What has been the impact of technological change on workers? To what extent do the benefits outweigh the costs?

Running Head: What has been the impact of technological change on workers? To what extent do the benefits outweigh the costs?

 

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Introduction

Discussion

Conclusion

 

 

 

 

 

 

 

 

 

 

 

 

 

Introduction

In the recent years, much focus has been directed on the impact of technological change on the work force. Such technological change or innovations include industrial robots, CAD (Computer Assistant Design), manufacturing systems that are very flexible, CAM (Computer Assisted Manufacturing), and communication systems that are highly advanced to mention but a few.  These technologies often slot in low cost and yet powerful microelectronics devices capable of increasing productivity both in industrial production as well as office tasks. The appeal of such technologies is widespread and is being used throughout the universe (Caselli, 1999, p. 102). Even so, there are differing views about the implications of technological change in regard to employment. A number of analysts are of the opinion that there is an unprecedented acceleration in the pace of technological change. This rapid change according to some experts has culminated to lose of jobs for thousands of workers both in offices and plants, especially the introduction of innovations that are geared towards laborsaving. There is a consensus  among these experts that the recent technological changes represent a sharp contrast from changes that took place in the past, adding that there is an urgent need to design measures for purposes of upholding job security. Other analysts, on the other hand, emphasize that there are numerous benefits that are brought about by technological change to all groups within the general public (Katz and Murphy 1992, p.35). To them, changes are not revolutionary but rather they are more evolutionary in nature and as such technological change and technology in general generate more jobs contrary to beliefs that technology reduces job opportunities.

It is without a doubt that technology and technological advancement has had the most profound consequence particularly on varying the duties and responsibilities that human beings perform in their professions. There has been a long speculation by economist on how technological changed affects both the relative demand for various types of labor force as well as the total demand for labor force in general. It has become a consensus among economist and commentators in the resent years that the demand for labor has been greatly affected by technological changes. Such technical change has resulted to a decrease in the demand for unskilled and less-skilled labor, and an increase in the demand for skilled labor. Consequently, future prospects of employment opportunities for the less skilled labor force are buried (Levy and Murnane, 2003,p .43). It is worth noting that there is a general consensus among commentators regarding the current technological changes that such changes has opened up better possibilities for the future. As a matter of fact, the change in technology especially at workplaces has increased productivity which in turn has added enormous value to various states. Even though technological changes have brought with it numerous benefits and value to different states, such value has been achieve at a cost.

Discussion

It is worth noting from the onset that evaluating the impact of technological change is very multifaceted. This may be so since changes in technology are affected by, and interact with, patterns of consumption, international competition, change in output, and other aspects. What is clear however, is the fact that there exist a relationship between technological change and employment. In many industries the pace of introducing technological change seems to be acceleration. These industries are introducing new technologies in an effort to modernize their methods of production not only for purposes of enabling them compete favorably in the local and international market, but also to reduce their costs of production. Study shows that technologies such as industrial robots, CAD (Computer Assistant Design), manufacturing systems that are very flexible, CAM (Computer Assisted Manufacturing), and communication systems that are highly advanced are extensively being introduced in industries such as  banking, metalworking, motor vehicle and steel industry a move that has tremendously  increase their productivity (Katz and Murphy, 1992, p.44).

There are generally few employees who have lost their jobs because of changes in technology. Some experts postulate that when the economy is strong, the introduction of new technology or technological change can be very consistent with minimal displacement of workers and high levels of employment (Goos and Manning, 2003, p.22). Moreover, most industries generally spend on new technology when there is a considerable growth in employment and economic expansion. Supporting this view, Card and Lemieux, (2001, p.13), postulate that in the 1950’s when computers were introduced in the United States for purposes of office data applications, there were predictions by some experts that a huge number of kindred and clerical workers were likely to lose their jobs, and that other job opportunities would be curtailed by such an introduction. Nevertheless, there has been an increase in the employment of clerical workers over the past few decades. In fact, over the last decade the growth in employment opportunities within the economy of the United States there was a rapid growth clerical works in both relative as well as absolute terms.

It goes without saying that the introduction of new technologies such as microcomputers makes it possible to perform tasks that were previously impractical in the sense that such tasks were time consuming and too costly to perform. Technological change allows workers particularly those performing the management function to prepare analysis and reports that in the past would have been very expensive. Thus the introduction of new technology increased the range of activities for different industries and players in the economy, creating numerous opportunities for employment.

In addition, new job opportunities emerged because of the introduction of new technologies such as microcomputers. Such occupations include among others; programmer, tape librarian, keypunch operator, systems analyst, and console operator. Computer industries were set up to produce more computers not to mention the other industries that were set up to produce related equipments. All this industries generated employment opportunities for many workers in different areas. Analysts of technological change are of the view that there is need for industries and firms to institute viable strategies to train their employees to enable them embrace new technologies whenever they are introduced.

In the words of Berman, (1998, p. 1246), technological change also brings about increased productivity and boost efficiency in different activities that workers undertake. Undeniably, technological changes have a positive impact on the growth in productivity of a given industry. This is because with new technology such as CAM, CAD, robots, and other advanced technologies are capable of reducing the unit of labor required for production.  There is a change in the structure of occupations due to the new technologies. The groups that are increasing in importance because of technological change include: computer systems analysts, and programmers, technical and Professional workers, to mention but a few. In addition, technological change is also modifying the content of jobs.

There seems to be an agreement among economist in the recent years that the impact of technology has had a positive influence in terms of the increase in the total demand for labor force. In the argument postulated by Acemoglu, (2000, p.52) this is explained by the fact that there has been a massive increase in the real wages of workers and no distinct trends in the rates of unemployment have been directly linked to technological changes over time. Nonetheless, it is pertinent to mention that whenever changes take place, there are those who are favored by such changes and those who suffer as a consequence. Technological change is no different from other changes and as such there are those who lose their jobs and others who are favored by such changes. Those who suffer out of the changes are often given more attention and sympathized with than the beneficiaries of technological change.

A good example to illustrate the foregoing argument of technological change can be found in the introduction of the mechanical loom which came to being at the begging of the nineteenth century. The introduction of mechanical loom brought about tremendous increase in the output in weaving. Consequently, increasing by far the output that could have been produced manually by a weaver and the cost of clothing reduced. According to Johnson, (1997, p. 44), the lower cost of clothing further resulted to a rise in the demand for clothing; nonetheless, this demand for clothing was not sufficient for purposes of retaining all weaving jobs that were previously in existence. As a result, there was a striking decrease in the job opportunities for weavers, particularly amongst those weavers who did not embrace the new technology and continued with their traditional hand-loom. Most of those weavers who lost their employment owing to the introduction of mechanical looms lost their source of income and poverty became rampant amongst them. The hand- loom weavers therefore, became the most visible losers in regard to the introduction of the mechanical loom technology and their misfortune was associated with the new technology.  But the beneficiaries of the introduced technology were harder to spot. The decrease in the cost of producing cloths led to a reduced price in clothing and as such, a majority of people had an extra coin to spend on other things apart from clothing, increasing job opportunities geared towards the production of those other goods and services (Jerome, 1997, p.28).

According to Goos and Manning, (2003, p.18) the cost of technological changes is loss of jobs. Technological changes that are geared towards labor saving have eliminated job opportunities and are continuing to decrease employment opportunities in the job sector as a whole. The accelerated technological change is therefore perceived by a number of commentators as a move towards an eventual elimination of job opportunities in the job sector (Goos and Manning, 2003, p.24).  In his argument, Hecker, 2004 warn that, with the current state of technological advancement, the market place will fall short of adequate work opportunities for purposes of keeping the population engaged. Perhaps one of the renowned proponents of the fact that technological changes reduce the general demand for work force is Karl Marx. In his argument, Marx, 1965, postulated that there is a very big possibility of a double fall in wages during the process of development. The first fall in wage according to him is relative and in proportion to the general wealth development; secondly, the fall in wage is also absolute following the fact that the quantity of commodities received by the workers in exchange continues to reduce (Krueger, 1993, p.36).

The link between technological change and wage inequality among workers has raised concerns among labor economist. Study shows that technological change has contributed greatly in the wage inequality in the labor market particularly the development or introduction of microcomputers in the labor market (Berman, 1998, p. 1258).Confirming this fact Kutz, (1999, p. 43) postulate that in the early 1980s there was an increase in the wage inequality which was as a result of the invention of microcomputers just a few years earlier. It has also been suggested that another factor that can explain wage inequality as a result of technological change is the fact that unlike less-skilled workers, the highly skilled workers are more likely to make the most of computers at their jobs (Hounshell, 1994, p.23). Basing on the aforementioned facts most of the literature regarding wage inequality seem to unanimously concur in the fact that following the invention and eventual introduction of new technology especially microcomputers, led to a relative increase in the demand for workers who were highly skilled. Consequently, there was a dramatic increase in the earning inequalities. Needless to say, this hypothesis that the introduction of new technological change brings about an increase in the demand for workers who are highly skilled, which in turn culminate to an increase in the wages disparity has often been referred to as the SBTC (Skill-Biased Technical Change) hypothesis (Berman, 1998, p.1256).

Conclusion

Indeed, there are a number of benefits that technological change has on workers. From the foregoing discussion, the benefits of technological change outweigh the costs that that accrue. Some of the technological changes that have been witnessed in the past few years include among others CAM (Computer Assisted Manufacturing), industrial robots, CAD (Computer Assistant Design), communication systems that are highly advanced and manufacturing systems that are very flexible. Some experts postulate that there are a number of benefits that are brought about by technological change to all groups within the general public. To them changes are not revolutionary but rather they are more evolutionary in nature and as such technological change and technology in general generate more jobs contrary to beliefs that  technology reduces job opportunities. Critics of technological change on the other hand urge that technological change has instead lead to lose of jobs for thousands of workers both in offices and plants, especially the introduction of innovations that are geared towards laborsaving. Some of the benefits of technological change includes among others to enable workers particularly those performing the management function to prepare analysis and reports that in the past would have been very expensive. It has also been suggested that when the economy is strong, the introduction of new technology or technological change can be very consistent with minimal displacement of workers and high levels of employment. Moreover, most industries generally spend on new technology when there is a considerable growth in employment and economic expansion (Brenham, 1999, p. 330).

It is worth noting that there is a general consensus among commentators regarding the current technological changes that such changes has opened up better possibilities for the future. As a matter of fact, the change in technology especially at workplaces has increased productivity which in turn has added enormous value to various industries. Introduction of new technologies such as microcomputers makes it possible to perform tasks that were previously impractical in the sense that such tasks were time consuming and too costly to perform (Wolff,1996, p. 34). In addition, new job opportunities are likely to emerge because of the introduction of new technologies such as microcomputers. Such occupations include among others; programmer, tape librarian, keypunch operator, systems analyst, and console operator. Thus the introduction of new technology increases the range of activities for different industries and players in the economy, creating numerous opportunities for employment. In addition the impact of technology has had a positive influence in terms of an increase in the total demand for labor force (Bresnahan, 1999, p. 392).

Critics of technological change, however, argue that technological change has contributed greatly in the wage inequality in the labor market particularly the introduction of microcomputers in the labor market. The accelerated technological change is therefore perceived by a number of commentators as a move towards an eventual elimination of job opportunities in the job sector. Other critics have even warned that, with the current state of technological advancement, the market place will fall short of adequate work opportunities for purposes of keeping the population occupied. To a greater extent therefore, technological change has brought more benefits to workers which outweighs the cost.

 

References

Acemoglu, D. (2000). “Technical Change, Inequality, and the Labor Market.” Baltimore:   Johns Hopkins University      Press.

Berman, E. (1998). “Implications of Skill-Biased Technological Change: International     Evidence,” Quarterly Journal of Economics, 113(3), 1245 – 1279.

Bresnahan, T. (1999). “Computerization and Wage Dispersion: An Analytical       Reinterpretation” Economic Journal, 109(1), 390 – 415.

Caselli, F. (1999). “Technological Revolutions.” American Economic Review, 89(1), 78 –           102.

Hounshell, D. (1994). From the American System to Mass Production, 1800-1932: The

            Development of Manufacturing Technology in the United States, Baltimore:            Johns Hopkins University      Press.

Johnson, G. (1997). “Changes in Earnings Inequality: The Role of Demand Shifts,” J     ournal of Economic Perspectives, 11(6), 41 – 54.

Krueger, A. (1993). “How Computers Have Changed the Wage Structure: Evidence        from    Micro Data,” Quarterly Journal of Economics, 108(1), 33 – 60.

Katz, L. & Murphy, K. (1992). “Changes in Relative Wages, 1963- 1987 – Supply and     Demand Factors,” Quarterly Journal of Economics, February, 107 (1), 35–78.

Jerome, M. (1997). “Technological Change and Employment: Some Results from BLS   Research,”             Monthly Labor Review, 110 (4), 26–29.

Wolff, E. (1996). “The Growth of Information Workers in the U.S. Economy, 1950-1990:    The Role of Technological Change, Computerization, and Structural Change,”    C.V. Starr Center for Applied Economics, New York: New York University press.

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