Technological Unemployment Cause

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A technological unemployment cause is a unemployment cause that can be attributed to a technological innovation.



    • QUOTE: ... Technology and operational positions were the 'most fertile for machine processing,' according to Jamie Forese, chief executive officer of the bank's institutional clients group. Forese suggested to the Financial Times that the company would shed up to half its 20,000 operational positions as machines supplant humans at a faster pace. ... A move to automation by Citibank would follow larger trends across the banking industry. From 2007 to 2017 nearly 60,000 jobs were eliminated from eight of the world’s top 10 investment banks, according to the FT.


    • QUOTE: Technological unemployment is unemployment primarily caused by technological change. Given that technological change generally increases productivity, it is an established principle of economics that technological change, although it disrupts the careers of individuals and the health of particular firms, cannot cause systemic unemployment.

      The notion of technological unemployment leading to structural unemployment (and being macroeconomically injurious) is called the Luddite fallacy (named after an early historical example, discussed below). Labor displacing technologies can generally be classified under the heedings of mechanization, automation, and process improvement. The first two fundamentally involve transferring tasks from humans to machines. The third fundamentally involves the elimination of tasks altogether. The common theme of all three is that a task is removed erom a workforce, decreasing employment. In practice, the categories often overlap; for example, a process improvement can include an automating or mechanizing achievement, and the line between mechanization and automation is subjective, as sometimes the former can involve sufficient control to be viewed as part of the latter.

      In principle, technological unemployment may be distinguished from unemployment caused merely by the contraction phases of business cycles. In practice, such differentiation is difficult, owing to the multivariate nature of economics. Like unemployment in general, most technological unemployment is temporary, as unemployed workers eventually find new jobs. For several centuries, the main controversy about technological unemployment has been whether it can ever lead to structural unemployment.








2013 e.

  • (Economist, 2013) ⇒ The Economist. (2013). “Real robot talk.” In: The Economist, Labour Markets, Mar 1st 2013.
    • QUOTE: If society wishes to avoid such an outcome, the only real option is redistribution and a lot of it. ...

      The point is that “technological unemployment” may become an effective reality given lagging wages for less-skilled workers, sufficient to eliminate the incentive to find a job and given reasonable (though not particularly attractive) alternatives. It's not a certainty that things will develop this way. But it's a realistic enough possibility that societies should begin thinking significantly about how to reform and improve their welfare states : to substantially upgrade education, to provide for the best possible work incentives, and to secure finances for the foreseeable future.


  • (The Economist, 2013-08-21). Labour markets. "On 'bullshit jobs'.” In: The Economist.
    • QUOTE: The issue is that too little of the recent gains from technological advance and economic growth have gone toward giving people the time and resources to enjoy their lives outside work. Early in the industrial era real wages soared and hours worked declined. In the past generation, by contrast, real wages have grown slowly and workweeks haven't grown shorter.

      The development of large-scale technological unemployment or underemployment, however, would force rich societies to revisit a system that primarily allocates purchasing power via earned wages. And that, in turn, could allow households to get by or even thrive while working many fewer hours than is now typically the case — albeit through a pretty hefty level of income redistribution. They would then be free to write poetry or tutor disadvantaged children, though we shouldn't be surprised if most use their new leisure to spend more time with a beloved video game.

      We can't be certain that the robots are coming for all our jobs. Disemployment in administrative jobs could create new, and perhaps highly remunerative, work in sectors or occupations we can't yet anticipate. If we're lucky, that work will be engaging and meaningful. Yet there is a decent chance that "bullshit" administrative jobs are merely a halfway house between "bullshit" industrial jobs and no jobs at all. Not because of the conniving of rich interests, but because machines inevitably outmatch humans at handling bullshit without complaining.





  • (Krugman, 2012c) ⇒ Paul R. Krugman. (2012). “Is Growth Over?" New York Times, blog. 2012-12-26.
    • QUOTE: Smart machines may make higher GDP possible, but also reduce tne demand for people — including smart people. So we could be looking at a society that grows ever richer, but in which all the gains in wealth accrue to whoever owns the robots.



  • (Sauter, 2012) ⇒ Mike Sauter. (2012). “America’s 10 Disappearing Jobs.” In: 24/7 Wall St., August 29, 2012.
    • QUOTE: ... Changes in population and technology also will lead to certain jobs shrinking dramatically or even becoming obsolete — if they are not already. Using Bureau of Labor Statistics (BLS) information on thousands of separate occupations, 24/7 Wall St. identified 10 job categories that will shrink by at least 14%, and in some cases by much more than that. These are America’s 10 disappearing jobs.

      No single occupation category is projected to lose more jobs than postal service workers. The evolution and increasing use of digital communication has taken a toll on delivered mail. As a result, the government has implemented planned cuts to the number of postal employees. As of 2010, there were approximately 524,000 USPS positions in the country. By 2020, the BLS expects that number will decline by nearly 140,000, or 28%.

      There will be more severe declines within certain postal occupations. Postal Service mail sorters, processors and processing machine operators increasingly are being replaced by more efficient mail sorting machines, and their numbers are projected to decline by more than 50% by 2020.

      A review of the remaining categories is a who’s who of job sectors that are increasingly becoming obsolete. Two of the 10 positions are in the declining print business. Three are in the textile repair or manufacturing industry, which continues to move jobs overseas.











  • (Bix, 2000) ⇒ A. S. Bix. (2000). “Inventing ourselves out of jobs?: America's debate over technological unemployment, 1929-1981." Johns Hopkins University Press