Information Technology Reference
In-Depth Information
Automation
Eliminates jobs
Reduces
price of
product
Increases
demand for
product
Creates jobs
Increases
real incomes
of consumers
Increases
demand for
other products
FIGURE 10.3
Superficially, automation eliminates jobs; but automation can also stimulate
the creation of new jobs.
Consider the automation of stock exchanges. In the past, shares of securities were
bought and sold on the floors of stock exchanges by people employed as floor brokers.
Today electronic systems handle most of these transactions, and electronic trading has
made transactions quicker and less expensive. Although electronic trading has greatly
decreased the number of people employed as floor brokers, the number of shares being
traded has increased sharply, and employment in the securities industry has continued
to rise (except during recessions) [12]. New kinds of jobs have been created. For ex-
ample, securities firms have hired mathematicians and computer scientists to develop
sophisticated automated trading systems.
WORKING LESS, MAKING MORE
Martin Carnoy disputes the notion that people are working longer hours now than
they used to. “Workers today,” he writes, “work much less than those of a century ago,
produce more, earn substantially more, and have access to a greater variety of jobs.
Technology displaced workers but also contributed to a much higher labor productivity
and the production of new products, which helped create new jobs, economic growth,
and higher incomes” [13, p. 17].
Productivity in the United States doubled between 1948 and 1990. Juliet Schor asks us to
consider what our society could have done with this dramatic increase in productivity.
We could have maintained our 1948 standard of living and gone to a four-hour workday
or a six-month work year. Or every worker could be taking every other year off with pay.
Instead of taking the path of working less, the average workweek actually rose slightly.
As a result, Americans in 1990 owned and consumed twice as much as in 1948 but had
less free time in which to enjoy these things [10].
