The Undirect Impact of Technology on Employment

Technology has a huge role in a human life. It has been effecting and changing people’s lives since the beginning of mankind. Even though pace of technological development changed time to time, it has always been going forward. The most effective technological development that changed people’s lives very dramatically was the industrial revolution. 250 years ago machines working with steam power were invented and this development changed labor character in society totally. The relationship between technology and labor and impact of technology on employment is put into examination in this essay. In the studies of this relationship the most important part is the need for labor in the new technologies.

Most of the times new production technologies are not accepted by workers. Best example for this situation in history is the Luddist Revolutions. With the steam machines substituting qualified labor , they created an unrest among the labor force in England. Eventually workers started to destroy the machines and this reaction was the first protest against the new technological machines. With the new technologies implementation on many countries the working class started to lose their jobs or if they do not their jobs they started to get poorer. These reasons caused a widespread protests in the industrialized european countries . In the end those protests made no gain for the working class. All these incidents which took part in the beginning of industrial revolution were the messenger of the future social problems that technology will create.

Relationship Between Technology and Unemployment

The level of production technologies and consequently the productive forces in our age changes completely the relations of production. With changing production relations, capital and labor have reached new positions.

In the capitalist production, the structural changes which started after 1970s, both in developed countries and in developing countries caused a drastic change in relationship between labor and capital and related to this change it also caused a reconstruction of industrial relationships. In the background of those changes there were mainly two forces; international movement of capital and technological developments. The recent technological developments in information and communication sectors created a direct or undirect effect on efficiency of economic performance. There are mainly three opinions about technology’s effect on employment: positive opinion, negative opinion and neutral opinion which all have their own reasonable arguments.

Positive Opinion

Those who have positive opinion thinks that new technological developments should improve the working conditions and thus increase the efficiency. Also new technological developments should create new job opportunities by creating new sectors or expanding the existing sectors. Japan is a good example of a country with a high technology level. Even with their high technology level in economy Japan still can maintain high employment levels. According to this opinion, new technologies are not the reason why people lose their jobs, unlike if a country is not adapting to the new technological developments people who live in that country will lose their jobs by time. In England example it can be seen that, with England’s failure in the adapting new technologies they lost their competitive power and lose the markets which they had the power before and as a result they faced with a increasing unemployment. In this opinion, even the technological improvements can cause a job losses , the increasing productivity and increasing welfare will create new jobs, new sectors, new markets, new industries and new employment possibilities. Eventually the people who lost their jobs during the transition from old technology to new technology will find new jobs in the newly created sector.

Negative Opinion

In this opinion it is said that new technologies which takes place of human labor in the production process will cause a unemployment. Also recent technological developments constantly decreasing the usage cost of technology and increasing the cost of labor so preferences of employers are changing towards to using new technologies instead of employing more labor.

According to this opinion, for a production process both technology and labor are needed. Their proportions is depended on the technology level. Possibilities of substitution of technology to labor is a technological problem and producers choose the less costly labor-technology levels. With the technological improvements came in to the production process very rapidly, an automation process is created in the production and naturally labor usage is decreased thus unemployment started to increase and created a technological unemployment. This technological unemployment is a serious part of unemployment problem in the world now.

Neutral Opinion

In this opinion, two previous opinions are tried to be stabilized. According to this opinion effects of technological developments are related to the how the people that benefit from these new developments use them and what they aim by using these new technological developments. That is why it can not be said that technological improvements have effect for only one side. New technological developments will certainly effect the employment structure and employment levels but there is no direct relation between the technological development and employment.

To sum up those three opinions it can be said that, first effect of technological developments on labor is the effect which caused Luddist Revolts. New technologies destroy the jobs very fast by demanding more skilled workers and by causing less skilled workers to push out of labor force. Second effect can be seen in the technology, efficiency and employment relations. Technological developments are increasing the efficiency and lowers the labor demand in certain sector at certain level of production. Meantime these developments also decreases the costs and these decreased costs not only seen in the sector which technological development takes place, decreased costs can be seen all around the economy. That is the reason why new technological developments expand the markets by increasing production in very high rates. With the technological developments it can be seen that while many jobs are getting lost, many other are created in the same time.

Theories About Technology-Unemployment Relation

The automation era of production started when the technology became a important part of the production. Nowadays the world is in the third industrial revolution era which means that with couple of skilled technician a factory can work with full function. Within the framework of new approaches to the problem of unemployment, automation is the most important factor causing changes in the labor market. Rapid developments in the production technology after the Second World War increased the pace of automation production to take place of the labor force. Which eventually caused a increasing unemployment in 1980s in the Western Europe. But when this transformation researched, it can be seen that; in Britain between the years 1780-1988 the number of people working in agriculture decreased by half of their numbers. Also percentage of people working in agriculture in all labor force decreased from 50% to 2%. During these decrease the productivity of a worker increased 68%. This increase in productivity fueled the investments to the services sectors and production sectors. These two sectors developed very fast and created a job for who lost their jobs in agriculture. Another example is the USA; in 20th century the fascinating pace of technological transformation of American economy moved agricultural labor force almost as a whole but the job possibilities has increased from 27 million in 1900 to 133 million in 1999.

New technologies effects on employment levels are bad in the short term but in the long term as the quality of goods and services increasing, reducing costs, new products, investments in new technology it will be seen that the positive effects clears the negative effects.

When the factors of quality and cost of production that effect the competitive power considered fast technological developments will create more jobs than before in any economy. It is known that as the technology improves those who work in agricultural and production sectors will move to the services sector to work. The people which is not adapting to these changes will be face with the unemployment.

The development of services sector became more and more important in the late 1950s. In the year 1950 those who work in services sector exceeded those who work in production sector in USA made it clear that this tendency in the economies will continue and services sector will increase its importance.

Conclusions

It is totally normal that the most important factor in production ‘’the Labor’’ is seem it is surrounded by other factors in nowadays world. That is why the people had always been questioning that when the machines will take over all their jobs. It is so important question that many movies were made, many book were written about that subject. But it is important that people should not forget that machines are not the guilty, people who are not adapting and resisting to changes are the main problem in the labor force.

As it is seen in many countries the new technologies will destroy the existing jobs in the short term, but in the long term there will be probably more jobs created than before. Because mainly decreased costs and increased productivity will stimulate economic growth which would not be possible without the new technologies. As a result it can be said that technology may have a undirect effect on employment but it is not the main reason. 

References

1. Acemoglu, D., & Restrepo, P. (2019). Robots and Jobs: Evidence from US Labor Markets. Journal of Political Economy, 128(6), 2188-2244. doi:10.1086/705716

2. Autor, D. H. (2015). Why Are There Still So Many Jobs? The History and Future of Workplace Automation. Journal of Economic Perspectives, 29(3), 3-30. doi:10.1257/jep.29.3.3

3. Brynjolfsson, E., & McAfee, A. (2014). The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. W. W. Norton & Company.

4. Frey, C. B., & Osborne, M. A. (2017). The Future of Employment: How Susceptible Are Jobs to Computerization? Technological Forecasting and Social Change, 114, 254-280. doi:10.1016/j.techfore.2016.08.019

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5. Muro, M., Maxim, R., & Whiton, J. (2019). Automation and Artificial Intelligence: How Machines are Affecting People and Places. Brookings Institution. Retrieved from https://www.brookings.edu/research/automation-and-artificial-intelligence-how-machines-affect-people-and-places/