Technology and Jobs: More of

One and Less of the Other?

Volti Chapter Nine

 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)
 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
 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."
 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
 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."
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
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
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
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
 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