Technology versus Labor February 2014
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In 2006, the Scan™ article "Automation Climbing the Value Chain" cautioned that traditionally secure middle-class jobs in sectors as diverse as scientific research, medicine, multimedia production, financial reporting, and financial services are at risk of being taken over by technology. During the past couple years, the discussion about advancing technologies' impact on job creation and sustainability has been in full swing. The jobless recovery—a condition in which an economy's gross domestic product experiences growth without a comparable reduction in unemployment—that began following the financial crisis of 2008 has also fueled this discussion. Since the introduction of new technology in the English textile industry at the beginning of the nineteenth century, people have been concerned that technology will hinder job growth. So far, however, this potential problem remains more specter than economic reality. Given this background, making a final judgment about technologies' negative impact on employment appears premature, but taking a look at arguments and rationales seems prudent.
Making a final judgment about technologies' negative impact on employment appears premature, but taking a look at arguments and rationales seems prudent.
In their 2011 book Race Against the Machine, Massachusetts Institute of Technology (MIT; Cambridge, Massachusetts) researchers Erik Brynjolfsson and Andrew McAfee posit that relentless advances in computing technology could lead to computers' replacing humans in classes of jobs that people once believed were wholly unsuitable for computers. The researchers argue that rapid technological improvements are eliminating jobs at a much faster rate than they are creating new jobs. Drs. Brynjolfsson and McAfee are not alone in perceiving a paradigm shift in technologies' impact on labor markets. MIT economist David Autor has argued that both high-skill and low-skill jobs are still being created but the jobs in between are vanishing. Antonio Regalado, business editor of MIT Technology Review, maintains that repetitive jobs and well-structured tasks are in danger of being automated.
Increasingly, observers look at underlying dynamics and structural effects of technologies in the context of commercial activities. W. Brian Arthur, a visiting researcher at the Intelligent Systems Laboratory at Xerox's (Norwalk, Connecticut) PARC (Palo Alto Research Center; Palo Alto, California) and former Stanford University (Stanford, California) professor, believes that advances in technology enable fewer people to do more jobs, which eliminates numerous jobs held by human employees. In his 2013 book Who Owns the Future? computer scientist Jaron Lanier claims that internet technology is jeopardizing the middle class by wearing away employment, job security, and "levees" that give the middle class economic stability.
The jobless recovery has driven conversations, and a look at employment data unveils nuances and points to dynamics that corroborate some of the experts' assumptions and expectations. The US health-care, retail, and information industries illustrate related developments in the marketplace. While overall health-care employment in the United States has been steadily increasing in the past five years, midlevel health-care jobs have been experiencing declines. For example, between 2010 and 2012, the number of licensed practical nurses decreased by 1.6%, and the number of medical transcriptionists decreased by 5%. The prospect of increasing demand and cost pressures are forcing providers of health-care services to demand more from the most- and least-skilled health-care workers, and automation appears to be eliminating many administrative jobs. Particularly problematic is the situation in retail. In the United States, fewer people are employed in retail now than in 1999, and those retail employees work fewer hours than did their 1999 counterparts. Economically, the development is worrisome because the retail sector employs so many people: 7.6 million salespeople and cashiers in the United States in 2012. Advanced logistics and online commerce have had a substantial impact on retail employment: "Twenty years ago, the shoppers went to the stores. Today, the stores go to the shoppers" ("Death of the Salesmen: Technology's Threat to Retail Jobs," Atlantic, 22 May 2013; online). According to the US Bureau of Labor Statistics (Washington, DC), even the information sector lost 750 000 jobs in the 2000s—more jobs than any sector other than manufacturing. The North American Industry Classification System—which government agencies use to classify businesses on the basis of their economic activity—defines the information sector as businesses engaged in "producing and distributing information and cultural products...providing the means to transmit or distribute these products as well as data or communications...and processing data." The information sector includes traditional publishing, which saw a 25% decline in jobs between 2001 and 2011. Given the growing popularity of online media, this decline is not surprising; however, online media generated fewer than 50 000 jobs during the same period—a number that amounts to about only 20% of the jobs traditional publishing lost. Perhaps surprising, the number of customer-service-representative jobs dropped by almost one-third because of automation and self-service, which calls into question hopes of growth in the service sector. Certainly surprising, though, is the telecommunications sector's loss of more than half a million positions because of wireless systems and labor-saving technologies.
The potential of emerging technologies and technologies that are currently diffusing in the marketplace to displace human workers creates a wide space for speculation about future developments. Disruptive technologies: Advances that will transform life, business, and the global economy, a 2013 report by the McKinsey Global Institute (McKinsey & Company; New York, New York), names automation of knowledge work as the second of 12 disruptive technological advances. Automation has already had a huge impact on manufacturing and transaction work, and advances in computational speed, machine learning, and natural user interfaces suggest that knowledge work will be affected next. Specifically, potential exists for increased automation in education, health care, drug development, general management, and law. Many of the other disruptions the report names—including mobile internet, the Internet of Things, and cloud technology—will certainly play a role in the automation of knowledge work. Information-technology-advisory company Gartner (Stamford, Connecticut) expects to see unemployment rise and social conflict emerge as technology replaces middle-class workers in specialized, high-income jobs that involve a number of back-office functions. And a group of researchers from the Oxford Martin School at the University of Oxford (Oxford, England) offers a particularly bleak outlook on employment opportunities, stating that 45% of jobs in the United States face substantial risk of being taken by computers within the next 20 years. Jobs in logistics, manufacturing, administration, sales, and construction will be first to see automation. Depending on developments in artificial intelligence, jobs in management, engineering, and the arts could be in jeopardy next. Employees' creative and social skills, though, could protect their jobs.