Monday, January 20, 2014

Technologies and Jobs

'Software is eating the world': Marc Andreessen said that and we see this everyday. It seems technology is marching into, in fact, creeping into, everything that we do. And, if it is eating anything, it is eating jobs, the solid middle class jobs we knew and still model our lives around, those of Secretaries, Administrators, Receptionists, Sales People, and all that. As is said, Microsoft Word has eaten more American jobs than India and China (and that's no consolation to India and China, because it will eventually, it is now, eating Indian and Chinese jobs too), and now this is extending into realms that we didn't think are possible. For the moment, Google's self-driving cars may not stand a chance in Mumbai or Lagos, but its arrival should eventually reorganise the trade of driving vehicles. The big issue in London today is that of closing ticket offices - with the implication of loss of Ticket Clerk jobs - and many stations today have only minimal ticket office service anyway, the job taken over by the touch screen machines of various kinds.

The Economist sees this as inevitable and desirable: Because the pressures of increasing productivity, globally footloose capital and high skilled labour, countries can't avoid, despite the loss of jobs and social consequences it brings, adopting technology. And, it prophesies that like in previous expansions of technology, while this replacement of labour with technology initially benefit the owners of capital and technology, subsequently, with realignment of education and training, labour catches up and reaps the rewards: Better jobs are created, to be performed in better conditions.

However, this happens over long run. As Keynes said, "In the long run, we are all dead", and therefore, this may not be an uniformly gratifying scenario. The new jobs are just too few to replace what is lost. As an illustration, the Economist article cites Instagram, which, when it was sold, serviced 13 million customers with 16 employees, whereas Kodak, which filed for bankruptcy a few months before Instagram got sold, employed more than 140,000 people at its peak.

In the immediate term, however, the effect of technology on labour is pretty dramatic. People employed in agriculture in America has shrunk from over 30% to 2% in the last hundred years, but the food output has gone up several times. Labour's share of output, the article points out, has shrunk from 64% to 59% globally, and the share of income of top 1% in America has shot up from 9% of total in 1970 to 22% today. And, menacingly, a study in Oxford University suggests that 47% of today's jobs may be replaced by technology in the next two decades. (Source: 'Coming To An Office Near You', The Economist, Jan 18th - 24th) 

As for the logic that expansion of technology eventually benefits labour, just as it did in the industrial revolution when compulsory education was introduced and a new generation of trained people created the middle class that we know today, is based on the view that technology determines everything. However, there may have been other factors at work which made it possible, such as the expansion of trade. So, the mobility of labour that The Economist's argument is based on, may have happened at the cost of extreme deprivation of the artisan communities in other parts of the world. In that sense, the argument that technology will destroy jobs but in the end, labour will catch up, is based on the assumption that global economy will continue to expand in scope, and new countries will continue to join it expanding the cycle of global consumption endlessly.

Another assumption left unsaid is that this march of technology will leave the politics untouched, but history shows it does not. The changes in the global economy has already wrought changes in politics in many countries, and if one global trend is visible today, it is that the middle classes are in a full scale war against its 'lower class' compatriots to wrest control of the polity in the name of 'development'. Since this battle can't be won by democratic means, the losers from globalisation are just far too numerous, this trend is resulting in the undermining of democracy though a culture of street protests, facebook rebellions and undermining of the compromises and consultations that formed the core of a democratic culture. Though there is no inevitability of repetition of history, the industrial revolution did indeed lead to conflicts inside the nations eventually spilling over outside, a danger we should be mindful of.

Indeed, this is not about prophesying that this would happen, and surely, history itself has lessons what needs to be done to distribute the effects of prosperity: The answer lies in preservation of democratic politics and innovation in education. A greater, even if painful, culture of compromise and consultation between the classes, and creation of an education system designed to build prosperity for all (rather than to preserve the existing privileges) can prepare a country to take advantage of the technological progress, and yet not lose its shirt in the end. Admittedly, the current trend is just the opposite, but to keep faith in humanity and to expect it to 'do the right thing once all options have been exhausted' (paraphrasing Churchill) may be worthwhile.

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For details of what jobs are in danger, kindly refer to Education for Employment: Facing Up The Future

2 comments:

merica pinhas said...

I agree that a newly traind generation of people will come to claime new technological jobs like in the industrial revolution. But unlike then technology is moving at a lightning fast pace Faster than its ever been. How can you expect people to catch up in education and job training? Wouldn't you call it game over?

Supriyo Chaudhuri said...

Merica

You are indeed right - people who are talking about technologies eating up jobs are openly arguing that people wouldn't be able to catch up or stay ahead of technologies, and this is opening up the argument of creating a new welfare formats, such as Negative Income Tax (which is somewhat similar to tax credits available in Britain). There is also the consideration that not all jobs that could be replaced would be replaced, due to social and political considerations, as opposed to economic or technological considerations. And, finally, education may have an impact, if the governments wake up to this and readjust the policies away from keeping most of their people from good education, which they do at this time, somewhat deliberately, I shall argue. But, in summary, we are looking at a very problematic scenario, with possibilities of social strife.

Supriyo

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