Apr 042012

Automated technology and job displacement

By Nishaan Sandhu 

 Automated technology is becoming more common in nearly every venue of the world marketplace. Supermarket U-Scans, automated bank tellers, and computerized technical support systems serve as time savers for some while inspiring strings of expletives for others.

The isolating nature of U-Scan and other computerized customer service results in major job losses, a huge impact on the economy, and a significant decrease in everyday social interactions.  Instead of saving labor for the benefit of the workers, technology continues to drive the wedge between the ultra-wealthy and the growing ranks of the poor.

The corporate bottom line: no workers comp necessary for broken U-Scans. Photo by Captain Comannokers.

When discussing the unemployment rate that remains at a high level, it seems much easier to become passionately angered by offshoring or job displacement than to recognize how our nation’s motto of “I want it fast and I want it now!” actually takes away jobs.  Let’s take a moment and think, what is the real price of this modern day convenience we call U-Scan?  

The (jobless) situation

In the early 1900s, the economic firestorm of the industrial revolution took the spirit out of artisan craft, transforming it into an efficient and profitable Jello mold. Ten years into the twenty-first century, we seem to be following a similar pattern. The machines of the industrial revolution eliminated tens of thousands of opportunities for humans to be fruitful in the workforce. Will the current explosion of the modern automated technology forcefully do the same?

In his 1997 article, “The Impact of Technology on Employment,” Kirkpatrick Sales writes, “It is indisputable that automation has eliminated vast numbers of jobs across all sectors of the economy in all industrial nations, maybe 35 million of them in the last decade…From 1988 to 1994 the number of jobs lost [U.S.] was estimated to be 6.5 million, far higher than in any other post war period, and fully 85% of them are thought to be permanently lost to machines and overseas transfers.”

Sales further states, “Automation is held to be responsible for the loss of half a million manufacturing jobs every year in this period and close to 3 million in the decade before—the completely automated factory is only a few quarters away—but it has also begun to make deep cuts into service jobs and seems likely to make its biggest future impact here.”

The perception among some Americans is that immigrant labor and offshoring of jobs are the major causes of unemployment. Indeed, American corporations choose to utilize migrant labor and offshoring to India and China in order to pay out lower wages. Yet, studies have estimated that offshoring accounts for 10 percent of unemployment and would only affect two percent of employed Americans. Martin Ford, author of The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future, states that in the IT sector, automation eliminates more jobs than offshoring.

Let us consider what happens to many individuals whose jobs have been displaced due to  supposedly helpful automated technology.  The numbers of jobs lost since 2007 is staggering.  The job market seems to be kicking the former worker while they are down as businesses replace human workers with computers. How are citizens able to “feed” the economy if they no longer have jobs and money to spend? In July 2010 Chris Isidore, of CNN Money, reported, “The recession killed off 7.9 million jobs. It’s increasingly likely that many will never come back.”

It does not take a lot of critical thinking to recognize that, if there are jobs lost due to an economic recession, our top priority should be finding ways to create more jobs.  Yet, we find ourselves purchasing goods made from machines and paying for them with the “assistance” of automated computers. If we have issues with our goods, we are prompted to listen to a “customer solutions” recording so that we can push more buttons to solve our problem.  During the course of one consumer’s finding, purchasing, and complaining, at least three different jobs were replaced by computers.

According to Andrea Orr, who writes for Economic Policy Institute, “The country as a whole has lost 7.8 million, or 5.6% of its total jobs since the start of the recession. Because it should have created around 100,000 jobs every month just to keep up with population growth, there is a nationwide shortage of more than 11 million jobs today.”

Automated technology will continue to suffocate many employment opportunities. With numbers like these, it seems apparent that this technology is benefitting only the income of the corporations, which present it in the guise of saving time and money.  We seem to be choosing an overhaul of the workplace similar to that of the Industrial and Agricultural Revolutions.

A short agricultural history

In the late 1800s, about three quarters of U.S. workers were employed in agricultural fields. Machines became a very efficient means of farming for profit and began to replace the human worker in agriculture. According to Martin Ford, in 2010 the percentage of U.S. workers in agriculture was only around 2-3 percent. Professor Mark Perry at the University of Michigan, writes that between the years of 1790 and 1990, farming jobs decreased by 87.4 percent due to agricultural technology. This is a clear example of how technology has severely affected millions of jobs in a major economic sector.

During the late 1800s, individuals who were no longer needed in the agricultural fields of the south headed north to cities such as Chicago and Detroit. These cities housed automobile or meat packing factories and therefore new jobs. Although some field workers were able to find new jobs in the factories, many were permanently displaced. They arrived and remained in these cities homeless and impoverished as they watched the manufacturers’ profits continue to grow.

Throughout the 1900s, machines proved even more efficient than humans.  By the 1980s a single machine could easily replace two or three workers on the assembly line, says Russell Rumberger in Technology in Society.

This led to even further layoffs. The newly unemployed were forced to find other jobs for which they were qualified. While some saw this as an opportunity to acquire new skills, most found employment in the service field, a field which allowed them to train on the job. Predictably, 5.5 million or 32 percent of manufacturing jobs had been lost during the years of 2000-2009, reports Richard McCormack. With the help of technology, the numbers of human and unemployed will continue to grow.

The food industry, particularly fast food, is one of the largest employment sectors in the service industry today. The fast food work environment is incredibly fast paced and challenging.  Employees must be able to multi-task while remaining courteous. Many people tend to this service need without extensive education. This industry provides jobs for people from all walks of life.

Unfortunately, McDonald’s is in the process of slowly replacing cashiers with self-serve kiosks.

Some claim these glowing kiosks will be a health benefit to hungry customers who will be able to investigate nutritional facts as they order. This is a far cry from the advertising of fast food chains ten years ago: fast food was then a cheap “on the go” option to quieting hunger, not a means of researching healthy eating habits as lines pile up behind you.  It seems, the more trend-driven “sham wow” companies give us with technology, the easier it becomes for us to turn our heads away from the truth—that those kiosks eliminate human jobs.

Who’s working?

In Consumer Reports, Anthony Giorgianni explains his frustrations with the ever-increasing self-checkout lines in the grocery stores. The express lanes run by human clerks are slowly declining, and in turn, the lines are beginning to grow infuriatingly long. Many are opting for U-Scan out of frustration, not convenience. As Giorgianni states, “Now, instead of hiring real people, the stores are expecting me to do the work—and for no pay.”

The customer fulfills the role of an unpaid grocery clerk and the computer supervises. There may be a single clerk who watches over five to ten U-Scan machines at once. Corporations have found a way to hire a single individual to replace the work of several individuals with the aid of technology. Are the five minutes a customer saves truly worth the loss of thousands of jobs for others? Shouldn’t we be outraged that we are passively paying these companies big bucks to fire workers so we can do the work for free?

Automated technology has also led to hundreds of thousands of layoffs in the white-collar workforce. One of the larger layoffs due to automated technology of the twentieth century occurred in 1983, when Bank of America, one of the largest banks in the U.S., closed 120 branch offices, eliminating 5,000 jobs through ATM distributions and branch consolidations, according to Rumberger. In September of 2011, Bank of America announced that they would be cutting 30,000 more white collar jobs within a few years because the bank is too large and has too many employees.

Companies use automated technology as the new means of competition in corporate industries. In 2009, Ann Livermore, then executive vice president of Hewlett Packard, pointed out that people, not technology, are responsible for making errors. She states that HP will have programs to automate all kinds of things that once had to be done by humans: “The next five years will all be about who can best use technology to automate the delivery of services.”  Shortly after Livermore’s statement, HP laid off 24,500 people.  Their largest job cuts were known as “Mark Hurd firings”: Hurd was an HP corporate guru who fired employees in masses based on cost cutting principles.

The automated future

Why would corporations want to hire humans if they can get away with hiring computers as employees? Humans are complex; we have emotions, character flaws, sickness, death, conflicts of personality, and minds of our own. We are high maintenance; we must eat, have restroom breaks, take up space, and need light to work in. Human workers are money driven; we live on wages, retirement plans, and health insurance. Computers do not need most of these things to function in a workplace. In this calculus, would a profit-driven corporation really choose flesh over silicon?

It is important that we work with technology, not against technology. Computers should be used as tools, not replacements. People have the power to change society and the implications of a disappearing human workforce. It is important for individuals to recognize what is going on and take steps to let the rest of the world know, we are not buying it.

People are waking up to the growing importance of self-sustainability and productivity. Individuals are taking back their right to do for themselves. Consumers are becoming more aware of their purchases. They are choosing to make educated economic decisions by spending money on local businesses, artists, and farmers. They have begun to realize that their local economy is where they can truly make an impact and “vote with their dollar.” In the reality of corporate domination, the most powerful vote we really have is how we choose to spend our dollars. But what happens when we—pushed out of work by machines—have no more dollars to spend?

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