No, Technology Is Not Causing Unemployment,…


bread_line

A rather short but very revealing article recently appeared at Slate, “The Myth of Technological Unemployment” which pretty much lays to rest once and for all this notion that machines are the cause of people not working.

The argument goes as follows: as we load up on more and more computers, fewer and fewer people are needed to do the work as much of the work can be automated or managed by machines.

Not so, according to this study:

Machines are replacing workers, in other words, but they’ve been doing so since the cotton gin and the spinning jenny. Over the long run this leads to higher incomes and more leisure. But across short spans of time, the ups and downs in the level of employment and the number of hours available to people who want to earn more money is driven by the ups and downs of the business cycle.

So how is this derived? The numbers don’t lie:

…a chart of real output in the United States over the past 10 years compared to aggregate hours worked by nonsupervisory workers over the past 10 years. Both are indexed to 2001 levels. What you can see is that productivity increases are real (i.e., the red line of output grows faster than the blue line of hours worked) but that there’s tremendous co-variance between these series. The big rise and fall and rise again in output is caused by a big rise and fall and rise again in the amount of time people put on the job. Or alternatively, the big rise and fall and rise again in working time is caused by a big rise and fall and rise again in the amount of demand for goods and services.

So in effect, the more demand for good and services, the moe jobs, which makes sense. Can’t have jobs unless there’s a demand for work. No demand, no work. ‘But gee’ you say; ‘don’t; computers and machines make the difference? If there are more machines and computers then wouldn’t that meant that there are fewer jobs owing to them being eliminated?’

Nope.

Or stated more accurately, there isn’t a direct causal relationship between computers and jobs. statistically speaking, there’s more of a direct, strong relationship between whether or not the economy is going and any demand for more work and services:

In 2012, a lot of firms employed a lot of new labor-saving technology in order to increase profits. That’s true. But the same happened in 1992 and 1972 and 1952 and, for that matter, 1852. But whenever you have a prolonged labor market downturn, the salience of this fact increases and you start hearing more and more talk about how there isn’t as much need for workers anymore because of mechanization. In the contemporary context, people often use the word robots in this context because mechanization is obviously a trend that’s been going on for more than 200 years so robots makes it sound more plausible that something new has happened recently.

So all this talk about jobs not being there are not about a lack of computer skills on the part of the unemployed, or that there more and more computers doing the work of people: it’s just that economically speaking, things just plain suck.

Happy job hunting.

Click here to read the original article and to view the chart and analysis: (http://www.slate.com/blogs/moneybox/2013/01/15/the_myth_of_technological_unemployment.html)

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s