Should new technology compensate job losses?

OK i'm going to put out a theory i have been rolling around in my head for a while. I know it will never happen, and has a bit of 'leftist' leanings but i still think it is an interesting idea nonetheless.

So back in the day (1930's onwards) people we excited about what the future held and how new products would revolutionize their lives. Humans would no longer have to work, as robots/machines would do everything, allowing us to relax and enjoy being human.

What has really happened is each time a new technology has replaced jobs then those people out of work have to find new work etc. More and more technology means more and more job losses, and in turn puts strain on other areas. Bascially the corporations are the only ones benefitting from the technology, not the people who it is replacing.

So, what if, each new technology that was to cause job losses (Say, driverless trains here in Aus for example), had to pay a % of that 'saving' for the life of those who lost thier jobs?

This would mean the train drivers would then have some income, meaning they could then pursue other passions and possibly come up with new business ideas. It would also mean that virtually everyone would want to automate their jobs, meaning that you would assume more innovation would happen.

The only downside i can see is that new technologies may not be implemented as the savings dont stack up, but in theory technology will keep improving, whereas the human whose job it replaces will die and then no % would need to be paid to the next generation.


Bit of a long post but would love members thoughts....

Good topic Prawn.
(For a commie )

Re: Should new technology compensate job losses?

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No.

prawn_86 said:

Bascially the corporations are the only ones benefitting from the technology

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And consumers getting better products, lower prices.

Blacksmiths are still trying to get compensation from the car industry.

Prawn, I have been thinking along such lines for a long long time and my ideas are a bit different to yours, but along a similar track.

The following is based on a closed economy (no outside influences) for simplicity, but it should be implementable in a more open economy.

As technology reduces the amount of effort humans must put in to achieve the same output (perhaps with a moderate increase to compensate for population growth and the expectation of an ever increasing standard of living), the excess labour capacity should be absorbed not by making more people redundant, but by reducing everyone's workload proportionally. So instead of ending up with 10% unemployment, everyone should work 10% less.

So that companies can still compete, wage/salary costs per hour worked should remain the same, with the usual increases that we expect to compensate for inflation etc. However, there should be no increase in wages/salary in order to maintain the same weekly gross pay.

Since the technology has been presumably introduced because it is more efficient than human labour, the costs of goods and services should fall correspondingly. That enables business owners to maintain the same profits, but sell at lower prices, and it enables the wage/salary earners to buy the same amount of goods and services as before, even though they have less take home pay (this is not too dissimilar to your idea of a % of the cost savings being paid to those who are made redundant).

By maintaining full employment but at less worked hours, as opposed to our current system of creating redundancies for some and overworking others, we should end up with a more efficient economy with less wasted resources. Unemployment causes many ills in society that impose costs that would otherwise not be needed (social ills needing extra policing costs, health issues due to depression etc., direct costs of providing the dole etc.). Those left employed must support an increasing share of the economy's tax burden to pay for these otherwise unneeded costs).

It's very simplistic what I am suggesting, but it seems a better way of ensuring everyone benefits from technological innovation, not just a few.

A couple of very good ideas and worthwhile aims.
but...
It can only work in a homogenous society, where everybody has a similar expertise and exposure to technology.
Taking the example of train drivers: They might be quite happy getting paid for doing nothing. But what will the coal miner say, whose job has NOT been made redundant, so he has to front up at the coal face every day, drill holes, blast, and sweat it out. How would the teacher feel, who had to learn a new gadget every other year (if not month) in order to teach the students safe browsing/ communicating/ internet dating? No reduction there either.

As far as 10% shorter working days go, some tasks, like cleaning offices, removing rubbish, milking cows ... won't diminish. So, you'd have to employ 9% more cleaners, ... and other menial workers - at a time, when all they crave is more spare time to study, so they can work in a tidy office or "invent things."

In agriculture, tractors are dreadfully destructive to jobs. One farmer with a tractor can do the job of a hundred men with shovels.

Come to think of it, the shovel is an equally evil invention. One man with a shovel can do the work of five with bare hands.

Of course, even a man with bare hands puts two one-handed men out of work.

Really, to be fair, agriculture should be performed by people laying on the ground pushing seeds around with their noses. Or, if I understand you correctly, let the farmer drive the tractor but make him directly or indirectly pay for a thousand useless dolts to sit and think weighty thoughts.

bellenuit said:

It's very simplistic what I am suggesting, but it seems a better way of ensuring everyone benefits from technological innovation, not just a few.

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Good idea too imo. That way it spreads the benefits equally.

pixel said:

Taking the example of train drivers: They might be quite happy getting paid for doing nothing. But what will the coal miner say, whose job has NOT been made redundant, so he has to front up at the coal face every day, drill holes, blast, and sweat it out. How would the teacher feel, who had to learn a new gadget every other year (if not month) in order to teach the students safe browsing/ communicating/ internet dating? No reduction there either.

As far as 10% shorter working days go, some tasks, like cleaning offices, removing rubbish, milking cows ... won't diminish. So, you'd have to employ 9% more cleaners, ... and other menial workers - at a time, when all they crave is more spare time to study, so they can work in a tidy office or "invent things."

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My theory (with no backing what-so-ever, is that those then with more time on their hands would go and innovate to come up with new ideas that would help out other industries. It would also encourage the coal miners, to think of ideas/inventions that will reduce their workload.

I see your point on the 2nd point, but i guess thats where i haven't taken growth into account. Milking cows now is a lot quicker than 100 yrs ago, we just need to milk more of them due to growth. Same as cleaning, quicker due to technology, but more spaces to clean

waimate01 said:

Really, to be fair, agriculture should be performed by people laying on the ground pushing seeds around with their noses. Or, if I understand you correctly, let the farmer drive the tractor but make him directly or indirectly pay for a thousand useless dolts to sit and think weighty thoughts.

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That's not sarcasm i detect is it?

I actually come from a farming family, and TBH technology has helped farmers hugely. Tractors can now almost drive themselves with sat nav etc. Irrigation is now much more efficient, as are fertilisers etc. Farmers are the perennial whingers though.


I guess a lot of it comes down to growth. My old man is happy with the size of his properties, and see's no need to expand. He now works a lot less per day than he did when he was starting out, a lot of this is due to improved methods/technology. And he is happy with his lot in life.

What i am talking about is inventions/products that directly put people out of a job. If you have an improvement in methods and choose to put that extra time back into more work, that is your choice, but if you are laid off due to a new technology that is beyond your control.

The trouble is, it's hard to think of any technology that hasn't put someone out of work.

The overall outcome of this, would seem to be that it just holds us back in the past. Nobody could afford an MP3 player (of whatever type), for example, if we had to compensate the numerous people this and directly related technology has put out of work. Likewise we couldn't afford to fly if the ticket price included payment to the railways and ships, which themselves were still paying out steam engine mechanics and people shovelling coal since diesel engines were introduced.

Smurf1976 said:

Nobody could afford an MP3 player (of whatever type), for example, if we had to compensate the numerous people this and directly related technology has put out of work.

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But Smurf, we are compensating them, but in a less efficient way. Those out of work are being paid the dole to do nothing. Unemployment creates lots of social problems, which are a huge cost to society (more police, medical staff, etc.). These extra costs are being borne by those lucky enough to have a job, through increased taxation, which flows back into higher wage demands to the company producing the MP3 players.

If the workload were shared by everyone then most of these tax costs would not apply. Everyone takes home less, because they work less. But the cost of MP3 players should fall, because the costs of production have fallen, and even though everyone has less take home pay, they should still be able to afford the cheaper products. In fact the market might be bigger as everyone has some income rather than just a few and everyone has more leisure time.

Smurf1976 said:

The overall outcome of this, would seem to be that it just holds us back in the past. Nobody could afford an MP3 player (of whatever type), for example, if we had to compensate the numerous people this and directly related technology has put out of work. Likewise we couldn't afford to fly if the ticket price included payment to the railways and ships, which themselves were still paying out steam engine mechanics and people shovelling coal since diesel engines were introduced.

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My thinking was more along the lines of when a machine/technology/automation replaces a persons job. I cant think of any instances where an mp3 player takes over someones actual job.

Also, if it were a % paid, even just until the retirement age of those directly affected, it would only be for a maximum of say 30 years and would be ever diminishing as people getting paid hit retirement age.

As i said it would never happen but i still think it is an interesting theory. I dont see an airplane as directly replacing anyone either, job losses in industries yes, but not direct replacement

prawn_86 said:

My theory (with no backing what-so-ever, is that those then with more time on their hands would go and innovate to come up with new ideas that would help out other industries.

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This is assuming someone who was a train driver had the capacity to think up new ideas for industries other than their own.
If they in fact had that capacity, wouldn't they have been already pursuing this instead of doing something as dull as driving a train?

I don't mean to be pouring cold water on the overall concept which is interesting.
But I can't see anything along these lines actually happening unless the members of our society were suddenly to all be equal in terms of intelligence, social status and imagination.

prawn_86 said:

My thinking was more along the lines of when a machine/technology/automation replaces a persons job. I cant think of any instances where an mp3 player takes over someones actual job.

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In the past, every radio station had what was known as a "sound library". Basically, think of a library but filled with vinyl records rather than books. My mother spent many years working in such a place for the ABC, and they had one at literally every station since there was no alternative. Either the records (or cartridges for the more frequently played music) were played or there was no music to go to air - simple as that.

Now there's just a computer with a hard drive and that's it. No records, no cartridges, not even CD's. Most of that went to the tip or was given away (depending on what station it was).

This technology has also enabled "local" national broadcasting. So you can have an announcer sitting in Sydney (for example) doing a "local" program in Launceston (for example) complete with local advertising and all the rest. The announcer talks and files are created and "dropped in" to the local programming which simply goes to air from a PC. There's nobody at all physically at the local station, especially after hours, and yet there's a "live and local" broadcast supposedly happening.

We'd still have real live radio announcers on-air at every station right through the day if not for this and related technology. And they wouldn't be able to easily record a 6 hour program in 25 minutes without it either (hint: you'd be amazed at just how little time certain high profile announcers actually spend in the studio).

That's an example of an entire industry that has radically changed due to the adoption of new technologies, and yet the end product is substantially the same to the point that many listeners wouldn't even realise what's going on.

But as for the overall point, isn't the issue that new technology creates new opportunities? If it wasn't for the agricultural workers "freed up" by the development of tractors etc then we'd have nobody spare to even think about flying planes or developing computers. Making work obsolete is thus a "good" thing in that sense - it's what enables us to do other things.

This also lies at the heart of broader debates, especially that about energy. If we end up with 10% of the workforce employed just to produce energy, then that's a lot of other things we can not longer do simply because there won't be anyone to do it. That is why the "creates jobs" argument falls flat economically - that it employs too many people is precisely what is wrong with clean energy. It's simply doesn't offer the same leverage to human labour that oil does and that's the problem.

All this technology really comes down to one thing - leverage of human labour. If we can get 1:100 then we're not going to settle for something that only offers 1:10 instead. That's the crux of the debate about energy - oil or coal has a higher ratio than solar or wind. Hence the engineers focusing on massive turbines and solar towers that, if sufficiently scaled up, will reduce the number of people required per unit of output.

It's the same with pretty much everything. What our technological society has really done is to leverage labour. We get more done for the same amount of human effort. Economists refer to this as "productivity".

Well that's the theory at least. Where the problems arise is that all this assumes a closed economy, as do the various political debates about workplace laws, pollution taxes and so on. But once you start making agricultural workers or factory workers (for example) redundant here and replacing them with new jobs in new industries in China then that's where the wheels fall off in a big way - it only works whilst the new innovations occur in the same place as the losses.

I remember when CD's first appeared. The first one I saw was made in Germany but it wasn't long before an Australian factory was set up. Of course we set up local production - of course we did. The record industry died and CD's came in - jobs lost and jobs created in the same country so no real problems.

Now look at the manufacturing industry in general today. Jobs lost in Australia as technology changes, but the new jobs are created in China. There's the problem.

To some extent the same underlying problem exists within Australia also. At one time every significant company had an office in every state where now they are all concentrated in Sydney and Melbourne to the detriment of other states and the regions generally.

I remember quite well that my first bank account was "kept" at a certain branch, and that the "head" branch of this bank was the one in central Hobart. In 2012 it's irrelevant where the account is "kept" and head office would be Sydney or Melbourne since banks no longer have a head office in every state. Should office workers in Sydney (for example) compensate the entire state of SA or Tas because of this change?

One thing I'll predict is this. Globalisation will not last. How long it survives is anyone's guess, but my thinking is that we're closer to the end than to the beginning. There's just too much pain associated with it all.

This thread ultimately is just another reflection of the problems of globalisation when you really think about it. If the new jobs were being created in the same place as the old ones being lost, in Australia, then we wouldn't be having this discussion...

The premise that new technology destroys jobs is totally false imho As such any attempt to correct it will be futile and counter-productive.

Yes at the micro level there are immediate job losses (tractors substituting farmers), but at the macro level, there are other jobs created (designing, building, marketing, selling, driving, maintaining the tractor).

If technology do in fact destroy jobs at a macro level, we should see a continued decline in employment over the last 100 years. But that hasn't been the case. New jobs are constantly being created by new technology. How many ppl make a living on the Internet compared to 20 yrs ago? Or in IT 50 yrs ago? Or in aerospace 80 yrs ago?

Indeed, new technology also create indirect jobs. By adopting new technology we make things more efficient, and that creates increased demand because of lower costs and more spare time/capacity. E.g. The vacuum cleaner saves the housewife 10hrs a week cleaning time and that indirectly creates more job a for magazine editors and yoga instructors etc.

A compensation scheme will likely stall many innovations. In fact, it is this process of creative destruction that actually advances the human society.

skc said:

The premise that new technology destroys jobs is totally false imho As such any attempt to correct it will be futile and counter-productive.

Yes at the micro level there are immediate job losses (tractors substituting farmers), but at the macro level, there are other jobs created (designing, building, marketing, selling, driving, maintaining the tractor).

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Agreed.

Unless of course the tractor is being used in Australia but was produced somewhere else. That's when the argument falls apart.

Smurf1976 said:

Agreed.

Unless of course the tractor is being used in Australia but was produced somewhere else. That's when the argument falls apart.

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Not quite:
Even if tractors are imported, there's stevedores to unload the ships; sales staff to distribute the tractors across the country; mechanics to maintain them; shed builders to provide dry storage space on farms; ...

skc said:

The premise that new technology destroys jobs is totally false imho As such any attempt to correct it will be futile and counter-productive.

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I think this is the crux of the matter. The premise that you say is false is actually the promise of new technology.

How many times have we watched programs or read articles about new technology and the promise is that this technology would eliminate or make certain work a lot easier. New technology should reduce the amount of work that needs to be done by humans and it does, but rather than enjoying the increased leisure time, humans increase their aspirations to the point that they must reuse the freed up time in work activities to achieve those new aspirations. The housewife who buys a washing machine reducing her workload by 10 hours a week now wants a plasma TV and must work as a cleaner for someone else for 10 hours a week to be able to afford it. Not a good example, but you get my drift.

Technology promises us a reduced workload and it delivers it, but we are not content to stay as we are and now want extra things requiring us to work more.

On the "Thoughts before dying" thread Julia just wrote: "Is it perhaps preferable to accept a more ordinary standard of living in exchange for peace of mind and some genuine leisure time to spend doing what benefits us physically and emotionally? "

Isn't that what we are failing to do. Technology is delivering, but we are refusing to accept what we are being given, because we value material things ahead of leisure and less stress etc.

bellenuit said:

Isn't that what we are failing to do. Technology is delivering, but we are refusing to accept what we are being given, because we value material things ahead of leisure and less stress etc.

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Yeh thats kinda along my line of thinking also. I guess it has to do with the constant state of growth capitalism requires.

Back in the 50's 'average' people thought the future would involve not working as much and enjoying more leisure time. Now we probably work as many hours (if not more), admittedly in probably easier jobs, but yet i would say that the 'average' person has less leisure due to increased travel/communications/spending per person.

As i said this is a purely conceptual thread, of course its not going to happen, nothing radical will ever happen with the Western system until it is forced to.

skc said:

The premise that new technology destroys jobs is totally false imho As such any attempt to correct it will be futile and counter-productive.

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+1

When I studied computer science in the early 80's, computing was a black art and computer geeks were regarded with suspicion within organisations and ostracised at parties. Everyone worried that computers would take over the world and put everyone out of work.

Fast forward 30 years. I would argue that the whole IT revolution has not reduced the workforce by a single job. Quite the reverse. Catch a bus or walk through a food hall and listen to snippets of conversation. Everyone's a goddamn web designer or wrestling with Excel or comparing ISPs. Pretty much everyone has a computer on their desk, and one at home, and another in their pocket. Fifteen years ago, computer guys were popular at parties because they could help you make your printer work; now everyone's got IT skills and there's a veritable *army* of people to support, manufacture and fiddle with society's IT.

(There's actually a counter argument here that technology fails to achieve that which it sets out to achieve, and there's quite some merit to that - average transit times in Sydney are slower today than 100 years ago; IT-intensive management reporting systems produce weekly sales figures with more delay than manual systems of 50 years ago. But that's a different argument - the argument at hand is that technology puts people out of work and they should be compensated from some sort of monetary magic pudding. My refutation is that technology does not necessarily put people out of work - it changes the median job).

New technology creates better jobs, the old jobs say for instance relating it back to the farm of the farm labourer is replaced by the tractor. But then you get tractor manufacturing, tractor maintenance people, oil extraction industry to run them, etc. combined with more efficiency.

New technology is good long term.

The problems with job losses we are having at present in Australia is the high dollar.
My view is that mining should be taxed at the same level as the oil and gas industry in this country and the profits used to lower input costs to manufacturing such as electricity and to improve infrastructure such as better ports and roads (without tolls). We should also be running an investment fund as Peter Costello tried to set up with the Future Fund, to build up capital in the good times.

If it slows the mining industry a bit then that's good as once we have dug everything up we could be in a poor position.

Australia was built on those policies and we shouldn't let people forget it and ensure the country is run for all its citizens,not the select few at the top.

waimate01 said:

(There's actually a counter argument here that technology fails to achieve that which it sets out to achieve, and there's quite some merit to that - average transit times in Sydney are slower today than 100 years ago; IT-intensive management reporting systems produce weekly sales figures with more delay than manual systems of 50 years ago. But that's a different argument - the argument at hand is that technology puts people out of work and they should be compensated from some sort of monetary magic pudding. My refutation is that technology does not necessarily put people out of work - it changes the median job).

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Actually this is the point i was trying to get at.

Yes technology creates job, and yes thats a good thing. But imo, somewhere along the way, due to our contast growth model, we seem to have forgot (or not being able to convert) the fact that technology is supposed to make our lives easier and enable us to work less.

So in a few words:
What, in theory, could we do to enable current/very closely upcoming technologies to enable us to work less?