7.1 History of Automation Anxiety Flashcards
What is automation anxiety?
Technological change will destroy jobs and create unemployment
- Realted concern is that it will drive down wages and/or increase inequality
- Fears continue today, now often around robotics and AI
- Mostly information technology - computers increased relative inequality
Two effects of automation:
Displacement effect - robotics displacing workers
Reinstatement effect - creation of jobs
Positive effect of more efficiency and productivity - output rises, prices down
What are some examples of the history of automation anxiety?
Knitting Frame:
- 16th century, Elizabeth refused inventor a patent - deprives workers of unemployment, making them beggers
Luddites:
- Protest organisation in Nottingham - textile workers protested against reduction in wages falling due to business owners replacing hand powered knitting frames wih steam powered - could replace skilled workers with unskilled workers
Example of unskilled bias - bias to less skilled people
President Johnson’s commission on Tech and Automation
- 1964 - asked to confront productivity problem of that period - specifically rising productivity may outstrip demand for labour
- Concluded automation did not threaten employment
- Said it was instead important determinant of precise places, industries and people affected by unemployment - general level of demand by far the most important factor determining how many are affected, how long they stay unemployed and how hard it is for new entrants to the labour market to find jobs - basic fact is technology eliminates jobs, not work
Technological change cause entire occupations to disappear:
- Elevator controllers
-Longshoremen
-Typing pool
What is the second machine age?
Brynjolfsson and McAfee argued:
- Technological progress leave people behind as it races ahead
- Never been wosre time to be worker with only ordinary skills and abilities to offer, because computers, robots and other digital technologies are acquiring these skills and abilities at an extra rate
What jobs are arguably at risk
Estimated 47% in high risk category - jobs at risk - jobs we expected could be automated relatively soon:
- Food preparation
- COnsutruction
- Cleaning
- Driving
- Agricultural labour
- Garment manufacturing
- Personal service
- Sales
Why would people now agree with Johnson’s commision?
New technologies dont just destroy jobs:
- May make other workers more productive
- Creates new jobs
- Increases demand through lower prices and new products
In addition, we need to consider other factors:
- Labour supplly decisions - changing wages make workers move
- Demand elasticities (changing prices and income causes consumers to shift demand)
- Adjustment costs: movng workers from displaced jobs to new jobs
How has the industry people work in changed?
Decline of agriculture and manufacturing, rise of services and government jobs
Services rising in 70s/80s
Agriculture been low since 50s
How have the types of jobs people work in changed? What has been the effect on employment rates?
Agriculture:
1940-80 - 3.5% loss
1980-2010 - 0.4% loss
Service occupations
1940-80 - 0.3% gain
80-2010 - 1% gain
Clerical sales:
40-80 - 2.4% gain
80-2010 - 1% loss
Skilled blue collar:
40-80: 0.1% gain
80-2010: 1.2% loss
Managers
40-80: 0.5% gain
80-2010: 1.2% gain
However, unemployment rates are not falling - evidences no effect of computer on employment rate
What is the more important effect as a result of job changes?
Graph shown in week 7 part 2
Change in inequality through relative wages
The log wage gap, ln(Ws) - log of people who havent been to university, ln(Wu)
Approximately, Ws/Wu
If line goes down, inequality is going smaller
- From 1980s onwards wage inequality follows clear steep upward pattern - question as to whether this is as a result from the PC
- Small n shape - rises in 1964, falls in 1970 - 82
