Technological Unemployment


Technological unemployment is the loss of jobs caused by technological change. Such change typically includes the introduction of labor-saving machines or more efficient processes. Historical examples include artisan weavers reduced to poverty after the introduction of mechanized looms. A contemporary example of technological unemployment is the displacement of retail cashiers by self-service tills.

That technological change can cause short-term job losses is widely accepted. The view that it can lead to lasting increases in unemployment has long been controversial. Participants in the technological unemployment debates can be broadly divided into optimists and pessimists. Optimists agree that innovation may be disruptive to jobs in the short term, yet hold that various compensation effects ensure there is never a long term negative impact on jobs. Whereas pessimists contend that at least in some circumstances, new technologies can lead to a lasting decline in the total number of workers in employment. The phrase “technological unemployment” was popularized by Lord Keynes in the 1930s. Yet the issue of machines displacing human labor has been discussed since at least Aristotle’s time.

When I was working with a Bank, I was a computer operator. The new computer helped to lay off many operator and pay roll staff. If a 1970s computer needed 9 operators. By 1984, the new technology cut the work force by half. Many never economically recovered.
All participants in the technological employment debates agree that temporary job losses can result from technical innovation. Similarly, there is no dispute that innovation sometimes has positive effects on workers. Disagreement focuses on whether it is possible for innovation to have a lasting negative impact on overall employment. Levels of persistent unemployment can be quantified empirically, but the causes are subject to debate. Optimists accept short term unemployment may be caused by innovation, yet claim that after a while, compensation effects will always create at least as many jobs as were originally destroyed. While this optimistic view has been continually challenged, it was dominant among mainstream economists for most of the 19th and 20th centuries.
Several commentators have argued that traditional forms of welfare payment may be inadequate as a response to the future challenges posed by technological unemployment, and have suggested a basic income as an alternative. People advocating some form of basic income as a solution to technological unemployment include Martin Ford,  Erik Brynjolfsson, Robert Reich and Guy Standing. Reich has gone as far as to say the introduction of a basic income, perhaps implemented as a Negative income tax is “almost inevitable”,[67] while Standing has said he considers that a basic income is becoming “politically essential”.

While many on the political right remain skeptical, forms of basic income have been proposed even by Libertarians such as von Hayek and Friedman. Republican president Nixon’s Family Assistance Plan , which had much in common with basic income, passed in the House but was defeated in the Senate. One objection to basic income is that it could be a disincentive to work, but evidence from pilots in India, Africa, and Canada is that this does not happen; that a Basic Income encourages low level entrepreneurship and more productive, collaborative work. While new revenue raising ideas have been proposed such as Martin Ford’s “wage recapture” tax, funding a generous basic income would be challenging, and the idea has been dismissed as utopian. Even from a progressive view point, there are concerns that a basic income set too low may not help the economically vulnerable, especially if financed largely from cuts to other forms of welfare. One alternate model is that the cost would be distributed across the private sector instead of the public sector. Companies across the economy would be required to employ humans, but the job descriptions would be left to private innovation, and individuals would have to compete to be hired and retained.
But still, The Universal Income is the only solution since projections show that in the future people having jobs will be the rare exception.

In Congress Bernie Sanders and I will note this and pass a Bill for the Unconditional Universal Income. I suggest $30,000 a year for each household.

The reality is in the next 25 years factories and other industries will be fully automated and many jobs face extinction.

  • Sorry I cannot fund everyone on Facebook, too much of a huge wave of people. Thanks for being a fan of my blog and supporting me and Bernie.

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