Technology Isn’t a Job Killer

A WSJ book review by Tamar Jacoby. Ms. Jacoby is president of Opportunity America, a nonprofit group working to promote economic mobility. The book reviewed is Learning by Doing by James Bessen.Excerpts:

"Although robots at the distribution center have eliminated some jobs, he says, they have created others—for production workers, technicians and managers. The problem at automated workplaces isn’t the robots. It’s the lack of qualified workers. New jobs “require specialized skills,” Mr. Bessen writes, but workers with these skills “are in short supply.”"

"Consider the ATM, a classic example, supposedly, of technological progress that has all but eliminated a white-collar job. In fact, Mr. Bessen shows, the number of bank tellers working in the U.S. has risen since the 1970s, when ATMs were introduced. How could that be? The average bank branch used to employ 20 workers. The spread of ATMs reduced the number to about 13, making it cheaper for banks to open branches. Meanwhile, thanks in part to the convenience of the new machines, the number of banking transactions soared, and banks began to compete by promising better customer service: more bank employees, at more branches, handling more complex tasks than tellers in the past. 

Another job category that has grown rather than shrunk as a result of technology: licensed practical nurses, or LPNs. Many in the medical profession expected computerized medicine to eliminate LPNs, who were thought to lack the skills needed to run new, sophisticated machines. Instead, developments like lasers and advanced endoscopy made it possible to perform minimally invasive surgery at short-stay clinics, which have multiplied in the past three decades, creating jobs and raising wages for licensed practical nurses. “The effect of technology on jobs is simply more dynamic and more complicated than many people recognize,” Mr. Bessen writes."

"In Mr. Bessen’s view, the Industrial Revolution also vindicates his optimism. He revisits the story of the power loom that Karl Marx made so much of in “Das Kapital.” “History discloses no tragedy more horrible than the gradual extinction of the English handloom weavers,” Marx wrote. In fact, Mr. Bessen shows, the power loom was the best thing that ever happened to the textile industry and its workers.

True, it took decades for workers and managers to learn specialized skills and reorganize production. Weavers had to adapt their technique to the faster machines—new knots, new hand movements, new ways of preventing broken threads—and develop monitoring and planning skills so they could coordinate work on several looms at once. Meanwhile, management made changes to training and hiring to take advantage of more experienced workers. None of this happened overnight—but when it did, productivity soared, jobs proliferated and eventually wages caught up."

"One of the book’s most suggestive ideas is captured in its title: learning by doing. Weavers in the 19th century learned on the job, finding their own methods of using technology more productively. So did employees at the companies that bought Mr. Bessen’s software and adapted it for their specialized needs. This can be a long, painful learning curve—developing skills through trial and error and reorganizing production. But it usually pays off in the long term."