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The physics of unemployment

Ultimately, we may have to choose between a slightly warmer climate and higher unemployment.

Last fall Gail Tverberg, a retired actuary and mathematician, was playing with employment and energy data on her computer when she made an interesting discovery. The data exhibited a strong correlation between the number of people employed annually in the US and the country's annual consumption of energy, as you can tell from the two graphs below.

I came across Tverberg’s correlation when teaching a class on energy at the City University of New York. It resonated with my old research paper on the thermodynamics of natural selection. I thought: Of course, work is proportional to energy! We teach that relation in introductory physics classes.

One can argue that in a modern society most of the energy is consumed by power plants, industrial machines, cars, airplanes, and so on. However, machines are operated by people. Thus, a close relation between employment and energy is to be expected. Economists may attribute the relation to the fact that both are correlated with GDP.

Most of the energy we use comes from fossil fuels, a situation that will persist for years, according to a 2012 forecast—displayed below—by the US Energy Information Administration. For those of us who are concerned with pollution and climate change, that is not good news. Wind and solar energy remain unable to provide a viable alternative to fossil fuels. Efforts to insulate windows and to squeeze more work out of a gallon of fuel, as important as they are, have their limitations. As much as we want to reduce carbon dioxide emissions, it is not clear how that goal can be reconciled with the need to employ more people in the next two decades.

It is true, however, that the energy consumed per dollar of GDP is greater in the US than in other developed countries, so that in a short run squeezing more GDP out of a gallon of fuel may help employment. The problem could become even more acute because of population growth, which in early 21st century America depends strongly on immigration, as the figure below shows.

A comparison of the projected rate of the population growth and the projected rate of energy consumption shows that even for moderate levels of immigration the first greatly exceeds the second. According to Tverberg, such a trend will result in a higher unemployment. If the US population is to grow, we need to burn significantly more fuel in the years to come. Ultimately, we may have to choose between a slightly warmer climate and high unemployment.

In the long run, a feedback effect can be anticipated: If the energy shortage produces high unemployment, immigration into the US will subside. Climate change is a global problem, but because US workers leave much greater carbon footprints than do workers in less developed countries, a shift in immigration would slow the effect of CO2 emissions on climate.

US energy policy should be in line with physics: When less energy is used, less work is done. As we move through the 21st century, environmental problems caused by our addiction to oil, will be dwarfed by problems arising from the depletion of oil reserves, which, according to a forecast—shown below—from the US Geological Survey, will inevitably dwindle.

If replacements for oil are not found, employment will take a dive. Given the current state of energy R&D, it appears unlikely that the renewable energy will do the job 25 years from now. Production of natural gas and coal may rise, but will it be enough to satisfy our energy needs?

To preserve our way of life 30-40 years from now, we may have no other choice but to become more comfortable with the nuclear energy, which is also climate-friendly. Heavy investment in research on alternatives to oil will also be crucial for the long-term survival. The high cost of such investment only proves that we should make it now when the oil fueling our economy and tax revenues is still in abundance.

Eugene Chudnovsky holds the position of Distinguished Professor of Physics at City University of New York in New York City. He is also a fellow of the American Physical Society.

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http://aip.metastore.ingenta.com/content/aip/magazine/physicstoday/news/10.1063/pt.5.2006
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Scitation: The physics of unemployment
http://aip.metastore.ingenta.com/content/aip/magazine/physicstoday/news/10.1063/pt.5.2006
10.1063/PT.5.2006