Archive for the ‘Employment’ category

Technology and jobs

April 5, 2012

Ever since the Luddites were defeated in the 19th Century, we’ve pretty much assumed that technology creates more jobs than it destroys. Through most of the last 150 years technology has led to greater productivity in primary industries which in turn has created greater prosperity and a bigger demand for a wider range of goods and services.

But today the old rules don’t seem to apply. In just about every sector you look at, technology seems to be slashing the demand for labour.

The industrial revolution did liberate people from drudgery without causing mass unemployment, but early machinery was inefficient, unreliable and unintelligent. Most machinery needed constant supervision and maintenance. It often needed to be repaired and many simple finishing tasks still needed to be done by hand.

Now the reliability problems which plagued early factory machinery, motor vehicles and electronics are no longer a big issue. Modern machines can function without problems for long periods of time, and when they do breakdown, they can be repaired more quickly, thanks to diagnostic tools and modulated components.

Technology is also much smarter than it in the past. Machines and computers can be programmed to do a wide range of tasks and often reminds users when they need servicing. A single computer can now handle complex tasks that previously would have required a small army of clerks to complete.

These days just about sphere of economic activity is scientifically organised to run smoothly and efficiently. Vehicle maintenance is divided into a number of sub-specialties, like wheel balancing and tyre fitting, and most tasks can be completed quickly by semi-skilled workers. In the past such tasks were by a skilled mechanic who needed to know all aspects of motor vehicle repair, and rarely had the necessary parts in stock.

In recent times the construction and service industries have soaked up a lot of unemployment created by rising productivity and efficiency in other parts of the economy. But even in these sectors technology is steadily shedding labour.

Automated checkouts are reducing the need for retail staff and librarians. Online websites, ATMs and electronic ticketing are doing away with much of the need for bank clerks, ticket inspectors, travel agents, government clerks, and bricks and physical retail stores and warehouses. Pretty soon you’ll be able to buy a customised car and have it delivered to your door from a national delivery centre without visiting a show room. Construction is more resistant to change since most houses aren’t mass-produced, but CAD programs for architects, tool improvements and low-maintenance fabricated components are steadily reducing labour needs.

The health sector is regarded as a growing area of employment due to the aging population, but as health care becomes less affordable to access, there will be greater pressure to introduce more labour-saving technology to make it more affordable.

Of course, new technology is creating some jobs, but increasingly these are highly skilled jobs which only a small percentage of the population are willing or able to do. So with all this labour-saving technology reducing the total amount of employment in the economy, we need to reconsider how much economic activity we outsource to other countries.

One activity that I don’t think should be out sourced is call centre work. Not only does outsourcing call centre work destroy jobs, but it provides a poor service to the consumer. Discussing technical issues is difficult over the phone at the best of times, but discussing technical problems with people from a different culture who don’t even speak English particularly well is an exercise in mental torture.

Recently in Australia, redundant Westpac call centre staff have been forced to train up Indian workers who are going to replace them. This is not only de-moralising for staff, but from a wider perspective it’s long-term economic suicide.

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