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

[smooth wombat]

Hey now, let's not let facts get in the way. This article uses the same flawed logic as Rick Perry when he says under his Governorship he's created thousands of jobs without telling you roughly 90% are minimum wage jobs.

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

[Mystakaphoros]

Who are we kidding? Developers don't start at grade B, they clearly start at grade F.

And if you're like me, you basically remain at Grade F and then go become an English major.

Re:Sure, to lower paying jobs

[CastrTroy]

How do we really define "provides a basic level of acceptable living"? 100 years ago, even 50 years ago, it was acceptable to not have indoor toilets (my mom didn't when she was a kid, in Canada). Is it considered OK if people can't afford internet or cell phones? Because neither of those are really necessary, and I know plenty of people who go without them, but there's also a huge group of people who think they can't live without them. Same goes for a lot of other luxury items, like cars and designer clothes. Defining that "basic level" is extremely difficult because in a free market, the people making stuff that people buy continually raise prices to the point where people can't just barely afford to buy the necessities. Also, there's the question about people who simply don't need to make an "acceptable living" with their job. High school kids who live at home, sometimes want a few extra dollar to spend on movie tickets and skateboards don't need to be making as much as a someone supporting themselves. Sure you can make the minimum wage lower for those under 18, but that discriminates against young people who for whatever reason don't have dependable parents and need to earn their own money, while continuing to attend highschool classes. There are other ideas, like garuanteed income supplements, where you let the employers pay whatever they and the employee agree on, no minimums, and the government tops up the difference between what the person is making, and the acceptable minimum. But very few governments want to have these services, because it looks like a free hand out, even though in many cases it would be cheaper to operate than the current welfare systems.

Re:Sure, to lower paying jobs

[Mystakaphoros]

You'll be able to leave your job at McDonald's and get a job cleaning the offices at the robot manufacturing plant!

Are you kidding? They have an industrial-sized Roomba.

Re:Sure, to lower paying jobs

[SecurityTheatre]

It took approximately 65 engineers 2-3 years to design a major line of industrial engineering robot to build infrastructure (say... steel girders), and maybe another 100 full time jobs to build, market and deliver the product.

This line of industrial engineering robot displaced 18,000 low-skilled jobs and replaced them with around 200 high-skilled jobs (maintenance techs).

Those other 17,200 went into the service industry or construction (based on the boom-bust cycle) and are now highly dependent on local fluctuations of the economy.

So, what happened here was an increase in productivity and profits for every business involved - a substantial decrease in salary costs, and a notable decrease in workforce, across the board.

What it does is stratify society. There are 17,000 people struggling to re-train and find low-level jobs, and 300 very well paid engineers and technicians paying them to do menial work.

Then again, perhaps their factory work was menial in the first place, but it is worth pointing out that the massive economic growth of the last 80 years was primarily based on those factory jobs being "middle class".

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

[dkleinsc]

This line of industrial engineering robot displaced 18,000 low-skilled jobs and replaced them with around 200 high-skilled jobs (maintenance techs). Those other 17,200 went into the service industry or construction ...

Also, in a truly shocking occurrence, 600 people managed to disappear without a trace.

A worthwhile read on the subject: Karl Marx on the effects of technological improvements You might not agree with it, or you might shy away from it solely because of who wrote it, but it was a serious economics argument explaining what happens and why.

Luddites aren't obsolete yet

[TheloniousToady]

Though technology may not "destroy" jobs, it certainly shifts them. For example, car factories are increasingly populated with robots. Although that creates economic prosperity that may show up somewhere else, it certainly displaces the unskilled, who previously could at least hold factory jobs.

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.

So, assuming that a certain portion of the population will always be unskilled, and assuming the portion of unskilled jobs is shrinking, the unemployable underclass will continue to grow.

Re:Sure, to *differently skilled* jobs

[Bacon Bits]

It also fails to take into account that the skills required for the jobs that disappear are entirely different than the skills required for the new jobs that replace them. This means you lose everything you've worked for, career-wise. I might have 30 years in as a buggy whip craftsman, but that doesn't mean I have the skill set required to assemble an automobile. It also means that the salary I've been building up disappears. Even if the jobs are equivalent pay ranges, a senior buggy whip architect probably makes a lot more than a junior steering column technician.

If I started at $40,000/yr 30 years ago and make $75,000/yr today and suddenly lose that because my entire industry has been obsoleted -- including my retirement possibly -- and can now only take a new job at $50,000/yr... I'm still screwed.

I'm not arguing we should stop inventing, but its hugely callous to ignore the difficulties inflicted on people when this kind of thing happens.

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?

Re:Tech should make jobs obsolete

[kilfarsnar]

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?

I very much agree with this. We should all be working less. However, American capitalism isn't set up that way. Capital always wants Labor to work more for less money. Everyone would have to be paid more (or the same) for doing less work.

I'm certainly down for that, but we'd probably need a law restricting the work week to 20 hours or something like that.

This article is nonsense

[sinij]

This article is flawed because it relies on historical patterns when we are entering entirely different age. Industrial Age is over and we are transitioning into Information Age. Comparing pre-industrial agricultural society to early industrial age is much better comparison, but then it doesn't support the premise. Few of us that are familiar with the history will tell you that this transition resulted in a lot of societal ills and displaced farmers and merchants did not all find jobs in the factories. Few that did find jobs were ruthlessly exploited and did not at all benefit from this transition.

Comparing telephone operator jobs to telemarketing jobs won't tell you what will happen when automation combined with a growing population will make any kind of job scarce. It is very possible that within generation only top 10% of intellectual ability will be needed, rest will be automated away. Even today we know that productivity already entered exponential growth period. We also know that benefits of this productivity are not reflected in growing wages - nearly all of the extra wealth created by this productivity increase is channeled into corporate dividends and not wages..Pattern is very clear - less workers doing more for about the same pay. This cannot support growing unemployed class by creating service job opportunities, unless you are talking McJobs.

Attempting to portray critics as Luddites is 'poisoning the well' further compounded by willful denial of empirical evidence of the societal trends to the contrary. Yes, author is correct - technology is morally neutral, it is nether good nor bad. What we do with it - and presently as a society we chose to enrich 1% of our population, is what we should focus on.

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.

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.

What the Luddites were really rebelling against.

[wwwrench]

I really hate the way the term Luddite is used -- people should read a bit of history (here for a start). The real Luddites were not anti-technology. They were highly skilled workers rebelling against the creation of textile sweatshops. It's a pity their rebellion was put down so violently -- we have a need for more Luddites in today's economy where our iPhones are produced by people who are effectively living in slavery.

Re:Sure, to *differently skilled* jobs

[Mystakaphoros]

It also fails to take into account that the skills required for the jobs that disappear are entirely different than the skills required for the new jobs that replace them. This means you lose everything you've worked for, career-wise. I might have 30 years in as a buggy whip craftsman, but that doesn't mean I have the skill set required to assemble an automobile. It also means that the salary I've been building up disappears. Even if the jobs are equivalent pay ranges, a senior buggy whip architect probably makes a lot more than a junior steering column technician.

If I started at $40,000/yr 30 years ago and make $75,000/yr today and suddenly lose that because my entire industry has been obsoleted -- including my retirement possibly -- and can now only take a new job at $50,000/yr... I'm still screwed.

I'm not arguing we should stop inventing, but its hugely callous to ignore the difficulties inflicted on people when this kind of thing happens.

"Callous" is really the only possible word I think we can use here. Look, I respect people's understanding of the benefits of capitalism. There are some brilliant capitalists around here. But when the problem is "solved" by market forces, there's another problem left over-- lots and lots of now-unqualified, unemployed people. Just using their children's hunger as a whip to scramble for a new job may again be a market force in action, but it's certainly not kind.

And then you run into the problem of... if we're all broke on our asses, who is going to buy your products?

Your Statement is Demonstrably False

[Nova Express]

Texas has added wages across all income levels.

But no, you just keep quoting that 90% figure from the Institute for Numbers I Pulled Out of My Ass...

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: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.