Impact of computers on employment Min Phyo Aung

Impact of computers on employment Min Phyo Aung John Kugelman

Issues covered o o Key technological progress over the last two centuries What jobs have been affected by these changes? What are the consequences of computerization of the industry? Recent issue of outsourcing of jobs

Technological timeline o 1800 s: Industrial revolution – the application of power driven machinery to manufacturing n n n Invention of the steam engine Emergence of electric power Invention of the telephone Emergence of railroads Concentration of work force in factories

Technological timeline o 1940 s: Beginning of early computer era n n Transistor invented in 1947 and used in integrated circuit boards Main technical trends in early computer development: scientific and mathematical applications; mostly for defense projects

Technological timeline o 1952: Beginning of modern computer era n n n o Commercially produced Universal Automatic Computer (UNIVAC) by Remington Rand used on TV (CBS News) to calculate outcome of 1952 presidential election Hydrogen bomb tested from computer research As of 1952, IBM had installed 250 CPCs (Card Punch Calculating machines) in universities and defense agencies 1981 -82: Marketing of first IBM PC, based on Intel 8088 chip and Microsoft's PC-DOS 1. 0. n 1982: Time magazine, PC as Machine of the Year

Employment concerns o o o These two periods of technological revolutions have sparked a concern among the general public: loss of jobs With many industries automating their processes, people have lost jobs due to reduced manpower needed to perform a particular task Many people fear that computers will eliminate more high skilled jobs than any other technologies invented

Jobs lost due to computerization o o o Study by Deloitte and Touche predicted 450, 000 jobs in the banking sector would be lost because of automation and electronic banking services Number of telephone switchboard operators dropped from 421, 000 in 1970 to 164, 000 in 1996 New York Stock Exchange eliminated the last 150 floor couriers who carried messages between brokers Travel agencies closed as more consumers make airline reservations online During early 1990 s, IBM, General Motors, Sears and other large companies laid off tens of thousands of workers for corporate “downsizing”

Changing skills o o o Technology can replace skills, opening jobs to less skilled workers Computers automate highskilled jobs, but create require new skills from programmers and engineers Schools train children in new skills

Changing skills o o o 1890: Bookkeepers were highly skilled workers 1800 s: Skilled workers earned increasingly more than manual laborers 1900: 0. 5 out of 1000 an engineer o o o 1920: High-school graduates using adding machine 1900 s: Trend reversed; new tech. reduced skill needed for whitecollar jobs 1990 s: 7. 6 out of 1000

Changing jobs o Old jobs open to less-skilled workers n n o Other jobs now require computer skills n n o Training software for complex jobs National Association of Securities Dealers saved 1½ years and $400, 000 Bank teller Customer-service representative New jobs replace lost jobs n n Computer engineering Maintenance and support

Knowledge-based economy o o Traditional jobs create physical products Computer jobs produce knowledge and information Move from blue-collar manufacturing jobs to white-collar office jobs Lack of physical products means work can be done outside of workplace

Telecommuting o o o Computers enable employees to work outside the office Employees can work at home “Telecommuting centers” Sales jobs made mobile By 2000: 24 million Americans telecommuted regularly or occasionally

Telecommuting o Pros: n n n Reduced overhead (e. g. real estate) Productivity increased by 15% More flexible hours, location More time with family Reduced traffic, pollution, and energy use o Cons: n n n Overhead costs shifted to employee Resentment by other employees Less direction, more distraction Little social interaction Less visibility a disadvantage at promotion time

Globalization o o Downside to knowledgebased economy: globalization Companies outsourcing jobs to countries like India and Russia n n o Workers are cheaper Can communicate via email Problems n n Foreigner workers not as skilled as domestic workers? Language and time zone

Conclusion o o Computers eliminate easily-automated jobs n Manufacturing n Telephone switchboard operators But, they also create new high-skilled jobs n Programmers, systems analysts, engineers n Repair and support personnel Telecommuting: convenient but isolating Globalization: moving jobs out of the United States

Questions o o Are computers destroying more jobs than they’re creating? Are jobs diverging into high-paying jobs for the highly skilled and fewer low-paying jobs for those without computer skills? What are the new skills that these highpaying jobs require and how are the workers displaced to acquire them? What are the ethical obligations of an employer to workers displaced by technology?