What will destroy our civilization? Overpopulation? Climate Change? One popular source of fear is the idea that technology will replace our jobs, leading to massive social unrest. A recent study blasts this fear into oblivion, however.
Rather than taking away our jobs, the increase of technology has provided more and better jobs in the past 150 years. According to a new study from Deloitte, technology is helping people leave hard, dull jobs and follow more caring and knowledge-based lines of work.
Government policies, however, have directly cost jobs—and may continue to be a drag on the economy. Robots can’t harm us—not nearly as bad as we harm ourselves.
A Brave New Job Market
In order to see if technology was harming the job market, economists at the consulting firm Deloitte studied census data from England and Wales, going all the way back to 1871. As The Guardian reported, “their conclusion is unremittingly cheerful: rather than destroying jobs, technology has been a ‘great job-creating machine.’”
Technology seems to be destroying jobs all around us—from automated fast food order machines to the possibility of self-driving taxi cabs. These potential job losses distract from the true story of technology during the last 150 years—a veritable employment explosion.
“The dominant trend is of contracting employment in agriculture and manufacturing being more than offset by rapid growth in the caring, creative, technology and business services sectors,” the Deloitte study reported. “Machines will take on more repetitive and laborious tasks, but seem no closer to eliminating the need for human labour than at any time in the last 150 years.”
Where Jobs Were Lost
One particular sector saw huge job losses—agriculture. In 1871, 6.6 percent of the English and Welsh workers toiled in the fields. Today, that number stands at 0.2 percent.
[pq]Robots can’t harm us—not nearly as bad as we harm ourselves.[/pq]
Jobs also disappeared in that tempting profession—clothes washing. In 1901, when 32.5 million people lived in England and Wales, 200,000 people worked as launderers. While the population grew to 56.1 million in 2011, the number of clothes washers dropped to 35,000.
“A collision of technologies, indoor plumbing, electricity and the affordable automatic washing machine have all but put paid to large laundries and the drudgery of hand-washing,” the report explains.
People still farm and wash their clothes—but technology has made both jobs easier, to the betterment of the job market. Fewer farmers can produce more food today, and fewer people have to pay someone else to do their laundry. If anything, these job losses are a net benefit.
The Jobs People Actually Want to Take
While jobs involving intense drudgery have declined, caring and knowledge-based lines of employment have opened up.
Even in such a short time span as 1992 to 2014, jobs in the care, education, and service markets have exploded in England and Wales. During that period, nursing assistant jobs increased by 909 percent, while workers in teaching and educational assistance jumped up by 580 percent. Welfare, housing, youth and community workers increased by 183 percent, and home care workers went up by 168 percent.
At the same time, less-desirable service jobs, such as weavers, typists, and company secretaries, declined by 79 percent, 57 percent, and 50 percent respectively.
Sectors like medicine, education, and professional services saw huge gains since 1871. In that year, England and Wales had 9,832 accountants—now the number stands at 215,678.
A Shift to Luxuries
Technology has cut the prices of food, clothing, and appliances, leaving more money to spend on entertainment and even grooming.
In 1871, there was only one hairdresser or barber for every 1,793 citizens. Today, there is one for every 287 people. Census data in the survey also showed the number of people employed in bars rose fourfold between 1951 and 2011.
“The stock of work in the economy is not fixed,” the report concludes.
The Bad News: Government Interference
Technology may not be taking our jobs, but government policies certainly are.
As The Daily Signal reported last month, the manufacturer of Oreo cookies has decided to relocate from Chicago to Mexico, costing the U.S. 600 jobs. “The leading ingredient in Oreos is sugar, and U.S. trade barriers currently require Americans to pay twice the average world prices for sugar,” Bryan Riley explained.
This high price redirects producers to either use even less healthy sugar substitutes—like high fructose corn syrup—or to leave the United States. As the International Trade Administration reported, Chicago has lost nearly one-third of its sugar manufacturing jobs in the last 13 years. “These losses are attributed, in part, to high U.S. sugar prices,” the report explained.
This, however, is a drop in the bucket compared to the job losses from the implementation of the Affordable Care Act—better known as Obamacare. Forbes’ Chris Conover estimates that the U.S. will lose a net 2.9 million jobs every year, due to the health law.
Conover arrives at this number by incorporating the Congressional Budget Office (CBO) estimate of 2.5 million jobs lost voluntarily, and adding the jobs that are likely to be lost involuntarily. Obamacare’s expansion of subsidies will lead people to choose to work fewer hours, the CBO admits, costing a net 2.5 million jobs.
But Conover explains that the employer mandate will likely cost between 57,000 and 87,000 low-wage jobs, while various taxes in Obamacare will likely result in a net loss between 668,000 and 934,000 jobs. Even worse, the law will weaken incentives for entrepreneurs, as it makes starting a business and hiring employees prohibitively expensive for new firms.
Increasing the minimum wage—as many liberals are advocating—will also cost jobs. Upping the minimum wage from $9 per hour to $15, works out to an annual tax of $12,480 per employee on employers. Ironically, this would help billionaires by hurting small businesses. Big firms can take the hit, but mom-and-pop shops are less likely to have that kind of money lying around. As small businesses close their doors, big businesses don’t have to face as much competition.
While technology disrupts the labor market, and ends up benefitting both workers and consumers, government attempts to pick winners, and ends up making us all losers. Free markets, by allowing supply and demand to run their course, give people more choices and make us all better off.