Technology and employment

My friend asked me: “Why the number of unemployment is so high? Why jobs are so difficult to find today than few years ago and no one know when it will be better?

I told him: “It probably will not getting better, especially for some labor jobs. With globalization, many jobs are being outsourced to lower cost countries but that is only the beginning. I think there will be more changes in the near future that will surprise you. Today, technology dominates every business. Technology is about increasing productivity. Making more things, faster, cheaper, and with fewer people. For the past ten years, companies have spent billions of dollars on technology to gain better productivity and it has worked. The problem is that it has worked so well that many jobs are completely eliminated. Of course, there are new jobs created by technology too but it requires different kinds of knowledge and skills. Today people see more job losses but do not know why. Since the financial crisis in the U.S, the recession has spread to many countries in Europe then eventually to Asia. This recession happened four years ago and so far we have not see any sign of recovery yet. Many people blame governments, some blame the banks, some blame corruptions, but the real cause is technology.

He surprised: “Why technology? What has happened with technology?”

I explained: “With technology, many factories are automated so they do not need more workers. With computer control machinery, most factories have reduced the number of workers from few hundreds to ten or twenty. If it cannot be automated then the company moves the entire factory to lower cost countries. That is why most manufacturing jobs are gone and never come back. What happen to manufacturing workers? If they do not have other skills that the industry needs, they will be unemployed for a long time.”

“Few years ago, many businesses were conducted by service companies. For example, when you want to travel you go to travel agency to buy tickets. Today people arrange their travels via the internet, they can purchase tickets, hotels or transportation on line so there is no need for travel agents anymore. The same thing also happen to music stores, today people do not buy record or CD but download music from the internet. Basically, you can buy almost everything via the internet and that is why e-commerce companies such as Amazon, eBay are doing well. Technology impacts offices and banking too. Because most people use ATMs or online banking now so there is no need for bank workers anymore. With world processor on computer, there is no need for secretary or typist. You can find that many jobs are being replaced by computer technology. Even government jobs who used to be “Safe jobs” are now being replaced by e-government which is better, faster, and cheaper. This situation is happening all over the world; begin in developed countries than move to developing countries and eventually to every country. That is why today unemployment is getting worse as many jobs are being replaced by technology. People who rely on labor works will have difficulty in finding jobs.

With global economy, competition is fierce. Every company must apply technology to gain better productivity. Most jobs now have technology components to get thing done faster, better and higher quality. Even manufacturing jobs also require knowledge of computer. Workers must know how to operate inventory systems, production planning systems, test systems, digital scanning, RFID tags, machine control system and many other technologies. Even worker with low skilled need to know about technology too because in the near future many jobs will use certain technology. People who fail to learn new skills, people who are not keeping up with technology will be left behind. They will not be able to find jobs. As more factories are automated, even manufacturing jobs will be difficult to find.”

“Politicians and government people talk a lot about create jobs, they make a lot of promises but most have no idea what has happened. Very few people understand that technology is the root cause. They do not know that technology destroys many jobs but also create many new jobs. Governments talk about protecting jobs, creating jobs to win elections but fail to come up with programs to train people in technology. Their thinking is in the past, many are still living in the 20th century therefore they cannot solve problem of the 21st century. That is why unemployment is high, jobs are difficult to find and it will getting worse every year.”

“No one can stop progress. Technology makes things better, faster, cheaper, more productive, and higher profits. It opens new opportunities for people who know how to prepare for it. Technology destroys old things and creates new things. We are experiencing this transition now and that is why so many people are confused. They do not know what to do. Some may have ideas but most are still uncertain. As long as thing does not happen to them, they ignore it until it is too late. The transition from old jobs to new jobs opens a lot of new opportunities. To capture them we must improve the education system to prepare the students for the new thing. Only by doing that, we can solve the unemployment problem. Only by train people in new technology, we can have a knowledgeable workforce. Only by having skilled workers, we can improve the economy. There is no other choice because the old jobs are gone and never come back.

Sources

  • Blogs of Prof. John Vu, Carnegie Mellon University

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