ANDY KESSLER: This Is One Puzzling Job Market: Why has productivity lagged for so long? Because huge sectors shunned technology.

Before generative AI replaces me (it can pry my keyboard from my cold dead hands), what’s going on with jobs? The jobs report for January was huge: 517,000 new hires and a 3.4% unemployment rate, the lowest since Woodstock. Restaurants and retailers can’t hire fast enough. Yet we’re bombarded with layoff announcements: Google, Amazon, Goldman Sachs, Salesforce, Microsoft, Disney, Dell and—say it ain’t so—fake meaters Impossible Foods and Beyond Meat. Meanwhile, productivity dropped 1.5% in 2022. Something’s screwy. . . .

Medicine is unproductive. It’s a doctor-intensive chronic-disease-treatment business. But with prevention and diagnostics to find disease early, perhaps we’d need fewer oncologists and cardiac surgeons. The technology exists with fancy imaging and gene-editing tools, but it’s slow to roll out. And government is two million employees who produce no revenue, ripe for antiproductive processes. Even corporations are slow to adapt to new technology—it took lockdowns to force videoconferencing and add “let’s Zoom” to corporate lingo.

The Federal Reserve’s zero-interest-rate policy created such massive growth that companies threw bodies at their problems instead of re-engineering their businesses. A soft landing or more likely a recession will drive much-needed job transformations. More low-end jobs will be automated. Restaurants and retail are already layering on technology to make up for the shortage of workers, especially with online ordering, self-checkout and delivery. But the process is slow. Still, I suspect that within five years robot shelf stocking will automate even more low-end jobs.

Knowledge workers at home were productive for a short while, but now too many mail it in and miss spontaneous interactions in the office. I think companies will soon demand a smaller workforce return to the office, perhaps reviving productive output. Newfangled ChatGPT and generative AI have work to do, much like the original spreadsheets or rudimentary speech-recognition systems. These tools will eliminate some jobs but make others more efficient and find new uses not yet thought of. Those clinging to the old ways will be passed by.

It’s a new jobs paradox: We have both a shortage and a glut of workers.

Plus: “Bell Labs invented the transistor in 1948, but its parent, AT&T, had 10 to 20 years of old vacuum-tube inventory and so delayed using transistors. Similarly, for decades the economy had an inventory of baby boomers to throw at growth. But not for much longer—the fertility rate in the U.S. was 1.6 in 2020. This will be a year of re-rationalizing workers.”