The Effects of Job Automation on the Economy

IEEE P<The Effects of Job Automation on the Econonmy>/D<3>, <February> <2009>

The Effects of Job Automation on the Economy

Prepared by:Gordon R. Bland Jr.

University of Old Dominion

Computer ScienceMarch 4, 2009

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Introduction

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1. Job Automation Economic Effects...............................................................................................................11.1 Negative Effects....................................................................................................................................1

1.1.1 Job Destruction...................................................................................................11.2 Positive Effects......................................................................................................................................2

1.2.1 Job Creation........................................................................................................2

2. Ethics of Automation....................................................................................................................................22.1 Profit......................................................................................................................................................22.2 Morals....................................................................................................................................................2

3. Annex B........................................................................................................................................................3

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The Effects of Job Automation on the Economy

1. Job Automation Economic Effects

With the increase of technology use in the workplace, humans have become obsolete for some jobs. Modern day automation has completely eliminated some production jobs whilst it has created jobs in new fields. With the freedom from mundane tasks because of automation, more creative tasks and jobs opened up. The jobs that are lost to machines then create new jobs for workers. Where a manual task was lost to a machine, jobs in design, manufacturing, and maintenance of the new machine may be created.

1.1 Negative Effects

Computers along with automation have caused a decrease in jobs that once required many workers. Factory lines have now replaced workers with robots that are more efficient and less costly. What once required hundreds of workers to produce, automated factories may employee only a handful of workers to produce the products. These workers no longer produce the product, but instead they manage the machines and monitor their production. Due to the destruction of some jobs and the evolution of others, a change in required skills for workers is becoming more and more important. At one time, a secretary may have been required to write in shorthand, whilst now, secretaries are typically required to type on a computer at an established minimum speed.

1.1.1 Job Destruction

As early as the 1800s, jobs have been lost to machines. A group of people known as the Luddites destroyed weaving looms in fear of loss of jobs in textile factories [B1]. Once again in the 1950s and 1960s, machines scared the human workforce.

In the 1950s and 1960s, automation was once again attacked. John F. Kennedy along with labor groups claimed the increasing unemployment was a result of the more efficient machines taking jobs of workers [B1]. A quote from a Times article in 1961 read, “Throughout industry, the trend has been to bigger production with a smaller work force. In the highly automated chemical industry, the number of production jobs has fallen 3% since 1956 while output has soared 27%,” [B2]. In Illinois, 315,000 were unemployed in 1961. According to Robert Johnson, the State Labor Director during that year, most of the unemployed were resultants of automation. [B2] Pennsylvania’s Congressman Elmer J. Holland said, “One of the greatest problems with automation is not the worker who is fired, but the worker who is not hired,” [B2].

1.1.1.1 Outsourcing of Jobs

In more recent times, unemployment has been blamed on outsourcing of jobs; however, some disagree. During a Global Media Summit sponsored by Rockwell Automation (www.rockwellautomation.com), Milwaukee, Dan Miklovic said, “Recent studies show that manufacturing jobs are declining everywhere,” [B3]. According to an article by Wes Iversen in 2004, U.S. manufacturing jobs declined by more than 11 percent from 1994-2004.

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1.2 Positive Effects

Computers mark a point of economic stability where tasks that are seen as a burden for humans have been eliminated. This has allowed more time for creative and intellectual thinking, which is not a necessity for life. New industries have been created for the production of computers and the machines that automate tasks. In factories, robots have replaced the human worker that can make mistakes. The cheaper robot saves companies money as well as produces higher quality products more efficiently.

1.2.1 Job Creation

Jobs for computer and machine repair have been created from the widespread use in industry. Computer repairmen have replaced the once needed job of typewriter repairmen. Factories now employee workers to repair machines that produce products as well as people to monitor the machines in various aspects of production. In 1961, it was recognized that the loss of jobs to automation would result in an increase in the service industry [B2].

While many jobs have been lost to machines, 309.9 million from 1993-2002, 327.7 million new jobs were created during that same time period [B1]. While that gave a net increase of 17.8 million jobs, during 2004 to 2014, the BLS projects that there will be another net increase of 18.9 million jobs with roughly half being seasonal jobs [B1].

As seen from statistics, it is apparent that jobs are continually created in place of ones lost as a part of an ever-evolving need for jobs due to new skill sets required from new technology. It is easy to attack technology when it comes to unemployment as economists lack imagination to see the new jobs that will be created [B1]. Technology when utilized correctly simply alters jobs and the paths they take. An example of this is during World War II, rooms full of workers sat at typewriters creating letters for government purposes. With computers, a few workers can replace what was once a large workforce, whilst new jobs are created to manufacture the computers, printers, and database servers. Workers are also required to fix these machines.

2. Ethics of Automation

Computers were first created to make tasks easier. Complex mathematical equations were made simpler through the use of algorithms based on Boolean algebra, whilst mundane tasks of filing information could be automated. No longer was a person required to have tangible materials to work with such as files, but instead databases allowed massive amounts of information to be stored in a smaller footprint.

2.1 Profit

Computers were originally created to make tasks simpler. In doing so, they proved to be more efficient and mistakes were less. Because of this, companies have discovered that automation can create a better product with fewer defects as the human element is absent and production time is shortened. With more products being produced with fewer workers, profit margins increased. From a company perspective, it was a no brainer to move towards automation and remove the weak link—humans.



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2.2 Morals

The drawback to automating companies is the removal of human workers from their jobs. Being human, morals come into play when a worker loses a job and they may not be able to support their children anymore. A “happy medium” must be reached sometimes in order to increase profit margins without ruining the worker’s lives.

3. Annex B

[B1] Baase, Sara. Gift of Fire. Upper Saddle River: Prentice Hall PTR, 2007.

Chapter 6: Work

[B2] "THE AUTOMATION JOBLESS - TIME." TIME.com. 24 Feb. 1961. 08 Feb. 2009

<http://www.time.com/time/magazine/article/0,9171,828815,00.html>.

[B3] "Outsourcing Not the Culprit in Manufacturing Job Loss | News |." Automation World. Jan. 2004. 08

Feb. 2009 <http://www.automationworld.com/news-414>.



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Documents

The Effects of Job Automation on the Economy