Effects of Technological Development on Skilled and Unskilled Labor

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• Technology

Improvements and developments in technology have been present throughout human history. From medieval times with improvements in siege weaponry to the latest computer developments, technology has always advanced hand in hand with human history until decent decades. Starting in the early to mid 20th century, an explosion in technological developments related to both World Wars created a myriad of new jobs for both "skilled labor" such as engineers and weapons designers as well as jobs for "unskilled labor" such as assembly line workers. This job explosion threw the United States economy into high gear.

During the 1950's people became concerned that the rise in automation in factories and businesses would lead to massive unemployment as machines replaced unskilled labor assembly line positions. Obviously, this doomsday of unemployment never surfaced to the feared levels people predicted, but in the decades that followed, a continuing debate emerged as to whether or not the current rapid rate of technological development has a beneficial influence only on skilled labor while leaving unskilled labor behind.

• Unskilled Labor

Economist Paul Krugman cites what other economists call a "lump of labor fallacy", which is the idea that there is an exact amount of work that needs to be done in the world, thus making any increase in the amount of work each worker does detrimental to the number of availible jobs (Krugman A).

• Skilled Labor

Economists such as Mariachristina Piva, Enrico Santarelli, and Marco Vivarelli argue that technology has benefited skilled workers more than unskilled workers. In their article, "The Skill Bias Effect of Technological and Organisational Change: Evidence and Policy Implications," they state that skilled workers are more able to exploit new technologies. Empirical Study