Technology blamed for job losses
More sophisticated software takes toll on middle-class employment
By Bernard Condon and Paul Wiseman Associated Press
NEW YORK — Five years after the start of the Great Recession, the toll is terrifyingly clear: Millions of middle-class jobs have been lost in developed countries the world over.
And the situation is even worse than it appears.
Most of the jobs will never return, and millions more are likely to vanish as well, say experts who study the labor market. What’s more, these jobs aren’t just being lost to China and other developing countries, and they aren’t just factory work. Increasingly, jobs are disappearing in the service sector, home to two-thirds of all workers.
They’re being obliterated by technology.
Year after year, the software that runs computers and an array of other machines and devices becomes more sophisticated and powerful and capable of doing more efficiently tasks that humans have always done. For decades, science fiction warned of a future when we would be architects of our own obsolescence, replaced by our machines; an Associated Press analysis finds that the future has arrived.
“The jobs that are going away aren’t coming back,” says Andrew McAfee, principal research scientist at the Center for Digital Business at the Massachusetts Institute of Technology and co-author of “Race Against the Machine.” “I have never seen a period where computers demonstrated as many skills and abilities as they have over the past seven years.”
The global economy is being reshaped by machines that generate and analyze vast amounts of data; by devices such as smartphones and tablet computers that let people work just about anywhere, even when they’re on the move; by smarter, nimbler robots, and by services that let businesses rent computing power when they need it, instead of installing expensive equipment and hiring IT staffs to run it. Whole employment categories, from secretaries to travel agents, are starting to disappear.
“There’s no sector of the economy that’s going to get a pass,” says Martin Ford, who runs a software company and wrote “The Lights in the Tunnel,” a book predicting widespread job losses. “It’s everywhere.”
The numbers startle even labor economists. In the U.S., half of the 7.5 million jobs lost during the Great Recession paid middle-class wages, ranging from $38,000 to $68,000. But only 2% of the 3.5 million jobs gained since the recession ended in June 2009 are midpay. Nearly 70% are low-paying jobs; 29% pay well.
In the 17 European countries that use the euro as their currency, the numbers are even worse. Almost 4.3 million low-pay jobs have been gained since mid-2009, but the loss of midpay jobs has never stopped. A total of 7.6 million disappeared from January 2008 through last June.
Experts warn that this “hollowing out” of the middle-class work force is far from over. They predict the loss of millions more jobs as technology becomes even more sophisticated and reaches deeper into our lives. Maarten Goos, an economist at the University of Leuven in Belgium, says Europe could double its middle-class job losses.
Some occupations are beneficiaries of the march of technology, such as software engineers and app designers for smart-phones and tablet computers. Overall, though, technology is eliminating far more jobs than it is creating.
To understand the impact technology is having on middle-class jobs in developed countries, the AP analyzed employment data from 20 countries; tracked changes in hiring by industry, pay and task; compared job losses and gains during recessions and expansions over the past four decades, and interviewed economists, technology experts, robot manufacturers, software developers, entrepreneurs and people in the labor force who ranged from CEOs to the unemployed.
The AP’s key findings:
• For more than three decades, technology has drastically reduced the number of jobs in manufacturing. Robots and other machines controlled by computer programs work faster and make fewer mistakes than humans. Now, that same efficiency is being unleashed in the service economy, which employs more than two-thirds of the work force in developed countries. Technology is eliminating jobs in office buildings, retail establishments and other businesses consumers deal with every day.
• Technology is being adopted by every kind of organization that employs people. It’s replacing workers in large corporations and small businesses, established companies and start-ups. It’s being used by schools, colleges and universities; hospitals and other medical facilities; nonprofit organizations and the military.
• The most vulnerable workers are doing repetitive tasks that programmers can write software for — an accountant checking numbers, an office manager filing forms, a paralegal reviewing documents for key words to help in a case. As software be comes more sophisticated, victims are expected to include those who juggle tasks, such as supervisors and managers — workers who thought they were protected by a college degree.
• FOR A LONGER VERSION OF THIS REPORT, GO TO FREEP.COM
DAVE MARTIN/ASSOCIATED PRESS
Webb Wheel Products President Duane Ricketts in Cull-man, Ala.: “Everyone is waiting for the unemployment rate to drop, but I don’t know if it will much.”
JOB LOSSES, GAINS
Midpay jobs aren’t coming back from the Great Recession, partly because jobs in the middle are the most vulnerable to computer technology.
That shortfall has helped prevent the total jobs lost in the recession from being regained. A look at how midpay jobs have fared in the five most recent U.S. recessions that were followed by arecovery that lasted at least 42 months:
• In the Great Recession, 3.76 million, or 50%, of the 7.48 million jobs lost were in midwage industries, according to Moody’s Analytics. But only 2% of the 3.52 million jobs gained in the 42 months since the recession ended have been midpay.
• In the 2001recession, 566,000, or 35%, of the 1.603 million jobs lost were midpay. And 30% of the 2.47 million jobs created in the 42 months after the recession were midpay.
• In the 1990-91recession, 717,000, or 58%, of the 1.24 million jobs lost were midpay. And 38% of the 6.62 million jobs created in the 42 months after the recession were midpay.
• In the 1981-82 recession, 1.99 million, or 70%, of the 2.83 million jobs lost were midpay. And 38% of the 10.45 million jobs created in the 42 months after the recession were midpay.
• In the 1973-75 recession, 874,000, or 69%, of the 1.26 million jobs lost were midpay. And 46% of the 10.97 million jobs created in the 42 months after the recession were midpay.
— Associated Press
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