The Impact of Technology on Employment

New technologies are increasingly being adopted in manufacturing, retail and clerical work, and in many professions including education, law, medicine and financial services. Many people argue that automation, software and robots will replace people in manufacturing. Other people argue that technology creates jobs. Still, others argue that it is destroying jobs faster than it is creating them. However, the widespread adoption of technology is destroying jobs and causing widespread unemployment.

Advanced automation has been very common in manufacturing for decades, especially in China and the United States (Rogers, Takegami and Yin). Fewer people work in car factories than in the last century. Industrial robotics was adopted around 1980s (Rogers, Takegami and Yin). Most car factories routinely employ machines to weld and paint body parts. These tasks were mostly handled by humans. In the modern world, industrial robots are more far cheaper and flexible than their predecessors: They are even performing simple jobs in a variety of sectors (Rogers, Takegami and Yin).

Majority of economists believe that technology enhances productivity and creates wealth in the society but has a negative impact: it eliminates the need for many categories of jobs. For example, technological advancements such as Google’s driverless car are a good indicator of the further impact of what technology might do in the future. In economics, productivity of labor is a vital indicator of growth. It is also an indicator of wealth creation and a measure of progress. Therefore, there is improved productivity of labor but the number of employees needed in increasingly smaller: this leaves the today’s typical worker worse off than in yester years.

There are less dramatic changes created by technological advancement in clerical work and professional services but the changes have potentially far larger impact on employment. For example, Web technologies, databases, improved analytics and artificial intelligence are replacing human beings in the performance of many routine tasks. Technological advancements are making it possible to replace human effort in countless traditional white-collar jobs, including customer service and post office services (Batt, Lloyd and Weinkopf). For example, it is common for customer care departments in many public institutions to address clients through automated public address systems (Batt, Lloyd and Weinkopf). Many researchers claim that such systems are “digital versions of human intelligence” (Batt, Lloyd and Weinkopf). The technologies are being adopted in jobs once thought to require people.

Digital technologies cause slow job creation, reduce the number of jobs and cause painful shock to workers as they are forced to adjust their skills. Additionally, entrepreneurs tend to exploit new technologies, causing existing skills to become redundant. Businesses may be forced to invest more in the training of workers (Spitz-Oener). The need to reduce the total costs will also force them to hire fewer workers (Spitz-Oener). The exploitation of digital technologies is being facilitated by the availability of data, personnel and enough computing power. The large-scale adoption of digital technologies is causing long-term involuntary unemployment.

There are many scientists who argue that robots need to be manufactured and run by humans and will not lead to job loss (Youndt). Others argue that robots may not be adopted easily as it takes long to teach a robot to recognize an object especially in a moderately unstructured environment like an office. Some organizations may not readily adopt robots as people may be far better at responding to changes and unexpected events in their environment. Human beings are also good at packaging various items together.

The middle class has been the most affected by automation; computer technologies have increasingly replaced people in such tasks as bookkeeping, and other repetitive production jobs especially in the manufacturing sector. Robots increasingly need minimal training to work on simple tasks. They are being used in work places where there is much risk to employees. Computer-aided jobs requiring problem-solving skills and creativity have multiplied; these jobs attract high pay. Scientists predict that automated processes and robots with superhuman skills will take over wide variety of human tasks within the next 50 years (Spitz-Oener). The evidence is based on the increasingly few workers required in factories and the adoption of advanced computing.

There is an increasingly trend of pushing advanced computing into many spheres of professions such as finance, as medicine and customer service. The rapid adoption of advanced computing has created a huge gap between economic winners and losers. Such technologies tend to promote “technology experts” (Rogers, Takegami and Yin). For example, an organization that creates a tax preparation system or software might eliminate the need for many accountants while it makes millions or billions of dollars.

There are a few jobs that may that benefit from computer assistance, but many others are likely to be negatively affected in the future (Lohr). Jobs that involve engineering, design and programming; they entail the use of basic problem-solving abilities that humans have over machines. Those that do not need less problem-solving abilities such as attending to customers, packaging, dusting and spraying may be greatly affected in the future (Lohr).

Labor-displacing technologies can be classified under automation, mechanization and process improvement (Youndt). While automation and mechanization involve transfer of tasks from humans to machines, process improvement entails the elimination of tasks altogether (Youndt). The three have led to the decrease in the number of average working hours and the number of workers. Some economists argue that technological unemployment may lead to structural unemployment.

While there is an obvious enthusiasm for advanced technologies, people are not very conscious about the loss of jobs: yet the jobs may vanish forever. People are likely to purchase cars that consume more machine hours than man-hours to manufacture; there are likely to ignore the real impact of such purchases. Furthermore, some people claim that there are other factors associated with slow job creation in the 21st century including, the 2008 economic regression and events related to global trade (Youndt).

Many economists do not consider the impact of technology in employment; they only consider it as a vital factor of production. Some argue that technology enables a firm lower labor inputs and consequently lower profits, leading to more sales and higher managers. Other economists argue that the additional purchasing power causes an increase in aggregate demand, thereby increasing employment due to the expansionary effect of technology on the economy. Other economists argue that the automation can destroy jobs in a disturbing way as most workers do not have the capabilities to take up the new jobs. Still, some economists fail to notice that short-run unemployment may be as a result of lack of competition in products and labor markets, among other artificial imperfections. Lohr (2011) argues that although a hesitant economy has caused job shortage in America, advancing technology has harshly magnified the effect. Therefore, different attitudes toward technology lead to a scenario where people ignore the role of technology in destroying jobs.


Technological advancement has enabled organizations to employ people while still producing at higher-than-subsistence levels of output. Using simple technologies or no technologies at all can lead to full employment but cannot lead to efficient production or improve standards of living. Therefore, technology is important. However, the rate at which technological advancements are embraced leaves little to be desired as many people may end up unemployed. It would be more prudent to control the adoption of technologies in some productivity areas.

Works Cited

  1. Batt, R., C. Lloyd and C. Weinkopf. "Restructuring Customer Service: Labor Market Institutions and Call Center Workers in Europe and the United States." Gautiê, J. and J. Schmitt. Low-Wage Work in the Wealthy World. New York: Russell Sage Foundation, 2009. 421-466.

  2. Lohr, S. More Jobs Predicted for Machines, Not People r October 23, 2011 . 23 October 2011.

  3. Rogers, E. M., S. Takegami and J. Yin. "Lessons learned about technology transfer." Technovation 21.4 (2001): 253–261.

  4. Spitz-Oener, Alexandria. "Rising Education Demands: Looking Outside the Wage Structure." Journal of Labor Economics (2006): 235-270.

  5. Youndt, M. A. "Human Resource Management, Manufacturing Strategy, and Firm Performance." Academy of Management Journal 39.4 (1996): 836-866.