious effect of drastically cutting Social Security and Medicare (which is a major goal of the current Republican Party) is to kill old and disabled people through starvation, neglect, lack of medical care, etc. After all, they can't work, so they're economically useless, so why bother keeping them alive?
I should mention that as far as your trucking scenario goes, having a whole bunch of automated trucks travel coast-to-coast is far less efficient than having a single (potentially automated) freight train travel coast-to-coast.
Re:What year is this? (Score:4, Insightful)
Just what 'people services' do you think people are actually willing to pay for?
You'll notice I said "personal services" - as opposed to "impersonal services". Each automation wave brings stuff that was previously only found among the wealthy into the hands of the common man. I expect this time to see a boom in personal shoppers, wedding planners, interior decorators, home theater consultants, car shopping assistants, and a bunch of services I've never heard of because they're still only for the rich (all the ones I listed are already taking off).
Any service that requires that you get to know the person you're proving it for "doesn't scale", and so will provide jobs in proportion to the number of consumers. While I can imagine all those jobs eventually being replaced by AI, I don't see that happening in my lifetime.
Women in the workforce. Not a problem... but a reality that we've basically doubled the number of jobs required to be created at at time when automation is getting rid of jobs.
I think we've failed hard as a society in spending the time needed with our children, raising them to be good people, as a result of both parents working full-time-plus, and of too many single-parent families. Women have proven they can do stuff just like men now - great - lets move on and have both parents working fewer hours and between them spending a lot more time with the little brats in the formative years. Also, as we live longer I expect the worker-to-retiree ratio to continue falling, and so the per-capita need for job creation should gradually fall.
I don't know how we get there, but I could certainly see a society working where people work full time in their 20s to learn their trade and get started financially, then part time for another 20 years or so while raising a family, then retire.
Re:What year is this? (Score:4, Insightful)
I don't mean this as a personal attack, but what you've basically done is run down a list of fallacies that are covered in econ 100-level classes.
RE: 1) The 'want' of things beyond what you can afford is a central driver of economic development. Technology--including automation--constantly lowers the bar with respect to affordability of goods and services. To paraphrase the claim of many popular software frameworks, economic development and technological progress make expensive things affordable and impossible things expensive. Also, just because you are not willing to work for luxury goods and services does not mean that no one is.
RE: 2) Ignoring the incorrect usage of 'deflation', this is a classic expression of the fallacy of overproduction. Cheaper housing is not a bad thing at all, and cheaper housing did not cause any financial crisis. If housing became cheaper in general, people would either spend more money on other things or upgrade to larger/more elaborate houses (or some combination of the two). The root of the recent housing market collapse was simply that people overextended themselves based on terrible judgment. If your ability to keep making your mortgage payments depends on the value of your house increasing indefinitely so that you can leverage that increased equity via re-mortgaging, you will go bankrupt sooner or later. Not only that, but you are likely to do so at the same time as everyone else because your (or your neighbor's) default puts downward pressure on the price of housing in your area, which increases the risk of others defaulting, which puts downward pressure on the price of housing, etc. ad infinitum. Do this on the scale of meaningful %s of US GDP due to federal legislation ostensibly intended to "make housing affordable" and you have a massive blowup on your hands that is completely unrelated to the real cost (as opposed to price) of housing.
RE: 3) There is no causal relationship between technological progress in general (or increased use of automation in particular) that drives growth in 'public services' as a percent of GDP. There is likewise no rationale for technology forcing nationalization of greater percentages of the economy as a whole. If a car costs less due to more efficient production technology, people will buy more cars or other goods and services with the money they would have otherwise spent on the car. People who choose to save the money instead provide capital (via the banking system) that funds entrepreneurs who develop new businesses or new ventures within existing businesses to adapt to/take advantage of the new economic environment.
RE: 4) Setting aside the unfounded claim that 'new industries require less and less work' and that 'previous changes still required loads of people to operate', the fundamental flaw in this line of reasoning is that it ignores the downstream effects of the efficiencies gained, which inevitably result in new economic developments. Cheaper and more reliable automobiles, for example, have allowed for the incredible growth in US economy by increasing mobility of labor and expertise. Whereas you previously had to find employment within walking/horseriding distance of your house (or live in on-site housing) and employers had essentially monopoly access to your labor, automobiles allowed people to force every employer within driving distance of their house to compete for their labor. This also fueled growth in the housing market as suburbs became feasible as maximum distance between work, house, and other facilities relied upon by the average household increased. The transportation industry--first for bulk goods and services and later to small-scale bespoke delivery services like UPS and FedEx was also made possible by further developments in the auto industry. Making autos even cheaper will open access to broader markets (e.g., in developing nations) and allow access to higher-end features in mid-level models.
Taking a step back, unless every 'want' of every individual is completely satisfie
Re:What year is this? (Score:4, Insightful)
Why not?
It's possible at least at the national level (so long as you treat filthy rich in a way that's relative to most of the poor on the planet). I can't see why the same thing can't scale down at least somewhat towards individuals.
Very few millionaires buy 20 cars. However, most people who earn 50K have at least one car. You get more economic stimulation from 20 middle class people than from one rich bozo, even though the money is equal.
Re:What year is this? (Score:5, Insightful)
What makes you think you have a machine? You don't have a job, so you couldn't possibly have bought the machine, or the feedstock matter supply, or the copyrighted/patented/exclusively licensed fabrication patterns that the machine uses to create the "anything" you had in mind.
Post-scarcity economy is fiction because if anyone can secure proprietary advantage over others they will. If necessary, scarcity can be completely artificial, but it will still exist, and as a consequence, we will always have "haves" and "have-nots".
Re:What year is this? (Score:4, Insightful)
Further, I think it's really srange in the subject line to say that manufacturing is recovering, because if you stopped there and didn't read further the average person would assume that manufacturing jobs were also recovering. Is this being touted as a good thing or a bad thing? Is it good for the economy that a few people still get their profits, or is it a bad thing because we have lots of workers unemployed still?
Productivity is way up, wages are flat, jobs are declining. Three things listed there, and one can treat the group as net positive, net neutral, or net negative, and the answer probably says a lot about the person.
Re:What year is this? (Score:5, Insightful)
Countries like Japan, America, and northern Europe, where factories often have the latest tech, have far fewer unemployed young people than countries in southern Europe or India. The biggest problem is inflexible labor markets that make it hard to hire/fire and modify jobs.
Labor laws in Germany and Sweden are among the most inflexible ones in Europe but both countries are doing pretty well compared to the rest of Europe regarding unemployment.
Spain and Greece didn't have a problem with inflexible labor market. They had (and still have) a very serious problem with money circulation. Both countries had very high self-employment rate just before the recent crisis (25+%, three times higher percentage than Sweden or Germany), huge services sector and small industry. Their international income was mostly from tourism, not export of goods.
So I have a question for you: What happens when most of your customers run out of money? When you're a medium or big manufacturing business, you'll find new customers who have money. When you're self-employed and working in services, you'll go out of business. When 25+% of the entire country are self-emloyed people working in services, even a short recession can trigger massive domino effect.
Re:Yeah... there's problem in the summary (Score:4, Insightful)
From what I remember in the news, one of the reasons why so many of the young were unemployed was that because of the free education they all went to University for free and all got PhDs and all have a dream to get a government job that they can't get fired from. They won't take anything less.
No, the reason many of the young are unemployed in Greece is the same reason the young are unemployed in the US [prb.org]: When there's a recession, nobody is hiring. When nobody hires for years running, new graduates (at whatever level, including high school) can't get into the job market. Normally, new graduates compete with older more experienced workers by accepting a lower wage, but in bad times experienced workers will take the lower wage instead of being unemployed, and the new graduates can't compete effectively.
Re:What year is this? (Score:5, Insightful)
Could someone hand that guy a few insightful mods?
This IS exactly what caused the crisis and keeps it "alive", the economic circle is broken. Money has to change hands for the economy to thrive, and for that, money has to be available for consumption, because ONLY with consumption and the removal of goods from the circle, an economy can grow. Economies don't grow with investment, they grow with sales.
Only when someone buys something with the intent to use it (and hence eventually destroy it) the economy grows. Only then this commodity must be replaced with a newly produced one. If it only circulates from trader to trader, nothing is gained.
We need money in the consumers. Money to spend on goods and services. Especially services, our economy is highly dependent on services. But services are also the sector that suffers the most during a crisis. People can more easily live without a haircut than without food. So any kind of crisis that stems from a lack of spending money on the consumer side of the economic cycle will hit the service sector the hardest. As we can see now.
Your analysis of the problem of Greece and Spain (and to some degree also Portugal and Italy) is quite accurate. The fact that people cut back on spending for holidays also doesn't really help these countries that depend to some large extent on tourism for their GDP.
If we really want to end this crisis, we need more money in the consumers. Higher wages, lower taxes, and as much as I hate welfare even with social service handouts, compared to the billions pumped into banks that would cost peanuts. Instead of propping up failed businesses that failed because they mistook the economy for some sort of casino, pump the money into consumers. That way, the demand (that is sorely lacking right now, that's why all those services shut down) will increase, and with increased demand, someone has to supply, someone has to offer the service. Unemployment will automatically sink as businesses open up and existing ones need more employees to handle the increasing demand.