Effects of Technological Development on Skilled and Unskilled Labor
Headline text
- Introduction
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 available jobs left (Krugman A). This fallacy has resurfaced in times of sluggish economic growth, and it is a dangerous mentality when considering the job market.
Krugman states that such a mentality leads people into the false belief that new jobs are impossibility, therefore discouraging efforts to influence policy to help create new jobs. This can also lead to protectionism as Americans feel that jobs must be protected by preventing outsourcing, which would not spell well for the economy as it would close American markets to new producers, hurting both economic and diplomatic development.
It is true that developing technologies have replaced and/or rendered jobs previously held by people obsolete. While new jobs can be created in the wake of these innovations, it is normally skilled laborers who profit from these new positions. For example, the advent of a self cleaning bathroom facility for use in places such as stadiums and gas stations has severely reduced the need for janitorial services in the locations using them. This reduction in needed labor benefits the businesses using these devices because it has boosted efficiency while cutting out required paid hours for custodians. Believers in the "lump of labor fallacy" Krugman highlighted might state that if these devices become more widespread in their use, that thousands, if not millions of custodial jobs would be at risk. The emergence of these bathrooms does benefit the more educated and specialized skilled labor class, as it creates job positions for designers, engineers and marketers, who would be needed to service, develop, and sell these units to businesses. It is clear in this case how the advent of newer technology has decreased the need for unskilled laborers and increased the need for skilled laborers.
- 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. (Piva, Santarelli, Vivarelli B)
