The Luddites Are Almost Always Wrong: Why Tech Doesn't Kill Jobs

Mystakaphoros writes "Mike Masnick of Techdirt argues that we can all put down our wooden shoes and take a chill pill: technology 'rarely destroys jobs.' For example, telephone operators have largely gone by the wayside, but a (brave) new world of telemarketing and call center support jobs have opened up because of advances in technology, not to mention the Internet. Masnick points out writing from Professor James Bessen that makes the same point: 'In other cases, technology creates offsetting job growth in different occupations or industry segments. For example, word processors and voice mail systems reduced the numbers of typists and switchboard operators, but these technologies also increased the number of more highly skilled secretaries and receptionists, offsetting the job losses. Similarly, Amazon may have eliminated jobs at Borders and other national book chains that relied on bestsellers, but the number of independent booksellers has been growing and with it, more jobs for sales clerks who can provide selections and advice that Amazon cannot easily match.' That said, I think it's worth asking: if machines are going to replace all our fast food workers, are we going to start paying our gourmet chefs minimum wage just because we can?"

Comments

Sure, to lower paying jobs

[dontbgay]

The article is absolutely correct. But it also fails to take into account that the new jobs are lower paying while inflation decreases the value of the new wages.

Re:Sure, to lower paying jobs

[Cornwallis]

"...telephone operators have largely gone by the wayside, but a (brave) new world of telemarketing and call center support jobs have opened up because of advances in technology, not to mention the Internet."

Not exactly a selling point! In years past, the telephone operator wasl almost a family member in small town America. They were helpful - even in the big city. Telemarketers and call center support staff are almost universally loathed.

Re:Sure, to lower paying jobs

[Mystakaphoros]

And what happens when McDonald's introduces an automatic fry-cooker, or a machine that makes hamburgers? Just because we currently have a lot of low skill service jobs now doesn't mean that they won't be replaced by technology in the future. With the advances in robotics we can all see where this is going.

Let's assume we can separate all cooks into Grade-A, Grade-B, Grade-C, and Grade-D cooks. Grade D cooks haven't spent much time practicing cooking, and are just barely good enough at it to get a job at McDonald's, while higher grades have worked longer and harder to acquire skills. A machine comes along and replaces all the Grade D cooks. They're pissed that they don't have a job, but they haven't really sunk much time into it, so they go find a different job. But now a machine comes along and replaces the Grade C cooks. A few may just be naturally talented, but by and large they've spent a lot more time (that they can't get back) training to be better cooks.

So they go to look for a new job as a pencil pusher, and sure enough, there are Grade A-D pencil-pushing jobs. Well, there were, except the grade-D pencil-pushing job has also been mechanized. Only people who start off with enough experience to get a Grade C job can get it.

So now we have someone who has trained, but their training is no longer useful. And to compound the problem, we put the onus (and the financial burden) on this person to get themselves retrained, assuming they even have the natural abilities to be a pencil-pusher.

Thankfully, technology has created a new job: computer developer. But this job only starts at Grade B, and then you can go to A and A+. To get to Grade B you need training, education, and experience, and all of that you are expected to acquire on your own time at your own expense. Also, since all those Grade-C and B pencil pushers are out hunting for work, there's increased competition, which means that employers can get you for less. So more training, but lower wages.

Re:Sure, to lower paying jobs

[OzPeter]

The article is absolutely correct. But it also fails to take into account that the new jobs are lower paying while inflation decreases the value of the new wages.

This.
 
I can't remember the source, but recently I saw a graph that showed a timeline of $US minimum wage vs inflation. Up until the the 80's or 90's the minimum wage was keeping track with inflation, but after that it flattened off. So inflation kept on going up, but the minimum wage stayed the same.

If the US minimum wage had kept track with inflation, then it would be around $13/hr or $14/hr right now. Interestingly the Australian minimum wage *is* around $14/hr

Re:Sure, to lower paying jobs

[rufty_tufty]

Any job is/becomes a minimum wage job if it meets any of the following criterion:
1) It takes relatively little training, i.e. replacements can be brought in rapidly.
2) It is a skill that is common, either because of a good education system or desirability of the task(mostly just a re-phrasing of 1)
3) The people once employed do not have much incentive to move on: i.e. they won't leave if conditions deteriorate

The capitalist in me says this is fine* as long as the minimum wage provides a basic level of acceptable living**. If you wish to have more than the minimum it is then up to you to do a job that is either undesirable or one that is both highly & unusually skilled. Alternatively if the problem with that sector is that the business owner is skimming off the profits then it is up to you to challenge that and become a business owner yourself***; take the risk and make the investment or stop complaining.
Look at some of the most successful tech companies and I don't think it is any co-incidence that they put a lot of effort into making sure 3 is not a factor by trying to have good working conditions. They need to do this because !1 is such an issue for them.

* If the employer can't afford to pay the minimum wage then capitalism should kick in and mean that they don't employ someone for that role because it is not worth it for society to do so.
** I do not believe this is the case and this needs to change. Acceptable minimum to me includes healthcare, pension and ability to support a basic family.
*** There are some sectors where again this is not an issue, one man can't decide to become the next Apple, but there are always ways into a sector if you have idea and skills and luck and are prepared to take the risk.

Re:Sure, to lower paying jobs

[jon3k]

Please provide source that ALL new jobs created from technology create lower skilled mew jobs.

Re:Sure, to lower paying jobs

[mhajicek]

I took my family to a Chili's last week, and they now have a touch screen pad on the table. It performs some of the tasks of the server, allowing them to employ fewer servers.

Re:Sure, to lower paying jobs

[ILongForDarkness]

Your right about the hierarchy. Sometimes technology focuses on the high end though just because that is where labor is really expensive. So say the very well paid automotive or naval welders. Auto industry has the money and the financial incentive to get people off their pensions and other benefits so they drop the $3M for a robot that someone welding dinky cars would just outsource.

In short you can't even feel safe if you are an A level cook dealing with truffles and such all day. Someone realizes you are wasting 10% of an ingredient that costs $300/lb and comes up with a machine to process it instead. You are now a line cook placing prepped meals onto plates and doing the final saucing.

Programming can become less lucerative for employees over time for example and I suspect our days of great salaries are numbered. Paying $300 for a piece of boxed software every few years is much more profitable for a company than selling an Office Online for ~$5 a month and being required to keep servers up and running and constant updates to compete. These "efficiencies" will be translated down the hierarchy to ultimately being able to spend less money on paying staff well.

Heck if you think tech hasn't hurt peoples jobs prospects just look at the DOW "industrial" average, it is now made up of ~75% non manufacturing jobs a lot of those probably have lots of good jobs but their bottom rung is probably much lower than the bottom rung was for a DOW industrial company back in the day (say Walmart, Visa, Home Depot for example).

Re:Sure, to lower paying jobs

[h4rr4r]

4) the job is mistakenly classified this way.

Call center work is a great example of this. Can any idiot do it? Yes. Should he? No. In a normal call center you have hundreds of folks and small percentage of them take half of the calls or more. Those folks end up leaving since they can. This kills profitability.

If instead you pay a little more, you can hold onto those good workers and have maybe 20% of the head count you had before and increase profitability.

Low wage high turnover jobs are often like this. Employees that can leave will, the employer has high costs for turnover reasons as well as high head count and instead of doing the logical thing and finding better workers he instead keeps lowering pay and hiring more people.

Re:Sure, to lower paying jobs

[jenningsthecat]

Also, since all those Grade-C and B pencil pushers are out hunting for work, there's increased competition, which means that employers can get you for less. So more training, but lower wages

More, (and more expensive) training required for jobs that pay ever-decreasing wages is an across-the-board trend. If you wonder why the middle class is disappearing, look no farther.

The growth in productive capacity of mankind - the efficiency with which we grow and harvest food, take ore and oil from the earth and process it into fuel and manufactured goods, etc, has far outstripped our population growth. Yet we have growing economic uncertainty and a shrinking middle class coincident with a period of unprecedented per capita productive capacity. Why is this so? The sound-bite answer is "concentration of wealth". The complete answer is incredibly complex - historical events, human nature, natural laws, conspiracies, and a huge number of other factors, (many of which we're likely not aware of), contribute to the situation.

What's needed, (and here's where the Libertarians, capitalists, free-marketeers, and other rugged individualist types start howling), is a re-boot of the system. Our top-heavy corporatocracy needs to have its wealth re-distributed in a more equitable fashion. We need to get over the notion that landing first in line gives anyone a claim in perpetuity to resources and privileges. I have nothing against wealth - I'd love to be wealthy myself. But when a little wealth acquired through hard work, skill, and talent is transmuted into a vast monopolistic empire holding a sword over the heads of a huge percentage of the population, something needs to change. All those anti-collectivists out there conveniently ignore the fact that corporations are collectives, and that they are also welfare recipients who game the system, and make up and impose their own rules, in order to accrue wealth and power in ways that have absolutely nothing to do with providing goods and services of value in a truly competitive environment.

If we don't all come together and change this situation in an orderly fashion, then revolution is almost inevitable, and the next one may be very bloody indeed.

Re:Sure, to lower paying jobs

[gutnor]

The article point is that in those specific sector where automation has happened, more jobs of the same skill level in the same sector (in the US) have been created. That is interesting, and that certainly answer some the question like why the unemployment in the US is not worse.

That said, the author is victim of cherry-picking. Sure there are sectors where it all worked out, but there are many others where it didn't ( like your example, or any job that has been outsourced ) Also salary level are not taken into account as GGP points out.

The fact that you need training and education in your own time is not a problem per se. The problem is that by the time you realise that you need those you are probably already in a situation where you do not have the freedom to chose. You need to make career prediction years in advance in order to pull that off, the only way Wall Street analyst managed to do that from time to time is by being in bed with the government to influence the economic polities of the country. That does (Not even considering that minimum wage in the US would not allow you any freedom to train even if you are lucky at predicting the market)

Re:Sure, to lower paying jobs

[thomasw_lrd]

And how is this a bad thing?

We are moving from an industrial society to an intellectual society. Every few hundred years, the human race does this. Right now China is moving from an agricultural society to an industrial one. This is called progress, and while there are definitely going to be growing pains (i.e. higher unemployment for a while, more money needed for social safety nets, etc. etc.), in the end I think it will be better for society as a whole.

The less people who have to work at McDonalds hopefully means more people who can work on discovering a cure for cancer. I know it's a very utopian thought, but I think we can see how this works as demonstrated by the 20th century. Human knowledge progressing can only be a good thing in the end.

Yeah, the next 50 years (an arbitrary number I picked, I have no idea how long it will take) or so are really going to suck for the uneducated, and probably the educated too, but the end result if we can suffer through will be a brave new world.

Re:Sure, to lower paying jobs

[sandytaru]

As someone who did telemarketing for a few months in college (before merrily transferring over to an inbound call center until I graduated), I can assure you the majority of them are uneducated beyond high school or a GED and literally cannot get any other job that pays as much. (Also, indoor work with no heavy lifting.) Their one saving grace tends to be good articulation and speech, although even that falls by the wayside at the scuzzier companies.

Re:Sure, to lower paying jobs

[Maudib]

"don't employ someone for that role because it is not worth it for society to do so."
"Acceptable minimum to me includes healthcare, pension and ability to support a basic family."

Nice. So if someone has no interest in supporting a family, it doesn't matter you are going to force the job to not exist through price controls?

The real problem with the minimum wage is that you are restricting an individuals ability to price their own labor. Someone without a family should have the ability to compete on price with someone who does. Stopping them is immoral.

Re:Sure, to lower paying jobs

[DarkOx]

What's needed, (and here's where the Libertarians, capitalists, free-marketeers, and other rugged individualist types start howling), is a re-boot of the system. Our top-heavy corporatocracy needs to have its wealth re-distributed in a more equitable fashion.

No a reboot isn't needed Government needs to get out of the way and let the system works. Think of how much re-distributions would have happened without the Bank and auto bailouts!

The problem is we are so focused on moving people up the economic ladder we don't let the top people fall down! Had GM gone bankrupt it isnt as if all the capital would have been set of fire. Those plants and facilities would have been sold off, yes at firesale prices, the ownership would have gotten pennies on the dollar, but someone enterprising folks would have gotten useful assets with which to bring a product to market they could never have otherwise been able to afford to do.

The same is true for the Banks to save themselves they would have HAD to write down mortgages; the (real) middle class that actually has some cash on hand might have gotten the opportunity to retire some debt at cents on the dollar. They would have dramatically improved their net worth and become tomorrows investors. Yes the guys with $1000 in the bank account and the $300,000 interest only option ARM, with no job would still be pretty f**ked.

Capitalism would work just fine, its the socialism of loss that remains the problem. Its like the whole healthcare debate. ITS A GOOD THING PEOPLE ARE BANKRUPTED sometimes because it creates opportunities for others. It makes that house in the better school district suddenly affordable for a different family etc. Real social mobility requires destruction.

Re:Sure, to lower paying jobs

[blackiner]

Until video teaching replaces teachers because of the budget deficits.

Current reality is even more frightening. The education book publishers and tech companies are already pushing iPads, digital books, digital exercises, digital quizes, and digital tests on students. This is *already* happening in many states, California being perhaps the biggest example. You have schools beholden to these entrenched tech companies and publishers (although, I guess that is nothing new), and those companies are pushing automated teaching tools to the nation's children in public schools.

If this process ever reaches critical mass, schools will no longer have teachers, and corporations will have complete control over education. Just picture it, a student has trouble with a problem, they tap the help button on the iPad, and then a Pearson rep comes up in video chat. Ugh. And then that job will be outsourced. Critical thinking's fossilized remains will be found years later by whatever out evolves us.

hahahahahaahaha

[Anonymous Coward]

Obviously, this guy doesn't know anything about the restaurant industry, at least in the USA. Most "chefs" are already making minimum wage or very close to it. In the USA, only the servers and managers make money in a restaurant due to the messed up tip system. However, when it comes to "gourmet chefs" they make even less. At the highest levels, a.k.a. 3 star restaurants, most of the kitchen staff are unpaid interns. They all dream of opening up their own place some day.

Lower Wages for Gourmet Chefs?

[Nova Express]

That depends on one question: Can we replace them with illegal aliens?

Because the political establishment, along with business interests, have decided that a permanent underclass of illegal alien workers is just fine with them. This in turn has depressed the wages on labor-intensive jobs while making welfare a more attractive option than work for many.

The unwillingness to enforce border controls has probably cost more Americans jobs in the last 20 years than any technological advance.

Re:Lower Wages for Gourmet Chefs?

[T.E.D.]

making welfare a more attractive option than work for many.

That just shows you how ludicrously, immorally low we have our minimum wage set to right now. However, I will admit that it is also pretty darn messed up that we have set up a system where only those here illegally (an thus unable to collect welfare) would take an actual minimum wage job, and then we yell and scream at the inevitable flood of illegal aliens who come here for all those jobs we reserved just for them. Like they are somehow more immoral for wanting a better life for their families, than are the rich folks who set up this system for them to have that role.

What?

[Anonymous Coward]

For example, word processors and voice mail systems reduced the numbers of typists and switchboard operators, but these technologies also increased the number of more highly skilled secretaries and receptionists, offsetting the job losses.

I haven't had a secretary since smart phones came on the market. The Administrative assistant was canned and we were handed these things.

Similarly, Amazon may have eliminated jobs at Borders and other national book chains that relied on bestsellers, but the number of independent booksellers has been growing and with it, more jobs for sales clerks who can provide selections and advice that Amazon cannot easily match.'

Borders went out of business, Barnes and Noble is hanging on a thread and the ONLY independent bookstore around me is a Christian bookstore. And they a lot MORE than books.

Look it, the data is showing that between automation and globalization, it is doing some real harm to our employment here in the US. And what this article misses is that job replacement isn't always one-to-one. Meaning for one worker who loses a job because of automation, there isn't always another job him to slip into: it usually hundreds get canned and a fraction of those move into the new area.

I am by NO means against automation - to head off the ad-hominems - but what I'm trying to point out is that there are some drastic changes happening NOW in our economy and things are going to get ugly.

Oh, to the weavers. Back in the 19th Century, automation increased worker productivity - it didn't replace them because you needed a human to be the brain of the machine.

Today, humans aren't necessary because the machines are "smart" enough to be autonomous.

When those new looms were put in place, you needed operators, and a few (children) to go inside a running machine to lubricate it - they lost life and limb and we got those "job killing" government regulations as a result.

So maybe a weaver lost their job as a weaver, but an entire crew was hired for the new machine.

Today, it's the opposite. Entire lines are replaced by robots and maintained and programmed by a hand full of people.

And that as a society is where we 're going to have to make some hard adjustments.

Anyway, BOOKS are going to be written on this and there's no way to do justice on the topic in a techdirt article let alone a Slashdot post.

Telemarketer

[Rob the Bold]

For example, telephone operators have largely gone by the wayside, but a (brave) new world of telemarketing and call center support jobs have opened up because of advances in technology

If I had my druthers -- and we don't, because time and tech marches on -- I'd rather be an AT&T operator in 1973 than a telemarketer in 2013.

That said, I think it's worth asking: if machines are going to replace all our fast food workers, are we going to start paying our gourmet chefs minimum wage just because we can?

Yes. If the "market" can set wages below minimum for gourmet chefs due to an infusion of newly retrained fast food employees so they bottom out at that limit, then it will. That's just what happens. Whether or not that entire scenario occurs -- laid off McDonald's cashiers going to culinary programs and flooding the upscale restaurant and hospitality business letting wages be depressed rather than trying to find other more immediately available jobs -- that's really the question to be asking. (I would answer "no" to that question.)

Tech should make jobs obsolete

[Arduenn6058]

Why can't tech make having to go to work obsolete?

Why can't we make all the tech stuff, like robots, do all the dumb work for all of us so we can spend the rest of our lives playing, or do the kind of work we really enjoy? Isn't this the frigging thing we should strive to achieve in society? Not create more jobs, but less?

Absolutely False

[sl4shd0rk]

How many people in Detroit were out of work once robots started spot welding all the car frames and moving parts into position for assembly? How about Robots in manufacturing in general? Lots of people used to do those jobs. Check out How It's Made sometime. You'll see huge assembly lines full of robots where people used to stand. Hardly anyone walking around.

I've personally seen the labor force in Manufacturing facilities decline due to automated machining processes; 1 or 2 guys running 6 CNC machines where it used to take 6 people to do it manually. Polishing metal to a lustrous finish used to be a skill reserved for the 1 or 2 old German guys in the place. Now, you have CNC polishers do it in 5 different axes nonetheless.

Next, lets talk about how global connectivity has put people out of work. CNC again. You only need one programmer to transfer the machining code to some place in china where a dude running the CNC machine uploads it, puts a chunk of steel on the table , and hits the Go button. For $1.75/hour wages.

TFA is complete BS.

Technological progress enables the shadow economy

[Neo-Rio-101]

Technical progress has enormously boosted productivity worldwide and is still increasing it at a rate of about 2% per year. Theoretically, we needed to work four days less every year for producing the same goods and earning the same income. However it does not happen this way. Producers use productivity boosts for reducing costs - mostly wages and salaries. This is supposed to improve their profits, but it also has an adverse affect. Layoffs, unemployment, subsequent demand shortfall and economic crises eat a large part of the benefits from increased productivity. The remaining excess profits are invested - however not in production of goods, but in financial assets. Hedge funds, investment banks, and trading firms circulate an immense money volume (up to seven trillion US$ per day) through the financial markets, this way creating a shadow economy that largely surpasses the market of real products and services. It consumes most rewards of technical progress, and gives back occasional market crashes and financial crises.

But it also offers the opportunity to redistribute some of the excess profit back from the rich to the poor. Providing many people with a small but regular trading income will take liquidity out of the financial markets and inject it back into the production cycle. This will boost demand worldwide and soften the world's economical problems.

It's the regular trading income thing that has a lot of people stumped though.

Re:Luddites aren't obsolete yet

[Rob the Bold]

In my area, we now have garbage trucks that pick up (standardized) trash cans. Presumably, this leads to fewer "garbage men" - who used to be the archetypal unskilled laborers. But the few garbage men that remain now must be skilled as truck drivers.

I actually know a guy who worked as a garbageman who got replaced by automation. It paid good money, because he had qualifications that most people didn't. He had the strength and agility to lift 70 lb barrels into the truck, hang on for dear life at speed, tolerate a "variety" of weather conditions and a living situation that allowed him to go to work at 4 or 5 AM. Unfortunately, when the demand for those skills and qualifications evaporated overnight, there weren't that many package handling jobs to absorb the influx, and his earning ability dropped just as quickly. Kinda sucks to be forced into a 6-12 month unpaid vacation while trying to find money to get trained for something else at wages that will never match what he made before. No way around it, of course, those jobs are just gone and he understands that. He's got another job, so I guess you could say his job wasn't "killed," it just became something else that didn't pay as well even after becoming proficient.

It's not tech, it's productivity

[bsidneysmith]

"Tech vs. Jobs" is the wrong frame, and the wrong debate. Jobs are lost, and (partially) replaced by lower-wage jobs, because of the enormous increases in productivity that increased technology (and improved management practices) brings. This should be making everybody better off--more product for less work should mean generally higher standards of living. The reason it doesn't is because our economic paradigm awards all of the benefits of increased productivity to capital, and none to labor. We need a system in which anyone who wishes can make a living working about 20 hours/week. But unless we rethink our economics we are teetering towards a crash, because the labor sector is collapsing, and capital must soon follow because it relies on a healthy consumer class--the very laborers whose livings have been pulled out from under them. If one looks at labor participation rates (instead of govt. unemployment numbers) the situation becomes quite clear.

Re:America has lots of jobs...

[Anonymous Coward]

But, I find the Republicans piss me off the most, because they kept waving American flags as they shipped our good-paying jobs overseas.
 
Oh, And Clinton wasn't part of that when he gave the Chinese Most Favored Nation status? Care to back this up with more than just MSNBC lip flapping?

Re:Sure, to *differently skilled* jobs

[poopdeville]

I'm a poor in America. I bought a used 25$ tv about two years. I saved for years to buy a 300$ laptop. I'll have to save for 5 years to finish my BA in math. I haven't spent a single dollar that wasn't for food, housing, or electricity in over a year. I don't have a phone or car or an air conditioner.

The dollars are stretched, and the situation is getting worse.

Unemployment will come

[JMZero]

Imagine instead of people we're talking about horses. Horses have had a variety of jobs throughout history. They bounced around between farm, military, and transportation jobs as different trends and technologies came and went. Horses didn't have to worry, there was always something they'd be useful for.

And then, within a 50 year span, they lost almost all those jobs, because machines surpassed them in their core competency (pulling and carrying stuff).

Similarly, humans will get bumped and jostled around and generally will have something to contribute... until we quite suddenly (from a history perspective) don't. A few more advances in artificial intelligence and robotics, and the majority of humans will have nothing to contribute to the economy. The kinds of jobs that humans will still excel at (eg. creative stuff like writing) are also things that just don't require that many people to do, and which many people will continue having no aptitude for.

This is good news. It'll be awesome to see what humans can do post-scarcity. But the transition will be awkward.