Do machines help or harm employment?
It seems we have a love-hate relationship with machines. On the one hand, machines help us improve our standard of living, but on the other hand machines can destroy jobs that used to be done by people. N.C. State University economist Mike Walden considers whether machines are a net plus or a net minus for employment.
“You can clearly see situations where in the past machines have destroyed jobs. Manufacturing and farming are two really good examples. We used to have, for example, a third of our workforce in farming. We used to have about 20 percent of our workforce in manufacturing. Now both of those are down to single-digit percentages, because a lot of that effort has been overtaken by machines, as you say, and technology. Yet we’re eating better – in fact, more probably than we need – than ever before.
“Also, there are a lot of manufactured products out there that are cheaper … et cetera. So clearly in that case, yes, we have seen machines destroy jobs, but it did result in an improvement in our standard of living.
“Now, on the other hand …, there can be a situation where machines and development of machines actually create jobs. For example, they can free up workers to do other things. Go back to my examples about farming and manufacturing. We’ve lost a lot of people – workers – in those sectors. Yet that means that they’ve been available to move in the other sectors like health care, tourism and personal services.
“And then, finally, development of machines can actually create new jobs – for example, the computer industry. Computers have created a lot of jobs, not only manufacturing computers, but people writing software, people servicing computers and maintaining those computers.
“So it very much is a mixed relationship.”
Category: Economic Perspective