What Will Happen to the Jobs?

What Will Happen to the Jobs?

DOI: 10.4018/978-1-5225-2179-2.ch002
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The Elimination Of Jobs

This discussion is not new and have taken place at every major shift in the level of productivity improvements that can be achieved by adopting technology based productivity improving solutions. In 1548, Edward VI, King of England (1547-53) even issued A Proclamation against Those that Doeth Innovate. Albeit that this was primarily aimed at innovation in religious pursuit, it still illustrates the perennial fear of change. The term Luddite as referring to someone who is opposed to industrialisation, automation, computerisation or new technologies in general is actually unfair since those textile workers involved in the movement in the period 1811-1816 were not afraid of technology per se, but were “labour strategists” aiming to gain a better bargaining position with their employers (Merchant, 2014) and were neither mindless, nor completely irrational, nor even completely unsuccessful (Hobsbawm, 1965; Boudon, 1989).

In manufacturing this is nothing new and both Charles et al., (2013) and Jaimovich & Siu (2012) concludes that that the ongoing decline in manufacturing employment and the disappearance of other routine jobs is causing the current low rates of employment across OECD countries.

As we can see from the discussion in the previous chapter there will elimination of jobs in all sectors, although it will primarily hit the services sector as a consequence of replacing labour with capital equipment resulting in productivity improvements that for large employers in mature markets will result in a productivity improvement exceeding the growth in the underlying demand that cannot, for most firms, be compensated by an equivalent or larger growth in market share. This will then result in the elimination of jobs that are replaced with technology and the elimination of jobs in all categories following from productivity increase exceeding the sum of underlying demand growth and market share growth of all firms in the economy. Davis (2015) point out that in the US, employment in many large corporations fell after the 1960s following the adoption of new business models and competition from new businesses and product types, frequently directly or indirectly enabled by new productivity enhancing technologies. Another trend observed by Hathaway & Litan (2014) is that while older firms were growing in size in the US, the ratio of firm size to enterprise size (workplaces) grew consistently over the last decade, suggesting that firms expand by having more workplaces, but with fewer people in each location.

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