Summary: what follows is a short economic science fiction story about the events leading to a fundamental crisis hitting Europe on July 1st, 2031.

In the late 90's of the 20th century, as is well known by those who have the age to remember it from their own first hand experience, rapid economic growth fostered by the perspective of a European economic and political union still was able to reabsorb much of the labour steadily becoming more and more redundant as a result of growing technical abilities in the supply of services and industrial products.

The need for restrained wage demands to avoid dangerous quickening of this redundancy process was stressed in many circles. Even trade unions, fearing decline of the demand for labour and hence of potential union members, negotiated for jobs rather than income. With unemployment benefits frozen to stimulate the unemployed to find jobs, the total burden of wages and unemployment benefits on production costs was successfully checked, profits rose, and income shifted its direction to middle aged workers and higher personel, traditionally a group of fierce savers. Their supply of saved capital lowered the interest rate, shifted their attention to the stock markets, where an army of new buyers bid up the prices of stocks, the supply of which could by far not keep pace with new demand. Stock prices rose spectacularly, especially in the memorable years 1996 and 1997.

Investment being at a satisfactory level to fuel economic growth not too much neither too little, the industry and service sectors rationalized their production: in 1997, replacement of 30% of the labour force by machines was technically possible, but part of it required time consuming reorganization schedules, and another part was still too costly and had to wait for the development of cheaper means.

The Rate of Technical Improvability (RTI), measured as the amount of average hours of labour per day used in the economy that can be replaced once and for ever by the result of one hour of average labour, kept growing exponentially.

By 2010, RTI was .25. That is, the average situation was: pay someone for one hour, and after that hour has been spent, .25 hours per day in your firm were permanently saved. The average wage per hour being 40 EURO, this meant that an investment of 40 EURO at one single point in time saved a permanent cost flow of .25*40 = 10 EURO per day!

RTI grew exponentially. In Januari 2030, it had reached the value of 8. This means that one single hour of average work (that is: a total investment 40 EURO) rendered superfluous 8 hours per day, that is, one average full time job. By the same token, the unemployment rate had risen to 40%, and every remaining worker lost 80% of his hourly wage of 40 EURO to government tax and the unemployment benefit fund's premium. The unemployed received quite a low benefit, but still became a heavy burden because of their quickly growing numbers.

How to keep workers in their jobs? This was the main question on the agenda of all political parties. They should be cheaper than the workers used to wipe them out of the production process. Ingenious methods were devised to distinguish between these two groups of workers in order to tax heavily the labour saving workers. Entrepreneurs and workers turned out to be highly creative in their joined efforts to make a lot money out of creaping over, under and through the bureaucratic dikes laid.

On April 4th 2031, the dikes broke: a fully automatic unmanned ship from Taiwan arrived, containing machines able to do the labour replacing work in service and industrial production all by themselves. Near Gibraltar an attempt was made to halt it, but due to its advanced information system the ship was expecting it, succeeded to reach Lisbon, to contact machines of some already completely automatised European service suppliers, and sell its load.

On July 1st 2031, the last European worker became redundant.

The problem of the PHiLES subject group The Future of Employment is: how to organize the distribution of labour and income in the possible real world historic process of which the economic science fiction story above is a drastic and satirical abstraction?