The disruptive power of technology in the job market
Technology Review, a product of MIT, explores the role that technology might be playing in the current unemployment crisis:
“The United States faces a protracted unemployment crisis: 6.3 million fewer Americans have jobs than was true at the end of 2007. And yet the country’s economic output is higher today than it was before the financial crisis. Where did the jobs go? Several factors, including outsourcing, help explain the state of the labor market, but fast-advancing, IT-driven automation might be playing the biggest role.”
As the piece acknowledges, critics have long worried that people displaced by technology would be unable to find work, and that worry has long proved groundless in the long term. As people are replaced by machines, other types of new jobs open up. But there are caveats to that process.
Those individuals who are displaced are often unqualified in terms of experience, training and education to take the new jobs. And there can be a significant lag in time between the erasure of previous jobs and the arrival of new jobs and industries, leaving hundreds of thousands if not millions unemployed in the meantime.
As the piece points out:
“… new research is showing that advances in workplace automation are being deployed at a faster pace than ever, making it more difficult for workers to adapt and wreaking havoc on the middle class: the clerks, accountants, and production-line workers whose tasks can increasingly be mastered by software and robots.
For example, research at MIT by Erik Brynjolfsson and Andrew McAfee took a closer look at employment patterns in the Bush era and found what they call a paradox.
“Even before the economic downturn caused U.S. unemployment to rise from 4.4 percent in May 2007 to 10.1 percent in October 2009, a disturbing trend was visible. From 2000 to 2007, GDP and productivity rose faster than they had in any decade since the 1960s, but employment growth was comparatively tepid.
Brynjolfsson and McAfee posit that more work was being done by, or with help from, machines. For example, Amazon.com reduced the need for retail staffers; computerized kiosks in hotels and airports replaced clerks; voice-recognition and speech systems replaced customer support staff and operators; and businesses of all kinds took advantage of tools such as enterprise resource planning software. “A classically trained economist would say: ‘This just means there’s a big adjustment taking place until we find the new equilibrium—the new stuff for people to do,’ ” says McAfee.
Beginning with Lewis Mumford, students of technology have long been aware of a lag that occurs between the development of a new technology and a culture’s ability to absorb and adjust to it. Brynjolfsson and McAfee point out that “whereas agricultural advances played out over a century and electrification and factory automation rolled out over decades, the power of some information technologies is essentially doubling every two years or so as a consequence of Moore’s Law.”
In other words, the pace of change has outstripped our ability to absorb it.
Technology also helps to explain the growing problem of income inequality, according to a study by MIT economist David Autor and David Dorn, an economist at the Center for Monetary and Financial Studies in Madrid. From 200-2005, they found, job growth occurred in lower-paying jobs and in higher-paying jobs, with not much growth in the middle, and the problem accelerated once the economy soured.
” … even as it gets crowded and potentially even less rewarding at the bottom, employees at the top are getting paid more, thanks to the multiplier effects of technology. Some 60 percent of the income growth in the United States between 2002 and 2007 went to the top 1 percent of Americans—the bulk of whom are executives whose companies are getting richer by using IT to become more efficient, Brynjolfsson and McAfee point out.
I think that’s a critically important point. Liberals and conservatives both tend to see such issues in moral terms. Many on the left, for example, read too much intentionality into the system, believing that the rich are somehow becoming richer because of efforts on their part to unfairly manipulate the system to produce that desired outcome.
Conversely, many on the right treat the economy as some arbiter of absolute virtue, believing that if the poor and middle classes are struggling it’s because they can’t match the work ethic of those who succeed. The possibility that in fact something more fundamental is going on, that the distribution of wealth is being driven by deeper forces we neither recognize nor control, doesn’t seem to register.
– Jay Bookman
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© 2012 The Atlanta Journal-Constitution
463 comments Add your comment
Paulo977
January 10th, 2012
1:06 pm
First!!!
Jm
January 10th, 2012
1:08 pm
Technology review rocks, live the thing
People should read the articles on innovations too
Yes, technology is causing far more labor disruption than global trade
Though we still need to whack the Chinese
Jm
January 10th, 2012
1:12 pm
“live”, dernit. Love
First! With content more intelligent than “first!!!”
Keep Up the Good Fight!
January 10th, 2012
1:13 pm
Very true Jay. Technology advances far outstrips our ability to absorb and to keep up on so many fronts.
Joe Hussein Mama
January 10th, 2012
1:13 pm
Best!
getalife
January 10th, 2012
1:14 pm
Outsourcing and globalization might have something to do with it too.
Then there was the global economic collapse and corporate power rigging our government.
Factor in all these facts and you get a younger generation stuck with no jobs and the bill.
Jm
January 10th, 2012
1:14 pm
Education investment
Improved testing standards and improved teacher quality, and continuing education for adults are the key
Doggone/GA
January 10th, 2012
1:17 pm
“Many on the left, for example, read too much intentionality into the system, believing that the rich are somehow becoming richer because of efforts on their part to unfairly manipulate the system to produce that desired outcome”
I think there’s more intentionality that you are willing to see. If the automation produces greater productivity by the workers on the line, but they are not getting paid an increased wage to reward that great productivity…then, yes, the system IS being manipulated to “produce that desired outcome”
Redneck Convert (R--and proud of it)
January 10th, 2012
1:20 pm
Well, I don’t know about you but I worry alot about technology putting me out of a job. Every time one of them trade shows goes on I halfway expect to see somebody come up with a computer that a user can get beer piped out of. If it ever gets to the point where people can get soused just by touching a key on a computer I’m ruint. And the worst part is, old drunks like getalife would be on a blog like this 24 hrs. a day. Touch—guzzle—sass. Touch—guzzle—sass.
Just look what happened to regular newspapers when the innernet tubes started. People would rather pay 50 bucks a month to be able to read the news than have to get into a robe and a pair of bedroom slippers to pick up the newspaper on the driveway. And with a computer you can blast a paper back.
Anyhow, you better be scared of technology. Have a good p.m. everybody.
larry
January 10th, 2012
1:21 pm
” Welcome , my son, welcome to machines”
http://www.youtube.com/watch?v=qHnRfw9qqvk
Jm
January 10th, 2012
1:21 pm
Redneck
See “stats”
Peadawg
January 10th, 2012
1:22 pm
Forget Bush, the housing market, Iraq, regulation…the cause of higher unemployment and income inequality is TECHNOLOGY.
Damn those ATMs!!!!!!!!!!! Damn those who want to do things more efficient. Is someone going to come back from the future to help save us from the technology takeover?
getalife
January 10th, 2012
1:22 pm
RC,
Again, I don’t guzzle that cheap swill you are pushing.
I sip on Crown .
The good stuff.
Libertarian
January 10th, 2012
1:23 pm
And where is all this technology made? Not here.
stranger in a strange land
January 10th, 2012
1:25 pm
Let OWS people have their way: soon we’ll all be back to making it on subsistence living. Problem solved.
getalife
January 10th, 2012
1:25 pm
Pea,
To be fair, Jay has opined on those other things you mentioned but technology is added.
Normal
January 10th, 2012
1:26 pm
I remember this TV show a few years back…don’t remember the name, but it’s premise was, i believe, that three kids somehow jumped into alternate universes, or something like that. Anyway the one I remember the most was a “universe” where technology was outlawed. Even things like digital watches had to be replaced by the old main spring and jeweled ones. Cops rode horses, shops had manual cash registers, etc. technology had become so imbued into the society that no one had jobs, so they went back to the “old ways”….
Who knows, maybe this is what people are really wishing for when they say they want the “’50s” back again…
What are you talking about?
January 10th, 2012
1:26 pm
Jay is really grasping at straws. Jay should stop lying.
larry
January 10th, 2012
1:27 pm
Is someone going to come back from the future
Crap , where’s the DeLeoran ?
Jm
January 10th, 2012
1:27 pm
CEOs aren’t the only ones benefitting
Consumers benefit immensely
Ie you and me
Kamchak
January 10th, 2012
1:27 pm
Improved testing standards…
Still doesn’t address the underlying problems with standardized testing. If teacher performance is measured by test scores, teachers will teach the test and not the material.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
getalife
You are very gracious in defeat. Many drunks last night targeted you and not LSU.
Peadawg
January 10th, 2012
1:28 pm
Where’s Arnold when you need him? He needs to come back and save from all this horrible technology.
getalife
January 10th, 2012
1:29 pm
Thanks Kam,
The locals are upset that Miles did not give Lee a chance in the second half like he did for Jefferson in the first game.
They have a point.
larry
January 10th, 2012
1:30 pm
I think i found it .
http://www.youtube.com/watch?v=wFaXTcR4dtE
getalife
January 10th, 2012
1:32 pm
doomy was hammered last night.
Keep Up the Good Fight!
January 10th, 2012
1:35 pm
Jay is really grasping at straws. Jay should stop lying
One post fits all blogs Robot Troll?
moonbat betty
January 10th, 2012
1:37 pm
Just join the union.
getalife
January 10th, 2012
1:39 pm
Robot trolls will end humanity.
Kamchak
January 10th, 2012
1:40 pm
doomy was hammered last night.
As was T B G.
If you can’t handle your rum and tequila shots T B G, turn off the computer and STFU before you really make an ass of yourself.
Just sayin’.
getalife
January 10th, 2012
1:44 pm
Kam,
Bro stayed up and watched it and was the gentleman in victory.
He said I still have the Saints so all I can say is Who Dat?
Mary Elizabeth
January 10th, 2012
1:48 pm
“The possibility that in fact something more fundamental is going on, that the distribution of wealth is being driven by deeper forces we neither recognize nor control, doesn’t seem to register.”
———————————————–
It does register, and you have highlighted some excellent points. However, that does not to deny the fact that there are ideological agendas at work in our nation which have created a culture in which “the rich are . . . becoming richer because of efforts on their part to unfairly manipulate the system to produce that desired outcome.”
Both technological change and ideological force can be at work, simultaneously, and I believe that they are, which only compounds the income disparity and class disparity present in our nation today.
AmVet
January 10th, 2012
1:50 pm
Right after I got out of the service, I got a job with a big computer company. This was in the late 70s when all things technological were really starting to replace the things electromechanical.
And due to extensive training by Uncle Sam, I was perfectly set to transition into that era of “minicomputers”, etc. (Which by the way, were bigger than a refrigerator on it’s side back then!)
But alas, a whole bunch of the older guys in those companies were not, and it was obvious to me that they were not going to make in that brave new world.
But, now even highly qualified veterans are having a helluva time finding those good jobs. Even in high tech fields.
And the corporate destruction of capitalism and the expanding war on the middle class have GREATLY exacerbated the problem…
Kamchak
January 10th, 2012
1:51 pm
getalife
SoCo/Bro’s a class act.
Guy Incognito
January 10th, 2012
1:54 pm
Can we please throw all computers into the sea so that the typewriter repair folks can get their jobs back? Steve Jobs and Bill Gates were/are bullies. So mean-spirited
P.S. Think of all the carier-pigeon breeders and trainers who would have jobs, as well, since we couldn’t email anymore
getalife
January 10th, 2012
1:55 pm
“SoCo/Bro’s a class act.”
Yes, I remember telling him his first name “Angry Black Man” did not reflect his writings.
Nothing angry about him.
Finn McCool
January 10th, 2012
1:56 pm
200 – 2005??
Stevie Ray
January 10th, 2012
1:57 pm
JAY,
Wow, great column that may quiet all the RED vs BLUE crap about unemployment. Just think of all the affected industries…healthcare (radiology makes most diagnoses now/pharma), book, clothing and most retailers, travel agents, insurance agents, auto manufacturing (huge impact), mining, mail, entertainment, banking, investment, the list goes on and on….Another example why no way the FED’s et al can spend our way out of this problem…more wasted money used to further political careers…and nothing else..
markie mark
January 10th, 2012
1:58 pm
Excellant article, and very effective conclusions, Jay.
Keep Up the Good Fight!
January 10th, 2012
1:58 pm
Throw all computers in the sea?
That seems to be the Republican approach to regulation. As technology changes our laws and regulations must also.
getalife
January 10th, 2012
1:59 pm
My one and only corporate job was not lost to technology, it was lost to China’s cheap labor costs.
Kamchak
January 10th, 2012
2:01 pm
Can we please throw all computers into the sea…
When computers are outlawed, only outlaws will have computers.
RT1000
January 10th, 2012
2:02 pm
Liberals are dumb.
Stevie Ray
January 10th, 2012
2:02 pm
AMVET,
“And the corporate destruction of capitalism and the expanding war on the middle class have GREATLY exacerbated the problem…”
Dramatic cop-out IMO. Capitalism is no where near destroyed and there is not formal war on the middle class. Technology has much more impact on whatever you deem the middle class than others waking up every morning trying to figure out ways to screw this segment. What is destroyed is the credibility of our government which is controlled by .025 of the population. We can’t spend or entitle our way out of the current situation. What is your suggestion?
Stevie Ray
January 10th, 2012
2:09 pm
GETALIFE,
Sorry about your job loss…it’s unfortunate that the same job can be done so much more cost efficiently overseas for whatever reason. Our global business trade partners laugh at us…we let anything they produce flood our markets but do not enjoy the same in return. Seems that we consumers do get significant benefit from cheaper goods…..they giggle at our unionized, expensive systems, the standards of living manufactures must finance, and the protection they get from the politicans they purchase…
Not to mention that our technology is stolen and exploited by China et al…I’d be laughing too if I were them…kinda like the Russians and Chinese who apparently got the best return on US investment and lifes sacrificed for IRAQ..
Guy Incognito
January 10th, 2012
2:11 pm
Can we please also outlaw the modern dairy? There are so many butter-churners who need that steady income!
Adam
January 10th, 2012
2:12 pm
Honestly I’m not sure this is any more true than it was 10 years ago, but I could be wrong. I will read this study thoroughly before I make a final comment but to me it seems like a gradual process every since we developed machines, and it got worse after the internet/mobile device boom but I am not sure it is one of the larger components of job loss.
kayaker 71
January 10th, 2012
2:14 pm
Before we go back to dial telephones, Smith Corona typewriters and party lines, can you imagine most of the “like” generation giving up their I Pads and i Phones, just so some middle class guy could get a job? The American consumer is a cruel judge of what survives in this country….. don’t forget it. And they would not, for a New York minute, give up what they feel is essential in their lives just to benefit the job market.
So are you saying, Mr. Bookman, that it is capitalism’s fault that the middle class is” being destroyed” or are you saying that it is the fault of our excellence in technology advancement…. or neither.
Logical Dude
January 10th, 2012
2:16 pm
Forecast:
“FAIR TAX” would put millions of tax people out of work.
Electric cars will put millions of oil change folks out of work.
Voice Recognition software will (or already has) put millions of phone support folks out of work.
Quick, what will these millions of people do?
(and I use “Millions” very loosely here)
Guy Incognito
January 10th, 2012
2:16 pm
Those two big meanies, Edison and Tesla. Electricity has unemployed so many people:-((((((( Solidarity to my candle-making, and olive-oil lantern filling brothers and sisters. I’m fightin for you!
Jm
January 10th, 2012
2:17 pm
Technological advancements should be celebrated
But to the extent possible (no easy answers though) society should look to help people make the transition to a new career