Technology and Jobs: More of One and Less of the Other?

1. Technology and Jobs: More of One and Less of the Other? Volti Chapter Nine

2. Many technologies have led to the elimination of human jobs • technological development has led to great increase in worker productivity • 1900 - 1 hour labor = $1.00 of goods and services • 1970 - 1 hour labor = $6.00 of goods and services (after adjusting for inflation)

3. The Threat of Machine-Made Unemployment • Computerized typesetting - typesetters jobs - 8,000 to 3,800 (1966-1978) • Computerized banking - 35,000 transactions/day with 10% fewer tellers • Electronic synthesizers - studio musicians are back by a third

4. The Technological Threat in Historical Perspective • These developments are not new to our times • 18th Cent. - power loom forced many loomers out of a job • (Their future loomed none to bright ahead of them... heh, heh!) • Opposition to new technology came not only from workers but also from officials • 1638 - Britain - banned use of "engines for working of tape, lace, a ribbon, and such, wherein one man doth more amongst them than seven English men can doe."

5. A Case for Optimism • Technological advance is NOT incompatible with high levels of employment • When considering effects of technological change on overall level of unemployment: • Even if all available technology were used to full capacity --> there would still be plenty of work to do • People still need better food & housing • Even among the affluent, the desire for more and more still exists • Technological advances will not lead to job losses if the demand for products/services increases at the same pace as productivity • Technological change often creates the need for new work to be done

6. How Technology Creates Jobs • Some technology has produced jobs that did not exist before: COMPUTERS • Most occupations held today did not exist one hundred years ago • Technological advance has created the need for new and better technologies • "In 1963 one economist warned that American households were saturated with domestic appliance, resulting in a stagnant market for manufactured goods; the only significant new product was the electric can opener."

7. Indirect Effects of New Technology on Employment • The Automobile: greatest job generator of the 20th Century • 1 out of 7 jobs in American Economy result from auto • legions of jobs tied indirectly to auto as well (sales, insurance, mechanics) • Few other technologies will be able to match auto in job generation • Jet airplane, computer, television all pale in comparison • Although these industries have not directly generated jobs, they have had indirect impact

8. The Machines Aren’t Ready to Take Over • Stereotype of technological change: robots are going to take over everything • Only partially true: 1 robot/340 manufacturing production workers • Machines, however, have replaced some human staffed positions • CAD - (computer-aided-design) • CAM - (computer-aided-manufacturing) • Flexible manufacturing systems - general purpose machines capable of a variety of tasks • Impressive, but very expensive ($3-4 million each) and not the norm for industry • Can also be problematic --> if machine breaks then everything stops

9. Technology, Jobs and The Changing Structure of The Economy • Automated industrial processes have replaced many human positions • 15% of work force will be lost as computerization spreads • In the last 100 years, 2/3 of pre -1880 jobs have been lost to mechanization • Manufacturing jobs have declined regularly since 1948 • BUT, new jobs have been created • In particular, the service sector has grown considerably • Neurosurgeons and shoeshiners • For the first time in human history, more people are employed in the service sector than in the manufacturing sector

10. Technology, Jobs and The Changing Structure of The Economy • QUESTION: If the basis of human survival requires food, clothing, and shelter...How can the majority of the work force be employed in occupations that contribute nothing to production? • ANSWER: With the rise of industrialization, it takes less human labor to produce needed goods • Despite the rise of technology, there is a continued and growing demand for • services • Dept. Of Labor - the most needed jobs of the future are waiters, nurses, cashiers etc. • Also, we are human beings and we crave physical contact • Education - although technology has played a role, lectures and discussions, over which a professor presides is still the desired method for teaching • Although a professor could lecture to 500 students and increase "productivity“ it is typically less rewarding for the student and the teacher • Also, human beings still have a need to be entertained, comforted, and healed • Technology has affected many jobs - not always adversely • Telephone Industry - operators eliminated considerably when phone switching became automated. Yet number of jobs in telephone job market has continued to expand because of advanced technology and increased demand

11. Softening the Blow • Technology does destroy some jobs but it also opens up opportunities for new jobs • The worker’s best defense against the changing tides resulting from technology is adaptability and versatility • Most importantly, TECHNOLOGICAL CHANGE HAS NOT ELIMINATED THE NEED FOR WORK • - even advanced technologies require skilled operators