The Impact of Computerization on the Labor Market

Discussion in 'Too Hot for Swamp Gas' started by mdgator05, Jan 21, 2014.

  1. mdgator05
    Online

    mdgator05 Premium Member

    Joined:
    Dec 9, 2010
    Messages:
    7,116
    Likes Received:
    293
    Trophy Points:
    83
    Ratings Received:
    +981
    Great paper out of Oxford being publicized by the Economist.

    http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf

    (Subscription required for the Economist Article:

    http://www.economist.com/news/leade...de&spv=xm&ah=9d7f7ab945510a56fa6d37c30b6f1709

    The substantive results from this paper are perhaps the clearest answer to the question of why we are seeing a boom in corporate profits while the labor market remains historically weak. Prior research has shown that about 22-29% jobs will be sent overseas in the next 10-20 years (Blinder 2009 as cited in this paper).
    This paper shows that 47% of all jobs have a high probability (defined as above 70% likelihood) of being computerized in the next decade or so. In addition, 19% more have a medium probability of being computerized over the same period.

    At an industry level, the most likely to be computerized are "sales and related," "office and administrative support," "construction and extraction," "farming, fishing, and forestry," production, and transportation and material moving.

    The least likely to be computerized are management and business financial (although they have a surprising amount that might be computerized in this field), "computer, engineering, and science," "education, legal, community service, arts, and media," and healthcare.

    Fine arts, originality, negotiation, persuasion, social perceptiveness, and assisting and caring for others are the job characteristics least likely to be automated. The most likely to be automated involve manual or finger dexterity and those that occur in cramped conditions.

    The table at the end contains a list of all jobs tested with a probability for being computerized in the next decade.

    Unsurprisingly, low wage and low education jobs are most likely to be computerized. As low wage jobs become more easily replaced by computerization, wages will fall in these jobs. This will obviously increase income inequality. I suspect that a new system will need to be developed to deal with this going forward, as I could definitely see income inequality rising to historically unsustainable levels as labor value plummets in lower education and lower wage jobs.

    Unfortunately, our political system in the US is stuck in the debates of the 1970s-1980s about how much government rather than dealing with the issues that threaten somewhere between 47-76% of all jobs in the next couple of decades and redesigning the economy to deal with this transition. Obviously, this is a very complicated and difficult problem, but politicians and activists on both sides of the aisle have been ignoring this for a variety of reasons, including that solutions might involve changes that are very uncomfortable for both sides and that the money being dumped into politics has been fundamentally short-sighted in maintenance of the status quo. I hope work like this begins to gain more traction outside of academic circles and starts pushing politicians to act.
    • Informative Informative x 4
  2. philnotfil
    Offline

    philnotfil Well-Known Member

    Joined:
    Apr 8, 2007
    Messages:
    12,947
    Likes Received:
    225
    Trophy Points:
    63
    Ratings Received:
    +870
    A fascinating question. What does our economy look like when we do not need all of the people we have to produce the goods that the people we have consume?
    • Like Like x 1
  3. oragator1
    Online

    oragator1 Premium Member

    Joined:
    Apr 3, 2007
    Messages:
    13,170
    Likes Received:
    527
    Trophy Points:
    113
    Ratings Received:
    +2,224
    This isn't talked about enough in the demise if the middle class.
    Many jobs that weren't outsourced were made redundant by mechanization, automation and efficiencies gained through other software and hardware. People ways talk about the new economy, but with so few people containing the right skills for it, how do you do anything but create a 2 tier system? There are basically those that foster and execute the new production methods, and those without those skills who are dependent on them but produce little.
    • Like Like x 1
  4. mdgator05
    Online

    mdgator05 Premium Member

    Joined:
    Dec 9, 2010
    Messages:
    7,116
    Likes Received:
    293
    Trophy Points:
    83
    Ratings Received:
    +981
    Yep it is eventually an end to the traditional economic structure. I haven't heard a great answer to that question, but it is the question that needs to be asked.
  5. mdgator05
    Online

    mdgator05 Premium Member

    Joined:
    Dec 9, 2010
    Messages:
    7,116
    Likes Received:
    293
    Trophy Points:
    83
    Ratings Received:
    +981
    Absolutely. Many middle class jobs relied on physical dexterity for their living. That is no longer an option going forward. So far, we are just sort of ignoring it, but that is going to become harder to do as this process moves forward.
  6. QGator2414
    Offline

    QGator2414 VIP Member

    Joined:
    Aug 24, 2009
    Messages:
    13,229
    Likes Received:
    191
    Trophy Points:
    63
    Location:
    Ocala
    Ratings Received:
    +738
    I did not know W was so good with computerization...
    • Funny Funny x 1
  7. tegator80
    Offline

    tegator80 Well-Known Member

    Joined:
    May 29, 2007
    Messages:
    6,332
    Likes Received:
    1,147
    Trophy Points:
    113
    Location:
    Richmond, VA
    Ratings Received:
    +2,929
    Yes, the "conventional" middle class jobs, ones that have limited mental skills but pay well, can eventually be usurped by technological advancements (see auto industry assembly lines). So what is going forward are opportunities for those who can see how to harness the technology for strategic business use and the pretty low paid support staff. The semi-skilled labor force gets eliminated.

    Personally, that is why it is probably best for most people going forward to start their own businesses. If you are a self starter and have enough confidence in your skills then at least you are in control of your own destiny, or at least you are pretty much in control of your reasons for your successes and failures. Some moron above you isn't making you do unproductive things.
  8. cjgator76
    Offline

    cjgator76 Well-Known Member

    Joined:
    Apr 9, 2007
    Messages:
    17,442
    Likes Received:
    89
    Trophy Points:
    48
    Ratings Received:
    +583
    Good stuff, md.

    I wonder if this kind of information is being shared with young people making educational/career decisions?
    • Like Like x 2
  9. Gatorrick22
    Offline

    Gatorrick22 Well-Known Member

    Joined:
    Apr 3, 2007
    Messages:
    34,987
    Likes Received:
    2,834
    Trophy Points:
    113
    Ratings Received:
    +5,995
    I hope these people have better English skills than the Indians do. That rules out China too. So where are these jobs going?
  10. wgbgator
    Offline

    wgbgator Sub-optimal Poster Premium Member

    Joined:
    Apr 19, 2007
    Messages:
    23,885
    Likes Received:
    492
    Trophy Points:
    83
    Location:
    Orlando, FL
    Ratings Received:
    +2,180
    Maybe we should just rejecting the thinking behind this question altogether. There is an element of determinism in it that bothers me. But if we accept it on its face, I think we can support markets without conceding entirely to the logic of the market. If the idea is that capitalism should make our lives easier (rather than provide jobs for everyone), I think we need to get over the idea that "everyone must work," or at least the idea that everyone must work 40-50 hours a week.
  11. mdgator05
    Online

    mdgator05 Premium Member

    Joined:
    Dec 9, 2010
    Messages:
    7,116
    Likes Received:
    293
    Trophy Points:
    83
    Ratings Received:
    +981
    You mean the outsourced ones? They are largely going to China and South and Southeast Asia, amongst other places. However, this paper specifically addresses computerization, which is that the jobs are disappearing due to technology. They aren't going anywhere, they are simply ceasing to exist.
  12. mdgator05
    Online

    mdgator05 Premium Member

    Joined:
    Dec 9, 2010
    Messages:
    7,116
    Likes Received:
    293
    Trophy Points:
    83
    Ratings Received:
    +981
    I hope it will be pretty soon. I showed a friend of mine who is going into Counseling, which is one of the jobs that are very unlikely to be replaced. Honestly, regardless of interest, unless you are going into something like counseling or medical, these results help underline the importance of learning computer programming. At this point, I think we really need to consider elevating computer programming to the same level as Math, History, or English in high schools, as we will still need some people to run the computers, at least for a little while.
    • Agree Agree x 1
  13. QGator2414
    Offline

    QGator2414 VIP Member

    Joined:
    Aug 24, 2009
    Messages:
    13,229
    Likes Received:
    191
    Trophy Points:
    63
    Location:
    Ocala
    Ratings Received:
    +738
    Agreed. While I am strong at math...computer programming and I never got along. I was fortunate that UF had the flexibility to create the perfect undergrad degree for me BABA with a specialization in Industrial Engineering. Followed by getting my Masters in Industrial Engineering and focusing on the parts I enjoyed and wanted to use. Let's just say I will delegate the computer programming out... :)
  14. Gatorrick22
    Offline

    Gatorrick22 Well-Known Member

    Joined:
    Apr 3, 2007
    Messages:
    34,987
    Likes Received:
    2,834
    Trophy Points:
    113
    Ratings Received:
    +5,995
    How do you computerize labor, or eleminate the need for a laborious job with a computer? Or is this about less pencil pusher jobs?
  15. mdgator05
    Online

    mdgator05 Premium Member

    Joined:
    Dec 9, 2010
    Messages:
    7,116
    Likes Received:
    293
    Trophy Points:
    83
    Ratings Received:
    +981
    Lots of different ways. In production/manufacturing and transportation (specifically ports), we switch to robots. In banking, we move from tellers to ATMs and replace loan officers with programs, which are becoming more and more accurate with the massive amount of information available. Cashiers are being replaced by self-service computer kiosks in many retail stores (while retail stores as a whole are replaced by Internet shopping which requires less labor). Telemarketers are being replaced by automated systems. Look at the last couple of pages of the pdf linked in the OP for a whole variety of jobs with a high likelihood of being replaced.

    Here is a good example of how ports are moving to robots. A container can be unloaded from a ship and put into position for shipping without a single person being directly involved in what used to require a substantial amount of human labor.

    Last edited: Jan 22, 2014
    • Like Like x 1
  16. HallGator
    Online

    HallGator Administrator VIP Member

    Joined:
    Apr 3, 2007
    Messages:
    45,101
    Likes Received:
    1,223
    Trophy Points:
    113
    Location:
    Outer Limits
    Ratings Received:
    +4,649
    I've long believed that the jobs being created by computerization are not on a one-to-one basis for the ones they are eliminating. I also believe it is a very real problem.
    • Like Like x 1
    • Agree Agree x 1
  17. corpgator
    Offline

    corpgator Well-Known Member

    Joined:
    May 9, 2010
    Messages:
    6,319
    Likes Received:
    164
    Trophy Points:
    63
    Ratings Received:
    +792
    Not everyone should learn to program. It is not for everyone and requires a very logical yet creative mind. It's the same silly push to get everyone to go to college. Not everyone should.
  18. mdgator05
    Online

    mdgator05 Premium Member

    Joined:
    Dec 9, 2010
    Messages:
    7,116
    Likes Received:
    293
    Trophy Points:
    83
    Ratings Received:
    +981
    The problem is that the gains for going to college are only going to increase in future years as the jobs that rely more on physical skill and dexterity are going to be replaced by computerization, as pointed out in the article in the OP. Programming skill is going to be more and more important for most professions moving forward. As computers become more and more prevalent in tasks previously performed by humans, the ability to modify the computers will become more and more central to everyday functioning.
  19. gatorev12
    Offline

    gatorev12 Well-Known Member

    Joined:
    Jan 27, 2009
    Messages:
    11,869
    Likes Received:
    340
    Trophy Points:
    83
    Ratings Received:
    +1,750
    Computerization has absolutely affected law. Legal software programs like Lexis and Westlaw allow attorneys to research case law in minutes--when it used to take hours.

    It's made law firms and attorneys more efficient in their time--but has had the net effect of decreasing demand for legal services. I read recently in the Bar Journal that legal services was 3% of the total economy in 1979...in 2009, it was down to 1%. And the number of attorneys in that time has exploded.
  20. gator10010
    Offline

    gator10010 VIP Member

    Joined:
    Aug 23, 2008
    Messages:
    1,364
    Likes Received:
    9
    Trophy Points:
    38
    Ratings Received:
    +43
    I see the gains of going to college becoming less and less. Especially in computer programming where this skill can easily be outsourced to some foreign country and especially at the outrageous expense of a college education.

    Learning a trade will be way more valuable in 10-20 years than any computer programming degree. As a matter of fact their is a shortage of tradesmen in this country right now and the shortage of tradesmen under the age of 55 is alarming.

    If my son where to graduate high school today I would tell him forget college go get a job as a helper to an electrician, plumber, A/C contractor etc because not only is there opportunity in these fields for a young person these trades won't be getting outsourced. People are always going to want cold air, electricity and running water.

    Will they get filthy rich? Maybe, maybe not but they will be more than able to provide themselves and their families with a comfortable life.
    • Agree Agree x 2

Share This Page