The Beginning of the End of Work

by Brian Dean (originally printed in In Business magazine)

The workerless society may be much closer than we think. 75% of the work force, in most developed countries, engage in work that is little more than simple repetitive tasks. Most of these jobs are vulnerable to replacement by automation. But that’s not all – technology is increasingly taking over tasks previously thought to require human intelligence. Office workers and managers are now under threat as corporations restructure to take advantage of the huge productivity gains made possible by the new technologies.

Economists have traditionally argued against the likelihood of the decline of work, believing that productivity gains produce wealth, which is used to expand markets, thereby creating new jobs. Admittedly, this has been the case in the past. For example, when technology began to displace agricultural workers, a new growing sector – manufacturing – was able to absorb those displaced. Then, between the mid fifties and the early eighties, as manufacturing became increasingly automated, displaced factory workers were absorbed into the growing service sector (banking, insurance, accounting, law, airlines, retail, etc). In most modern cities today, nine out of ten jobs are in the service sector.

As we approach the millennium, however, service sector jobs are increasingly falling to advanced technology – without the emergence of any new growth areas of the scale required to absorb the redundant office workers. It has been estimated, for example, that human secretaries currently spend more than 45% of their time filing papers, photocopying, delivering messages, posting letters and waiting for assignments. Electronic office systems make all of this redundant.

Sophisticated labour-saving technology is being developed at an accelerating rate. Hundreds of companies now use computer systems to screen job applications. One such system, called Resumix, optically scans incoming CVs, reads and evaluates the applicants’ details, and makes decisions concerning applicant suitability (field tests have shown the Resumix to be as skilled as human personnel managers in evaluating job applicants).

Speech recognition software is already being used to replace human customer service telephonists in many companies. These companies face a simple choice: use the new technology or lose competitive advantage and go out of business. In either case job losses will occur.

In 1993 the US retail giant, Sears, cut 50,000 jobs from its merchandising division. That same year, its sales revenues rose by 10%. General Electric, a world leader in electronic manufacturing, reduced its global workforce from 400,000 in 1981 to 230,000 in 1993, whilst tripling its sales. The tyre company, Goodyear, cut 24,000 jobs between 1988 and 1992, and increased productivity by 30% in the same period. During the writing of this article, Electrolux announced they would be eliminating 12,000 jobs over the next two years. Large layoffs such as these are becoming increasingly common as the electronic revolution forces corporations to ruthlessly restructure in order to stay competitive.

According to renowned management expert, Professor Charles Handy, we are losing more jobs than we can replace. This is inevitable, he says, because developed countries can’t sustain the level of growth needed to create sufficient jobs to replace those lost through technologically enhanced productivity. Automation is shedding jobs faster than markets can expand to create new jobs. Handy remarks that we all need the equivalent of an earthquake to remind us to take nothing for granted in the world of work and economics.

Another economic commentator who believes we need a shock to awaken us, is Jeremy Rifkin, president of the Foundation on Economic Trends, in Washington, DC. According to Rifkin, “not a single world leader seems willing to entertain the possibility that the global economy is moving inexorably toward a shrinking labour market with potentially profound consequences for civilisation”. He criticises the logic behind ‘trickle-down technology’ – the theory, held by most conventional economists, which says that advances in technology and productivity create falling prices, generating greater demand, and thus leading to the creation of more jobs than are lost.

In his book, The End of Work, Rifkin presents evidence showing the steady rise of unemployment in most developed nations: “With demand seriously weakened by rising unemployment and underemployment in most of the industrial world, the business community has turned to extending easy consumer credit in an effort to stimulate purchasing power.” (See also Rifkin’s article, ‘Vanishing Jobs’).

Consumer debt has rocketed to alarmingly high levels in both the US and the UK, coinciding with increasing losses of full-time jobs. Unemployment has doubled in Britain since 1979, and the vast majority of new jobs created have been temporary or part-time (since 1992, 90% of jobs created have been temporary or part-time). One of the most notable growth areas during this period has been the credit card companies, which have experienced phenomenal success.

Technological advances continue to have the effect of reducing the commodity value of human labour. Economic rewards have traditionally been distributed on the basis of contributions to production (at least in theory). As human contributions to production reduce in significance and quantity, relative to automated contributions, employment wages will become inadequate to live on. This is already occurring – most reports of the last few years indicate that the low-paid are becoming financially worse off.

Every technological advance implemented in industry effectively increases wealth - otherwise it wouldn’t be utilised. Wealth is piling up all around us. The technological revolution which brought this wealth should be seen as a social phenomenon – it was not created by any one individual or group; neither is it a creature solely of the marketplace – it rightly ‘belongs’ to everyone.

In a world of decreasing demand for human labour, the economic rewards derived from technology will need to be distributed to people in ways that have nothing to do with the amount of work, if any, they perform.

(Acknowledgement: this article uses data from the book The End of Work by Jeremy Rifkin, which contains much more of interest – check it out).