Next Wave

Global labor arbitrage - finding ever cheaper sources of labor - has made a tremendous impact on the bottom lines of Fortune 500 companies, US workers, and workers in emerging markets with benefits coming to the first and last largely at the expense of the middle. (I know, Americans got cheap stuff to buy at Walmart as a result, but hey, when you factor in that they were mortgaging their homes to buy that crap, it doesn't look like such a great deal, huh?).

Anyway, the cigar chompers are running out of cheap (or rather, cheaper) labor sources, so what's the next stop in the drive to eliminate labor? (And don't kid yourself by thinking a) senior executives don't want to do just that or b) I'm 'white collar', not ~shudder!~ labor. They do and you are - unless you've got a 'nut' that wouldn't be exhausted by you or your children, even if you never worked another day in your life). The next stop is Automation. Why pay Indians or Bulgarians or Costa Ricans to run your data center when you can have the systems run themselves? Why pay analysts in the EU and the US to munge business processes and design improved systems when you can automatically capture and analyse user interactions with business apps and programatically generate design improvements? And once you know enough to improve a process and its supporting systems *automatically*, you can certainly begin to reduce the number of people it takes to actually *run* those processes while simultaneously improving output.

I'm talking about a John Henry and the Steam Hammer scenario here, but on a global scale. Only this time it will be massive declines in the demand for 'skilled' labor (though I wouldn't have told John Henry to his face that he was "unskilled"). And not just in the US, but globally. Factor in that a large percentage of the people who are displaced by either labor arbitrage or automation will no longer be "good consumers", and the pressure to improve the bottom line as the top line falls only increases.

All of this is going to have a tremendous impact on social and political stability, around the globe. Unemployed people are restless people. Are fearful people. And are often all-to-malleable in their thoughts and consequent actions.

Just sayin'.