Technological Unemployment Cause

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

• AKA: Automation-related Worker Displacement.
• Context:
  • It can (typically) be associated with an Impactful Technological Invention.
  • It can range from being a Physical Labor Automation or Knowledge Worker Automation.
  • It can range from being a Past Tech Unemployment Cause to being a Current Tech Unemployment Cause to being a Future Tech Unemployment Cause.
  • It can range from leading to a State of Negligible Technological Unemployment to being a State of Mass Technological Unemployment.
  • It can be related to a Technological Underemployment Cause.
  • ...
• Example(s):
  • Sector-Based Technological Unemployment Cause, such as:
    • Industrial Robot Innovations, which have reduced the number of automotive manufacturing workers.
    • Banking Automation Innovations, which have reduced the number of bank branches per capita [1].
  • Task-Based Technological Unemployment Cause, such as:
    • AI-based Worker Automation Innovations (worker automation).
    • Personal Credit Scoring Software Innovations (credit scoring software), which have displaced many Loan Officers.
  • Process-Based Technological Unemployment Cause, such as:
    • Digital Telephone Switch Innovations (e.g., in the late 1970s telephone switch operators.
    • Introduction of Process Re-engineering, like the Factory Line.
  • Historical Technological Unemployment Cause, such as:
    • Automobile Innovations, which have reduced the number of horse industry workers (and working horses).
    • Invention of Corporate eMail Systems in the 1990s.
  • ...
• Counter-Example(s):
  • a Technological Employment Cause.
  • a Frictional Unemployment Cause.
  • a Skill-Mismatch Unemployment Cause.
  • a Depressed Economic Demand Unemployment.
• See: Botsourcing, Luddism, Post-Scarcity Society, Technology-Induced Class Conflict.

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References

2023

• (Eloundou et al., 2023) ⇒ Tyna Eloundou, Sam Manning, Pamela Mishkin, and Daniel Rock. (2023). “GPTs Are GPTs: An Early Look at the Labor Market Impact Potential of Large Language Models.” arXiv preprint arXiv:2303.10130 https://doi.org/10.48550/arXiv.2303.10130

2018

• http://www.dailymail.co.uk/sciencetech/article-5835537/Citibank-warns-slash-10-000-jobs-replaces-human-workers-robots-five-years.html
  • 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.

2014a

• http://en.wikipedia.org/wiki/Technological_unemployment
  • 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.

2014b

• (Brynjolfsson & McAfee, 2014) ⇒ Erik Brynjolfsson, and Andrew McAfee. (2014). “The Second Machine Age: Work, Progress, and Prosperity in the Time of Brilliant Technologies." W W Norton & Company. ISBN:0393239357

2014c

• (Hughes, 2014) ⇒ James J. Hughes. (2014). “Are Technological Unemployment and a Basic Income Guarantee Inevitable Or Desirable?.” In: Journal of Evolution and Technology, 24(2).

2014d

• (Hummels, 2014) ⇒ David Hummels. (2014). “Man Versus Machine and the Future of Work." Presentation at 2014 Dawn or Doom Conference.
  • DESCRIPTION: How have rapid improvements in automation and expert systems changed the kinds of work for which humans are needed? What is the logical end point of this progression, and will there be anything left for humans to do?

2013a

• (The Economist, 2013-09-24) ⇒ The Economist. (2013-09-24). “Get a life - Working hours.” In: The Economist, Sep 24th 2013.
  • QUOTE: BERTRAND RUSSELL, the English philosopher, was not a fan of work. In his 1932 essay, “In Praise of Idleness”, he reckoned that if society were better managed the average person would only need to work four hours a day. Such a small working day would “entitle a man to the necessities and elementary comforts of life.” The rest of the day could be devoted to the pursuit rof science, painting and writing. Russell thought that technological advancement could free people from toil. John Maynard Keynes mooted a similar idea in a 1930 essay, "Economic possibilities for our grandchildren", in which he reckoned people might need work no more than 15 hours per week by 2030. But over eighty years after these speculations people seem to be working harder than ever. The Financial Times reports today that Workaholics Anonymous groups are taking off. Over the summer Bank of America faced intense criticism after a Stakhanovite intern died. But data from the OECD, a club of rich countries, tell a more positive story. For the countries for which data are available the vast majority of people work fewer hours than they did in 1990

2013b

• (Condon & Wiseman, 2013) ⇒ Bernard Condon, and Paul Wiseman. (2013). “AP IMPACT: Recession, tech kill middle-class jobs.” In: Associated Press – Wed, Jan 23, 2013
  • QUOTE: Occupations that provided middle-class lifestyles for generations can disappear in a few years. Utility meter readers are just one example. As power companies began installing so-called smart readers outside homes, the numbe rof meter readers in the U.S. plunged from 56,000 in 2001 to 36,000 in 2010, according to the Labor Department. In 10 years? That number is expected to be zero.

2013c

• (Smith, 2013) ⇒ Noah Smith. (2013). “The End of Labor: How to Protect Workers From the Rise of Robots.” In: The Atlantic, Jan 14 2013.
  • QUOTE: Technology used to make us better at our jobs. Now it's making many of us obsolete

2013d

• Derek Thompson. (2013). “How to Freak Out Responsibly About the Rise of the Robots.” In: The Atlantic, Feb 5.
  • QUOTE: 40 years erom now, grappling with the fallout of an automated economy might be the most important economic issue of our time Today, however, worrying about robots taking over the economy feels more like an intellectual exercise. There's no need for an artificial crisis over artificial intelligence.

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.

2013f

• (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.

2013g

• Rebecca Burn-Callander, (2013-08-29). “Artificial intelligence 'will take the place of humans within five years'.” In: The Telegraph 29 Aug 2013
  • The company is currently focused on replacing traditional sales and marketing roles but is also moving into the customer care and call centre space. New projects for an NHS cancer hospital and a major Japanese electronics company are already under way. “There are applications for this system in hundreds of industries,” he said. Mr Aksenov provides the technology to brands under licence with a one-off implementation fee to “teach” the system. Unlike hiring humans, however, “AI only has to learn once,” he said. “Within five years we will have a system that truly knows more than a human could ever know and is more efficient at delivering information,” he said. “It will replace many of the boring jobs that are currently done by humans. Unfortunately, this may take some jobs from the economy by replacing human beings with a machine. But it is the future.”

2012a

• (Dobbs, Madgavkar et al., 2012) ⇒ Richard Dobbs, Anu Madgavkar, Dominic Barton, Eric Labaye, James Manyika, Charles Roxburgh, Susan Lund, and Siddarth Madhav. (2012). The world at work: Jobs, pay, and skills for 3.5 billion people]." McKinsey Global Institute Report, June 2012
  • QUOTE: A potential surplus of 90 million to 95 million low-skill workers around the world, or around 10 percent of the supply of such workers. Labor forces of advanced economies could have as many as 32 to 35 million more workers without college education than employers will need. In India and younger developing countries, there could be as many as 58 million surplus low-skill workers in 2020.

2012b

• (Krugman, 2012b) ⇒ Paul R. Krugman. (2012). “Robots and Robber Barons.” In: The New York Times - Opinion, 2012-12-10 Journal.
  • QUOTE: Still, can innovation and progress really hurt large numbers of workers, maybe even workers in general? I often encounter assertions that this can’t happen. But the truth is that it can, and serious economists have been aware of this possibility for almost two centuries. The early-19th-century economist David Ricardo

2012c

• (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.

2012d

• (Vardi, 2012a) ⇒ Moshe Y. Vardi. (2012). “Consequences of Machine Intelligence.” In: The Atlantic, 2012(10).

2012e

• (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.

2012f

• (Markoff, 2012) ⇒ John Markoff. (2012). “Skilled Work, Without the Worker." New York Times, August 18, 2012.
  • QUOTE: ... The arms work so fast that they must be enclosed in glass cages to prevent the people supervising them from being injured. And they do it all without a coffee break — three shifts a day, 365 days a year. ... This is the future. A new wave of robots, far more adept than those now commonly used by automakers and other heavy manufacturers, are replacing workers around the world in both manufacturing and distribution.

2011a

• (Economist - Babbage, 2011-11-04) ⇒ The Economist. (2011). “Difference Engine: Luddite legacy.” In: The Economist, Nov 4th 2011.

2011b

• (Brynjolfsson & McAfee, 2011) ⇒ Erik Brynjolfsson, and Andrew McAfee. (2011-10-17). “Race Against The Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy." Digital Frontier Press. Kindle Edition.

2011c

• (Fleck et al., 2011) ⇒ Susan Fleck, John Glaser, and Shawn Sprague. (2011). “The compensation-productivity gap: a visual essay.” In: Monthly Labor Review Online, 134(1).

2010

• http://en.wiktionary.org/wiki/technological_unemployment#Noun
  • Unemployment caused by the replacement of workers by machines or artificial intelligence technology.

2009

• (Ford, 2009) ⇒ Martin Ford. (2009). “The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future." CreateSpace. ISBN:1448659817

2003

• (Levy et al., 2003) ⇒ David H. Autor, Frank Levy, and Richard J Murnane. (2003). “The Skill Content of Recent Technological Change: An Empirical Exploration.” In: The Quarterly Journal of Economics. doi:10.1162/003355303322552801

2002

• (Card & DiNardo, 2002) ⇒ David Card, and John E DiNardo. (002). “Skill Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles."
  • QUOTE: The rise in wage inequality in the U.S. labor market during the 1980s is usually attributed to skill-biased technical change (SBTC), associated with the development of personal computers and related information technologies. We review the evidence in favor of this hypothesis, focusing on the implications of SBTC for economy-wide trends in wage inequality, and for the evolution of wage differentials between various groups. A fundamental problem for the SBTC hypothesisis that wage inequality stabilized in the 1990s, despite continuing advances in computer technology.

2001

• (Hanson, 2001) ⇒ Robin Hanson. (2001). “Economic Growth Given Machine Intelligence.” In: Journal of Artificial Intelligence Research.

2000

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

1995

• (Rifkin, 1995) ⇒ Jeremy Rifkin. (1995). “The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era.” In: Putnam Publishing Group. ISBN:0-87477-779-8.

1965

• (Good, 1965) ⇒ Irving John Good. (1965). “Speculations Concerning the First Ultraintelligent Machine.” In: Advances in computers Journal, 6(31).
  • QUOTE: The survival of man depends on the early construction of an ultra-intelligent machine.

1942

• (Neisser, 1942) ⇒ H. P. Neisser. (1942). “'Permanent' Technological Unemployment:" Demand for Commodities Is Not Demand for Labor.” In: The American Economic Review, 32(1).

1930

• (Keynes, 1930) ⇒ John Maynard Keynes. (1930). “Economic Possibilities for Our Grandchildren (1930).” In: Essays in persuasion .
  • QUOTE: There is evidence that the revolutionary technical changes, which have so far chiefly affected industry, may soon be attacking agriculture. We may be on the eve of improvements in the efficiency of food production as great as those which have already taken place in mining, manufacture, and transport. In quite a few years -- in our own lifetimes I mean -- we may be able to perform all the operations of agriculture, mining, and manufacture with a quarter of the human effort to which we have been accustomed.

    For the moment the very rapidity of these changes is hurting us and bringing difficult problems to solve. Those countries are suffering relatively which are not in the vanguard of progress. We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come -- namely, technological unemployment. This means unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.

    But this is only a temporary phase of maladjustment. All this means in the long run that mankind is solving its economic problem. I would predict that the standard of life in progressive countries one hundred years hence will be between four and eight times as high as it is to-day

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