Does Greater Productivity Mean More Jobs, or Fewer?

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Posted by: briansittley Comments: 0 0 Post Date: June 9, 2015

Cotton_mill.0There has always been a certain tension between the notion of increasing workplace productivity – an eternal necessity in business – and the counter-argument that it often means lost jobs.  As the conventional wisdom often shows, improved productivity via machines, computers and advancing technologies can sometimes run counter to the cause of the workers they displace.
But it’s often the case that increased productivity and advanced technology solutions mean those old jobs are replaced by newer, better jobs.  From centuries ago when industrial farm equipment displaced farm workers that eventually led to a huge spurt in factory workers, one technology often displaces another, and one job is often replaced by another.  Collectively, historically, the new jobs gained always have seemed to be adequate to replace, at least in numbers, the old jobs displaced.  True, this did not occur without much pain, particularly if you were among the displaced, and it took time as well.
But over time, job counts and workers have risen pretty consistently.
Today some question whether our particularly intensive and rapid displacement of many common jobs can be replaced quickly enough by the higher-level jobs that commerce and progress demand that we create.  We alluded to this in an earlier post titled So When Will You Be Replaced by a Robot?
Now the debate continues with the publication of a new book by James Bessen of Boston University Law School entitled “Learn by Doing: The Real Connection between Innovation, Wages and Wealth.”
In brief, (notes a recent review in the May 21 Wall Street Journal) Bessen notes how robots at the distribution center have eliminated some jobs while creating new ones for production workers, technicians and managers.  Robots aren’t the problem, he says; it’s the lack of qualified workers, thus hinting at the larger problem today.  Those with “specialized skills” are in short supply.  His is a deeply contrarian view.
Conventional wisdom says that robots and technology do more harm than good by “destroying jobs and hollowing out the middle class.”  And we’ve seen how today in particular (again, note our earlier post) higher level jobs from bank tellers to truck drivers and warehouse workers are all at risk.  But then, we’ve also seen that, for example, when ATMs arrived, the ranks of bank tellers remained level for many years, as more branches required more people despite the ATMs to handle the increased and more complex business brought about.  In other words, things only sometimes – but not always – play out as expected by the so-called conventional wisdom.
In “Learning by Doing” Bessen “combines policy arguments with a practical sense of the workplace” as WSJ reviewer Tamar Jacoby points out.  Bessen points to the advent of desktop publishing, largely the result of innovation at Apple which, while eliminating keyboarding jobs at many firms, replaced them with jobs for programmers, product designers and customer service.
Historically, he recalls that Karl Marx wrote of the doom of the English handloom weavers as a “horrible tragedy” but which, in fact, begat the power loom, “the best thing that ever happened to the textile industry and its workers.”
And so the debate rages – far longer at least than a mere blog post can tally.  In the end, both the weavers and the desktop publishers did just as Bessen’s title suggests: they learned by doing.  They found ways to use technology more productively.  They adopted it to their specialized needs.  In a long and painful learning curve, jobs were displaced, but other, higher-skilled jobs replaced them.
Indeed, this time it may be “different.”  The pace of change may be simply too fast today.  But given historical precedent dating back centuries, it’s still hard not to be optimistic.

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