Technology Eliminates Jobs So Unemployment Rises

case #1

Sod cutting. 16 people gather sod and place on truck.

Enter automated sod cutter. Now only need 2 people.

Where did the 14 workers go?

To some other unskilled labor job if they are lucky to find any.

sod cutting

Before

AgfaPhoto

Before

sod cutting 2015

Now 2015. Two people only needed.

Case #2

Automated CNC milling machine. It used to take 6 workers to mill a large product. Now one can do it.

bridgeport mill

Mill – old style

milling machine guarding

After with CNC mill.

After farms were mechanized, Americans moved to factories. After manufacturing declined — in part due to technologies that dramatically cut the cost of shipping goods — we moved into services.

But new technologies have been eating away at services, too. Gas station attendants are long gone and telephone operators and bank tellers aren’t far behind. Endangered too are office clerks and secretaries, publishing jobs, and people providing any expertise or information that can now be digitized into a computer.

The introduction of assembly line production methods and the production of interchangeable parts resulted in a substantial increase in labor productivity. This technological innovation also resulted in an increase in the demand for unskilled workers and a decrease in the demand for skilled artisans. The introduction of automated manufacturing processes, on the other hand, has resulted in a decrease in the demand for unskilled workers and an increase in the demand for quality control technicians and computer programmers. In general, technological change will alter the composition of the demand for labor, raising the demand for some types of labor and reducing the demand for other types of labor. Those who lose jobs as a result of technological change that reduces the demand for that category of labor are said to be structurally unemployed.

Many companies beginning to discover ways to exploit better technology, in ways that often lead to displacement of existing workers (think of the growing ubiquity of self-checkout at drug and grocery stores

The evidence–more food, clothing, and television sets per person as well as the absence of twelve-hour workdays and six-day workweeks–suggests that gains from technological advancement have been taken historically as a combination of higher output and fewer inputs, but not involuntary reductions in inputs. Lured by increasing per capita output (reflected in higher real pay) and released by technology from household drudgery, women have entered the labor force in increasing numbers. On the other hand, the participation rate of men has decreased. Surely, if productivity continues to be enhanced through technology, both men and women will choose more goods and services as well as earlier retirement, prolonged education, and more leisure time. It is a dream of most people to be able to have the same or greater consumption ability while working only 20 hours per week or not working at all. Technological advancement is the essential element in reducing the burden of scarce resources.

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