How Technology and Automation Affect Employment, the Economy, and You

By Cody Ferenchak
March 16th 2015

Automation is definitely a topic of concern in almost all of today’s industries. Especially for those in the service industry. Automation is making the processes used in the product and service industry less labor intensive and more productive. Over the last three decades manufacturing companies in the industrialized world have seen what great change automation is bringing to the world in terms of production. Assembly lines in the automotive industry are faster than ever. Electronics such as the iPhone are being constructed in just minutes due to hands of automated robotics. Upgrading to automated technology is becoming more and more accepted. Companies are spending much time and resources on implementing the use of automated labor to cope with the increasing competition from non-industrialized countries whose production costs are much lower. Where there were once hundreds of thousand of laborers filling factories assembling the everyday technological, textile, and household products we use today; are now machines that require no hourly wage, only monthly to sometimes yearly maintenance, up-keep and energy costs. The world of industry we are currently living in has changed. From labor-intensive production, to capital-intensive automation. Not only are we focusing on the tangible side of production, also the many intangible service industries are experiencing change. There was a time in the past where one would walk into the local cinema, report to the box office and purchase tickets for him and an accompanying guest. Just last week I found myself standing in front of a small kiosk with a touch screen, where I could pick my movie time and seating and then swipe my card. What happened to the minimum wage paid employee of that theatre who was working to pay off student loans or even put food on the table? He’s been replaced. Replaced by automation. Why worry about paychecks and benefits when that particular business can rely on an automated computer system that requires neither of those payments. Is this the dilemma of employment? Or is this the progression of our economy? An analysis of technology and automation reveals two pressing issues: whether automation may lead to an economic collapse, or the displacement of jobs into higher skill levels and increased productivity. The response to the automated epidemic may be situational, or quantifiable. This analysis will explore the topic on both sides. To begin the exploration of automation, it would be best to break down the topic into two views. First looking at how the topic at hand may present some “cons”. Secondly, how the issue presents it’s “pros”. And then to conclude, piecing together both sides to find balance in the industries and economy that are examined. Employment is the biggest concern facing automated technologies. Most fear that the speed of technological improvements in today’s day and age will wipe out broad categories of jobs faster than our economy can absorb and refocus its sights (Dave Maney). What exactly happens when jobs are taken over by machines and people are displaced? One way to view this is that when jobs are taken away employees will begin to look for new jobs. In the meantime the unemployed will need to find funding to support themselves and their families during the time they search for a new job, if they ever do. This is where welfare comes into play. Taxpayers will begin, as they always have, to aid welfare recipients. When jobs are continually lost due to the sweep of automation more and more will rely on welfare. Who doesn’t pay taxes to fund welfare checks? The answer is alarming and obvious, welfare recipients. Where will we see the economy of this country turn when over fifty percent of its once working people are on welfare? That is the pressing dilemma that companies and more or less our government is going to need to face with social responsibility framework. Where do actual jobs need to remain to secure a strong economy? Where and when is automation just going to far? Fewer people work in factories today than they did in 1997. There is enough anecdotal evidence that automation is threatening jobs, everywhere. Skills are not growing fast enough to compete with technology (David Rotman). The result here is that rapid technological change has been destroying jobs faster than it is creating them, contributing to the stagnation of median income and the growth of inequality in the United States (Brynjolfsson and McAffee). To add to the down sides of automation, American’s are being taught to do a lot more work for the same amount of money. For example, self check-out lines that are now in place in Wal-Mart shopping centers everywhere are requiring the customer to scan their items, bag their items, process their payments, and take their items to their automobile for the same cost as a non-automated grocery store, a store that we once had five to ten years ago. An absence of employees would result in a savings of store costs, correct? Sadly, that isn’t the case. Although, we’ll find that the savings incurred are being used elsewhere, and benefit the consumer. Luckily automation has two sides. The first I have covered, mostly it’s negative effects on the economy. The flip side is overlooked by the average consumer and by retail level management and employees. This side I’m discussing involves the professionals behind the scenes. Due to the mass amounts of technologies involving automation and the maintenance of them, the demand for skilled technicians is increasing. The machines cost a fraction of preexisting brick and mortar stores. The technology at glance seams to be eliminating jobs, take a closer look and one will find that the jobs are in fact displaced. For example, according to the Bureau of Labor Statistics, there are more bank tellers now than before ATMs. This result has come about because of the savings made by the initial implementation of automation technologies has allowed the operating cost of running a bank to dramatically decrease. The lower cost of operating a bank has allowed banks to meet the needs of many more customers. In simpler terms, jobs are being displaced to different occupations (James Bessen). After decades of waiting for job opportunities to stem from automation, professionals are finally seeing a demand that is outstripping supply, putting qualified automation professionals in a good position. We’re now living in a time where workers have the opportunity to learn and adapt to the changing technologies surrounding us in order to gain a competitive advantage, ultimately not being the ones that get “replaced” by machines. New problems arise with automation and the skills are needed more and more to maintain them. Some would argue we are still “smarter” or more “efficient” than the machine/computer, because at the end of the day we still program them. Resulting in the assumption that skilled automation jobs will definitely be in high demand presently and long term. So will these “Smart machines” steal our jobs? The answer is a yes and no. As information technology allows automation of more and more middle-class jobs, fewer of these workers will be able to find work (James Bessen). To counter that answer, white-collar jobs will become more prominent. Machines will increasingly shift and displace skills and careers. Automation hasn’t replaced workers over all. Technology may promote some economic inequality, as for a jobless future, the evidence surely does not point in this direction.
My thoughts towards the issue are that viewing automation as a negative force, is very faulty. Short-term yes, factory workers, employees at check out counters and so forth are losing jobs. Beneath the surface their jobs aren’t lost at all, they are truly displaced. What is lost is their long-term optimism and work ethic in different occupations. Ultimately facing change. People facing the dilemma of being displaced by technology need to look deeper into and explore the endless opportunity and career potential with the increasing necessity for skilled automation professions. Once our nation changes it’s thought process and views these changes with optimism, our economy will flourish and this overall discussion will become irrelevant. After assessing both sides of the issue I find that the most simplistic yet most brilliant way to rationalize the affects of technology and automation would be with a quote from doctors Erik Brynjolfsson and Andrew McAfee, who focus their studies, research and writings on information technology and productivity. “There’s never been a worse time to be a worker with ‘ordinary’ skills and abilities to offer, because computers, robots, and other digital technologies are acquiring these skills and abilities at an extraordinary rate.” The time to progress our intellectual capacity is now. As for later, there may not be a chance.

References * Rotman, David. "MIT Technology Review." How Technology Is Destroying Jobs (2013): n. pag. 12 June 2013. Web. 31 Jan. 2015. * Maney, Dave. "What If Automation Overwhelms The Need For Employees?" Forbes. Forbes Magazine, n.d. Web. 16 Mar. 2015. * Brynjolfsson, Erik, and Andrew McAffee. "Thriving in the Automated Economy." The Futurist: MIT Business Review (2012): 27-31. Print. * Bessen, James. "Some Predict Computers Will Produce a Jobless Future. Here’s Why They’re Wrong." Washington Post. The Washington Post, 18 Feb. 2014. Web. 16 Mar. 2015. * Kelly, Kevin. "Better Than Human: Why Robots Will — And Must — Take Our Jobs | WIRED." Editorial. Wired n.d.: n. pag. Wired.com. Conde Nast Digital. Web. 16 Mar. 2015. * Hebert, Dan. "Good Time to Be an Automation Pro." Control Design (2012): n. pag. Web. 16 Mar. 2015. * Komann, Lene, Jane R. Stakson, and Anderson Sorenson. "Automation, Labor Productivity and Employment - a Cross Country Comparison." Copenhagen Business School CEBR Review (2006): 1-16. Web. 10 Feb. 2015.