Technology and Jobs: More of
One and Less of the Other?
Volti Chapter Nine
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Many technologies have led to the
elimination of human jobs
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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)
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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
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The Technological Threat in
Historical Perspective
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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."
A Case for Optimism
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Technological advance is NOT incompatible with high
levels of employment
When considering effects of technological change on
overall level of unemployment:
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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
How Technology Creates Jobs
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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."
Indirect Effects of New Technology
on Employment
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The Automobile: greatest job generator of the
20th Century
1 out of 7 jobs in American Economy result from
auto
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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
The Machines Aren’t Ready to Take
Over
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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
Technology, Jobs and The Changing
Structure of The Economy
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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
Technology, Jobs and The Changing
Structure of The Economy
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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
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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
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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
Softening the Blow
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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