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Part II
Case Studies of amen Workers
and In~rm~n bchno~gy
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The Technological Transformation
of White-ColIar Work:
A Case Study of the Insurance Industry
BARBARA BARAN
Although white-colIar automation has received considerably
less press than robots on the assembly-line, the introduction of
computer-based technologies into the office has generated growing
concern that industrialized working conditions and technological
redundancy may be spreading to white-colIar settings. Because
of the pervasiveness of occupational sex segregation within the
office work force, it is also feared that women will bear the brunt
of the restructuring process. Feldberg and Glenn (1983), for ex-
ample, argue that whereas women's jobs are disproportionately
disappearing and their opportunities for upward mobility declin-
ing, men may actually benefit from the new technologies both
because they will dominate the more highly skilled technical and
professional jobs being created and because automation may cen-
traTize control in the hands of (male) senior managers and systems
analysts.
The limited numbers of case studies that have been published
on the impacts of office automation report conflicting findings.
25
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26
THE INSURANCE INDUSTRY
With regard to changes in the occupational structure, some re-
searchers have found that job loss is concentrated among low-
skilled clericals (Faunce et al., 1962; Roessner et al., 1985; Shep-
herd, 1971), implying a general upgrading of labor. Other studies
indicate, on the contrary, the elimination of skilled clerical ac-
tivities, resulting in a polarization of the occupational structure
(Feldberg and Glenn, 1977; Hoos, 1961; U.S. Bureau of Labor
Statistics, 1965~. Similarly, whereas some analysts have reported
less task fragmentation as the technology becomes more sophisti-
cated (Shepherd, 1971; Matteis, 1979; Sirbu, 1982; Adler, 1983;
Appelbaum, 1984), others suggest that job content is narrowed and
worker autonomy reduced (Murphree, 1982; Greenbaum, 1979;
Cummings, 1977; Feldberg and Glenn, 1983, 1977~. Finally, al-
though in all cases women experienced the greatest job loss, in
some reports it appeared that after automation women were rele-
gated to lower-skilled activities (Feldberg and Glenn, 1977; Mur-
phree, 1982), whereas in other accounts female clericals seemed
to benefit from the new labor process (Matteis, 1979; Cummings,
1977~.
The intent of my research on the insurance industry was to
contribute to this nascent literature. The findings reported here
are based on a two-year study of the impacts of automation on
that industry. The first phase of this research was an in-depth
case study of a major national property/casualty carrier, which
included 26 interviews with employees in various parts of the
company's operations (home office, branch office, data-processing
center, commercial group, and personal lines centers) and dif-
ferent levels of the occupational hierarchy, as well as analysis of
extensive quantitative personnel data which the company made
available. The second phase involved lengthy interviews with ex-
ecutives, personnel managers, and systems analysts in 18 other
companies, loosely stratified by size, product type, growth rate,
distribution system, and so on; members of the industry's trade
associations, agents' associations, and vendor companies were also
interviewed. Third, a structures] telephone survey was conducted
of 37 companies—21 life firms and 16 property/casualty firms-
again loosely stratified. All of the firms in both samples were
among the top 100 companies in their industry segment. Together
these 55 insurers account for approximately 55 percent of industry
employment; they range from firms of over 50,000 employees to
firms of less than 1,000. Finally, ~ have supplemented this field
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BARBARA BARAN
27
work with secondary source material from government agencies,
trade publications, and documents and survey data kindly pro-
vided by the trade associations and consultants to the industry.
Two kinds of conclusions emerged from this effort. The first,
of course, are numbers of concrete observations which wiD be
presented in summary form in this paper. In addition to these
sectoraIly specific findings, however, analysis of the insurance in-
dustry generated a set of more general hypotheses concerning the
kinds of factors it is necessary to consider when attempting to as-
sess the impacts of office automation technologies on a work force.
Since the following discussion is not sufficiently comprehensive to
cover all these issues, ~ want to discuss them briefly here before
turning to the more detailed findings of the study.
First, as the case of the insurance industry made clear, it
is virtually impossible to separate technological innovation from
other factors affecting the competitive dynamics of an industry.
The competitive environment Is both a major determinant of the
speed of diffusion of innovation and quite apart from technolog-
ical change—significantly affects the demand for labor.
Second, and closely related, is that the impacts of the new
technologies on the labor force are not limited to their effects on
the organization of the work process. In insurance, changes in
product offerings and in the structure of both the industry itself
and the firms within it promise to be equally important influences
on the kind and amount of labor employed.
Third, it was clear from this study that "office automation"
cannot be analyzed as a single phenomenon. Impacts vary on the
basis of the specific kinds of technology being introduced (includ-
ing, importantly, the generation of that technology) and the na-
ture of the work process being automated (originating often in the
unique characteristics of the product, market, and organizational
structure of the industry). In terms of the first, ~ would underline
the importance of periodizing the process of office automation;
some of the disagreement in the literature can be attributed to did
ferences in the generation of the technologies observed. In terms
of the second, it ~ obvious that even in this one industry, the
new labor processes will vary widely by product line. It is also
important to point out that the insurance industry is very differ-
ent from office-type settings in which word processing is the core
application since systems development in the insurance industry
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28
THE INSURANCE INDUSTRY
has been driven by its data-processing needs. In fact, in some re-
gards, more accurate parallels can be drawn between automation
in the insurance industry and automation in manufacturing indus-
tries. In both cases, production work is increasingly performed by
machines while administrative support activity remains relatively
labor-~ntensive (although, in insurance, services activities are also
becoming extremely automated).
Fourth, in assessing the impacts of automation on skill re-
quirements and on the occupational structure of an industry,
would stress the importance of analyzing the changes occurring in
the entire labor process. In failing to do so, analysts often miss
the forest for the trees. When the organization of work is being
fundamentally restructured, it is not so useful to talk about how
specific jobs are changing; instead, we need to begin to assess how
particular job functions or activities are being reconstituted and
recombined to produce new kinds of job categories.
Although this observation may seem banal, most studies of
the effects of office automation have focused almost exclusively
on the clerical work force. As such, they miss one of the most
important features of the current wave of applications, that is,
the automation of professional functions and their transfer to less-
skilled labor. As a result, these studies may be overly pessimistic
both about the decline of clerical-type occupations and their likely
skit levels; at the same time, they may be overly optimistic about
the expansion of higher-level, challenging, well-paid work.
Fifth, we have to be careful not to assume any necessary
identity between skill levels and other job attributes, such as pay,
satisfaction, or occupational mobility. Indeed, many of the new
jobs emerging in the insurance industry may require- fairly high
levels of skill and yet offer few rewards, material or otherwise.
Finally, this last point is true in part because different cat-
egories of workers will not only be differentially affected by the
process of transformation, but the nature of the available labor
force also shapes job design. In this case, the nature of the female
labor market may be an import ant determinant of the emerging
occupational structure.
Some, although not all, of these themes will be explored in
greater depth in the remainder of this paper. To give context to
the discussion of the ways in which new technologies are having an
impact on the labor force, the first section begins by describing the
significant changes that have occurred in the last decade in terms
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BARBARA BARAN
29
of the rate of diffusion and the kinds of computerized systems
implemented in the insurance industry.
THE PACE OF DIFFUSION AND
THE NEW~IMPLEMENTATIONS
Insurance companies, along with financial institutions and
the government, were among the earliest users of electronic data-
processing (EDP) computers. As early as 1959, the finance, in-
surance, and real estate sector boasted the greatest number of
computer installations per million employees (Phister, 19793; by
1970, the insurance industry employed a higher ratio of computer
specialists than any except the high-technology manufacturing in-
dustries (Bureau of Labor Statistics, 19Blb).
Size of the organization was initially the primary factor influ-
encing the implementation decision; companies attempted little, if
any, formal cost-benefit justification. Applications were generally
limited to structured accounting tasks, billing, and claims dis-
bursements. With the exception of the move to direct billing- a
transaction which had traditionally been handled at the agency
level, the automation of these functions had little impact on the
rest of the organization.
For the first two decades, the pace of diffusion was extremely
civilized and the industry proceeded much as it had for the last
hundred years. The barriers to rapid adoption of more sophisti-
cated office systems were both technological and organizational.t
Beginning in the early 1970s, however, systems development took
two unport ant new turns. First, the focus of automation shifted
~ The technological barriers included (a) equipment incompatibility, both
among the various vendors and even within the product offerings of a partic-
ular vendor, that prevented network extension and integrated system devel-
opment; (b) substantial work station connection costs and communications
costs; and (c) the difficulty of representing more complex white-collar activi-
ties in computer algorithms. The attempt to impose a standardized logic on
many procedures often generated too many exceptions to be cost-eEective
and in some cases even diminished the efficiency of the organization. The
organizational problems associated with the introduction of the new systems
were perhaps even more substantial than these technical problems: these
integrated systems required a fundamental reorganization of production, ser-
vice, and distribution, since their effect was not limited to clerical labor in
word-processing and data-processing departments; higher-level workers had
their jobs redefined and in some cases even eliminated. Their resistance
erected a powerful barrier to diffusion.
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30
THE INSURANCE INDUSTRY
from administrative functions such as accounting to automation of
the production process itself, meaning primarily the underwriting,
rating, and physical production of the insurance policy and the
handling of claims disbursements. Second, in the place of single-
task, batch-oriented machines, multitask, multimachine systems
began to be introduced, often operating on-line.
The process of systems integration was an evolutionary one.
As the price/performance ratio of the hardware continued to im-
prove and the software became more sophisticated, more and more
functions in the operational areas were automated and systems
became increasingly decentralized. Independent systems began
to proliferate, often geared exclusively to a company's in-house
data-/word-processing activities. Gradually, however, a counter-
tendency developed as companies moved to link these systems
together into what at first were fairly rudimentary networks. Ini-
tially, in some of the local settings, applications were developed
that went beyond the automation of a discrete task toward the
performance of a wider set of connected operations. Automated
linkages were then slowly constructed among systems, so that
information could be electronically transferred and shared.
On this basis, entry and processing functions were increas-
ingly decentralized and distributed throughout the organization,
but data bases were integrated and centralized. In the mid to
late 1970s, what are often referred to as Voice automation" (OA)
applications also began to be linked to these DP-based systems. A
multitude of new office machines were introduced. Optical char-
acter recognition devices were applied to premium billing and
collection operations; computer output microfilm (COM) which
permits the transfer of data directly from computer to microfiche-
was used extensively by all insurers, and in conjunction with
computer-assisted retrieval technology, increasingly replaced pa-
per files; finally, more and more companies began to experiment
with electronic mail, teleconferencing, electronic fund transfer, in-
teractive data access via television, and other "office of the future"
technologies.
To an important extent, the introduction of these more so-
phisticated systems in the 1970s was driven by a new competitive
environment. Unprecedented levels of inflation and correspond-
ingly high interest rates and important demographic and socio-
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BARBARA BARAN
31
economic changes2 combined to shake up this once stodgy industry
by increasing uncertainty in financial markets and, consequently,
dramatically increasing competition in the financial services sec-
tor. Deregulation fueled these competitive flames. Giants in the
industry found themselves struggling for survival; and companies
with a long, proud history of paternalism were suddenly forced
to lay oh up to 1,500 employees virtually overnight. In many
ways, In fact, the insurance industry was hit by a crisis not un-
like the one faced by U.S. auto manufacturers; and in both cases,
one important response on the part- of companies wan to turn to
automation—both to increase the efficiency of their operations
and to enhance their product offerings.
Whereas the early applications were basically limited to the
automation of discrete tasks (e.g., typing, calculating), the new
implementations called for rationalization of an entire procedure
(e.g., new business issuance, claims processing), and ultimately
the restructuring and integration of all the procedures involved in
a particular division, product line, or group of product lines. As
such, in the categories of Bright's (1958) original analysis, there
has been a dramatic leap in the span, level, and penetration of
the automated systems and, therefore, in the impacts on the labor
force. The changes that have occurred in the underwriting and
claims support systems best illustrate this evolution, although
will also touch briefly on three others: administrative/clerical,
decision support, and agency systems.
2 On the demand side, inflationary pressures initiated the demand for
alternatives to ordinary insurance that would provide adequate protection at
lower cost or higher rates of return on savings. Demographic shifts fueled
these trends. Dual income households and the more affluent dual career
households—grew rapidly and consumer assets were increasingly concentrated
here. The needs and tastes of this population differed significantly from the
traditional insurance consumer with more emphasis on investment over
mere savings, less concern with thrift and more with spending, and a
demand for a fuller range of sophisticated financial services. On the supply
side, competitors outside the insurance industry responded to the new market
conditions by offering reasonable substitutes for many traditional insurance
products and services. In addition, commercial banks began to lobby for the
lifting of regulatory restrictions which bars them from the sale of insurance.
Finally, insurance companies themselves moved to diversify their product
offerings and successfully lobbied authorities to deregulate rates.
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32
THE INSURANCE INDUSTRY
UNDERWRITING AND CLAIMS S UPPORT SYSTEMS
The underwriting function i'
s a critical component of the in-
surance policy production process; it entails an analysis of the
risk involved and acceptance or rejection of that risk. As such,
the heart of this operation has always been performed by profes-
sional labor: insurance underwriters. However, today, in numbers
of product lines, clerks—aided by decision parameters embedded
in computer software are responsible for the risks their compa-
nies accept; and in the most standardized lines, computers are
even performing this risk calculation task themselves. The un-
derwriting systems now being used to produce property/casualty
personal lines products (such as auto and homeowners' insurance)
are a good example of these new applications.
Traditionally, the production process for personal lines prod-
ucts involved roughly the following: an agent gathered the client's
policy information and forwarded this to an underwriting depart-
ment, located either in the home or branch office; the underwriters
established a file on the client, evaluated the risk, and determined
the risk parameters, then sent the policy to the rating section. A
rater (a skilled clerical employee) calculated the premium charges
based on guidelines contained in numerous manuals; sometimes
that information had to be communicated back to the agent so
that the client could make a decision whether or not to use this
particular company. In most cases, the policy went back to the
underwriter who reviewed it and then sent it to a typing pool
where policy typists prepared the various forms and documents.
Finally, the policy was mailed back to the agent who forwarded it
to the customer.
In most large property/casualty carriers the first applications
of computerized equipment to the underwriting process were im-
plemented in the early 1970s and were aimed at speeding the
underwriter's access to client files, shortening the time involved
in rate malting, and of course Reproving the efficiency of policy
production. A typical system of this vintage might simply have
involved a stand-alone computerized rating system with most of
the rating guidelines from the manuals built into the machine-
and an automated policy issuance system, which performed the
typing and assembly function.
In many personal lines departments today, this kind of config-
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BARBARA BARAN
33
Oration remains the current state of the art. Beginning in the late
1970s, however, some of the largest carriers moved to institute
what they variously call "underwriting by exception," "pigeon-
hole underwriting," or ~computer-assisted underwriting." The
aim is very simply to have the computer itself perform the risk
assessment function on as large a fraction of policies as possible,
on the basis of underwriting decision rules which are built into the
machine.
In general, the production process associated with these kinds
of systems looks something like the following: the agent sends the
policy information to a personal lines department where a cleri-
cal worker screens it and enters all routine risks directly into the
machines; these policies are then often relayed in batch form to
the carrier's national (or regional) computer center; the computer
evaluates the risk, rates the policy, and produces it. Policies which
fail to fit within the pre-established guidelines are kicked out by
the machine and returned to an underwriter, who often now calls
up the information on a terminal and works with it on the screen.
Although these systems are extremely new, a few companies al-
ready report that 50 percent to 90 percent of their personal lines
policies are completely underwritten by the computer.
Most personal lines systems fall between the two just described
in their level of sophistication, but, in almost all cases, clerks are
assuming greater, and sometimes almost exclusive, responsibility
for underwriting. For example, in one major property/casualty
carrier, the introduction of computer-assisted underwriting two
years ago shifted the bulk of the underwriting function from the
underwriting department to the operations department, a clerical
operation which had formerly been confined to assembling and
producing the physical policies. Although auto policies still go to
the underwriters for an initial screening process, most property
policies are sent directly to skilled clerks in the operations depart-
ment, who themselves order all necessary inspection reports and
issue the policies.
In some rare instances, the underwriting function has even
been integrated into the activity of a sales worker, entirely elim-
inating it as a separate department. In these cases, a highly
skilled clerical position—customer representative has been de-
signed; this job includes answering inquiries from potential cus-
tomers over the phone; accessing a terminal to produce on-the-spot
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52
THE INSURANCE INDUSTRY
Not surprisingly, then, although women are moving up in
the occupational hierarchy, female wage rates in the industry re-
mam extremely low. In our case study company, for example,
female professionals earn only 16 percent more than male clericals
(whereas male professionals earn 50 percent more); and the ma-
jority of white female managers (57 percent) earn on the average
$4 less per week than white male clericals. Overall in the in-
surance industry, real average hourly earnings for nonsupervisory
personnel fell by 4 percent between 1968 and 1978, in contrast
to a slight rise in real wages during this same period across all
industries. Disaggregat~ng by industry segment, the drop in wages
corresponds directly to the increase in the proportion of female
labor (Bureau of Labor Statistics, 1983~.
Automation and feminization are thus proceeding as twin and
highly interrelated processes and we should expect this trend to
continue. Automation of professional functions is creating pre-
cisely the kinds of jobs women have traditionally held in offices:
the work is fairly routine, semi-skilled, and responsible, but offers
Tow monetary reward and little opportunity for occupational mo-
bility. As Oppenheimer (1968) has argued, employment of men
instead of women in such occupations would mean a rise in the
price of labor, a decline in its quality, or both.
In today's environment, however, insurance companies are
having an increasingly difficult time finding low-cost, high-quality
female labor. As a result, such labor may be becoming a significant
locational determinant. Nelson's (1982) study of the locational
determinants of automated office activities (including insurance)
concluded that, holding land costs constant, companies have cho-
sen to site such operations in areas with a disproportionately high
percentage of suburban married women. Compared with women
in the central cities, suburban wives are often less career-oriented
and may therefore be more willing to accept jobs with lirn~ted
occupational mobility; because they are much more likely to be
supplementing rather than solely providing the household income,
they may be more content with modest pay scales.~°
t° An executive of the Fantus Co., a subsidiary of Dun and Bradstreet,
which specializes in corporate location, made an argument similar to Nelson's
regarding insurance company relocations in particular (Best'& Rechew, 1979~;
see also Kroll (1984~.
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BARBARA BARAN
53
Ross's (1985) study of insurance company relocations and our
own case work and survey tended to corroborate this hypothesis.
Of the 75 percent of our sample who indicated that major spatial
changes had occurred in their company within the last 5 years,
71 percent had moved a greater percentage of their operations
to suburban locations. OverwheIrningly, they cited labor quality,
labor costs, or both as the primary locational criteria.
EFFECTS OF AUToMAT~oN ON MINoRITY WORKERS
Although the relocations and, more generally, the changes
occurring in the labor process may favor some categories of female
labor, they threaten to have a negative effect on other categories.
The situation of minority workers is particularly problematical.
In general over the last 15 years, paralleling the progress of
women, the position of minority labor in the insurance indus-
try has improved significantly. Whereas in 1970, the percentage
of blacks in insurance was seriously below the economy-wide av-
erage in all occupational categories, by 1980 the EEOC reports
indicated higher than average minority employment in many oc-
cupational categories including higher percentages of black em-
ployment. Disaggregating these gains by industry segment, it is
clear that minority workers also fared best In highly automated
sectors.
Given the occupational structure of the industry, the majority
of these minority employees are women. Approximately one-fifth
of the female work force is composed of minorities as opposed to
one-tenth of the mate work force. Overwhelmingly these women
are concentrated in clerical positions (74 percent). Minority men
also hold a disproportionate share of clerical jobs; 32 percent of all
minority men in the industry are clericals compared to 7 percent
of all white men.
ii In the medical/health segment, in 1980, minority workers held 24 percent
of all jobs; although their greatest share of employment was in clerical work
(almost 30 percent), minority workers held unusually high percentages of
jobs in all occupational categories. Minority employment was lowest in
property/casualty firms (14.1 percent) and insurance agencies (12.4 percent),
although even here in both cases minority workers held a disproportionate
share of clerical jobs (U.S. Equal Employment Opportunity Commission,
1980).
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54
THE INSURANCE INDUSTRY
The explanation for the influx of minority workers is identical
in most respects to the argument ~ made with regard to women:
affirmative action gains and the automation of the labor process.
At the same time, there was an unportant difference in the dynamic
of entry that may be extremely important in the longer run.
Long excluded from office-type employment, at least in the
private sector, minority women especially black women—began
entering the clerical work force in significant numbers for the first
tune in the late 1960s. To some extent these women sought—
and were granted new job opportunities as a result of the Civil
Rights movement and its demands for greater equality in the job
market; to some extent, they were pushed to enter the clerical
labor force as opportunities for employment as domestic service
workers declined. Nevertheless, they entered the office after the
division of labor in administrative support activity had become
excessively detailed—and they entered at the bottom, in what are
often referred to as ~back-office" jobs.
This is still where minority clericals are overwhelmingly con-
centrated in the data-processing centers, typing pools, and filing
departments. As of 1980, almost 90 percent of all secretaries
and 84 percent of all receptionists were white, whereas minority
workers represented 25 percent of ah typists; 27 percent of all file
clerks, office machine operators (other than computer operators),
and messengers; and 28 percent of ad mad! clerks.
Undoubtedly, then, the high proportion of minority clericals
in the insurance industry is a direct indication that much of its
office activity is production-oriented, rather than more traditional
administrative support. In addition, the kinds of industrialized
work settings created by the first waves of mechanization in the
industry favored minority employment.
Today the concern is that these jobs are disappearing, through
mechanization, relocation, and perhaps also the new labor process
configurations. First, as Table 4 suggests, of the eleven clerical
occupations with the greatest minority representation, all but two
are declining; in contrast, virtually all of the growing occupations
are dominated by whites. Second, the movement of automated
insurance activities out of the central cities to suburbs and white
t2 These data are for the economy as a whole (U.S. Equal Employment
Opportunity Commission, 1980~.
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BARBARA BARAN
TABLE 4 Occupations in the Insurance Industry, by Race
55
Occupation
Percent White
Percent Black
All occupations 82.0 10.0
Professional/technical/sales
Underwriter 88.95 6.27
Computer systems analyst 89.05 4.64
Operations and systems research 88.73 6.02
Actuary 94.16 1.79
Statistician 84.86 7.88
Computer programmer 86.75 . 5.58
Insurance sales occupations 90.81 5.16
Clerical: above average blacka
G eneral office supervisor 83.12 10.17
Computer operator 80.13 11.64
Peripheral equipment operatorb 79.44 12.67
Typistb'C 75.30 15.78
Correspondence clerks 81.08 13.43
Order clerk 81.08 11.69
File clerkb'C 73.13 17.52
Billing, posting,
calculating machine operatorb 77.67 12.50
Duplicating machine operatorb'C 73.25 17.48
Office machine operator,
not elsewhere classifiedb'C 73.17
Telephone operatorb 79.05
Mail clerkb 72.28
Messengerb'C 73.03
Clerical: below average blacka
17.12
14.38
18.72
17.59
Computer equipment supervisor 86.78 7.30
Financial record-processing
supervisor 90.16 4.67
Secretary 89.00 5.73
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56
TABLE 4 (continued)
THE INSURANCE INDUSTRY
Occupation
Percent White Percent Black
Stenographe b,c 84.74 9.10
Receptionistb 84.24 8.15
Bookkeeper/accountant/audit clerk 90.01 4.33
Payroll/timekeeping clerk 85.53 8.15
Billing clerk 85.34 7.95
Cost and rate clerks
(including raters)C 85.29 7.88
NOTE: Employment share percentages are for the entire economy, not the
insurance industry, for 1980.
aClerical occupations are grouped according to whether the proportion of
blacks is higher or lower than the proportion of blacks for "All occupations"
610.0 percent).
—Absolute decline 1970-1978 in insurance industry employment (Occupational
Employment Matrix, Bureau of Labor Statistics, 1981b).
CAbsolute decline 1978-1981 in insurance industry employment (Occupational
Employment Surrey, Bureau of Labor Statistics, 1978, 1981a).
SOURCE: U.S. Equal Employment Opportunity Commission (1980~.
towns also threatens minority employment. Again using the ex-
ample of our case study company in the absence of reliable ag-
gregate data, the three new, highly automated "personal-lines"
centers described earlier were located in towns where minorities
represented 3.1 percent, 3.3 percent, and 14.3 percent of the popu-
lation (whereas their representation in the population as a whole is
closer to 20 percent). This company's centralized data-processing
center (soon to be closed) and home office also relocated from a
central city with a minority population of over 40 percent to sub-
urban locations which are 90 percent white. Third, and somewhat
more speculatively, the move to team-type work configurations,
which involve close working relations among high-level and lower-
leve! employees, may well favor the hiring of "socially compatible"
white women (Nelson, 1982; Storper, 1981~. The historically low
level of rn~nority representation in secretarial and receptionist jobs
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BARBARA BARAN
57
lends circurr~stantial evidence to this hypothesis. As the bulk-
processing centers are closed and key entry functions are moved
to decentralized settings, minority clericals are in real danger of
being displaced. And the centers are closing. A vice president in
one company we interviewed predicted that within 2 years their
six processing centers located across the country, which now em-
ploy approximately 1,500 to 1,800 women, will have been closed.
Although word processing is still somewhat centralized in many
companies, over 70 percent of our sample in the survey responded
that the trend in their company is toward decentralization of this
function.
Finally, and perhaps most important, are the prior disadvan-
tages minorities face in the educational arena. If it is true, as
believe, that the lesser-skilled jobs in the industry will continue
to disappear, workers without adequate mathematics and literacy
skills will be disadvantaged. To the extent that these occupa-
tions increasingly involve interpersonal communication, workers
for whom English is their second language may also be passed
over.
CONCLUSION
To conclude, it seems appropriate to return briefly to the
primary concerns raised in the office automation literature and to
summarize the perspectives presented here on the most contentious
questions: Will automation deskill white-collar work? Will office
automation result in widespread technological redundancy? Will
women workers bear the burden of the restructuring process?
In terms of the deskilling debate, ~ have argued that three
kinds of processes seem to be raising skill requirements in the in-
surance industry. First, the rapid automation and elimination of
much low-skilled work as computers assume responsibility for the
most-structured functions is making the occupational structure
increasingly top heavy. Conservatively, we can expect that during
this coming decade roughly two-thirds of all new jobs in the indus-
try will be nonclerical; over the next decade, net job gain should all
occurinnonclerica~jobcategories(Baran,1985:234-238~. Second,
the transfer of higher functions to less-skilled labor—as decision
parameters are embedded within computer software—is creating
new categories of skilled clerks, biasing the clerical hierarchy up-
ward as well. For just this reason, in fact, there is some evidence
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58
THE INSURANCE INDUSTRY
that clerical skills are higher in mas~produced product lines where
clerks are able to assume greater responsibility for the entire pro-
duction process than in specialty lines where they remain adjuncts
to professional labor. Finally, especially within the context of inte-
grated data bases, computer-mediated work seems to demand new
skills of the clerical work force. In all these ways, therefore, what
we are witnessing ~ a rolling process of deskilling and reskilling
which, in aggregate, should increase the industry's demand for
skilled labor. At the same time, however, as ~ suggested at length
earlier, opportunities for occupational mobility may decline, the
quality of work life may deteriorate, and salary scales may remain
low.
Turning to the question of job redundancy, an important corol-
lary to this argument about skills, ~ have argued that clerical
job loss may indeed reach serious proportions over the next two
decades.
In the last 10 years women have moved rapidly into profes-
sional, technical, and managerial occupations. However, since ap-
proximately 70 percent of the almost ~ million female employees in
the insurance industry are clericals, the predicted drop in clerical
jobs would have important implications for employment opportu-
nities for women. Assuming that women gain even 50 percent of
ad new nonclerical jobs and continue to constitute 94 percent of
all clerical employment gained or lost, under conditions of moder-
ate declines in clerical employment women will gain slightly less
than half of all new jobs created in the industry over the next two
decades; in contrast, between 1970 and 1980, women gained closer
to 88 percent of all new jobs. If the decline in clerical employment
is more substantial as two of the studies cited predict (Leontief
and Duchin, 1986; Roessner et al., 1985) female employment in
the industry would actually fall by 10 percent or more, unless, of
course, women claim a much larger share of nonclerical employ-
ment (Baran, 1985:238-239~.
While women are moving up the occupational hierarchy in
significant numbers, at the same time women at the bottom may
be losing their jobs. In this sense, the effects of automation on
the female work force will vary importantly by class and race. For
minority clericals and less-educated white women, especially in
the central cities, the threat of redundancy is serious. For skilled
clerks, particularly in suburbs and small towns, there will prob-
ably be jobs but not opportunities, unless new kinds of training
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BARBARA BARAN
59
programs are developed. For college-educated women, there may
be new opportunities but there is also the danger, discussed ear-
lier, that numbers of professional, technical, and lower managerial
positions may resegregate females and be implicitly or explicitly
reclassified downward as a result.
The truth is that in a real sense the future is both uncer-
tain and open-ended. Ultimately the question of whether the new
technologies are used to create more good jobs than bad ones will
depend on decisions made by the leadership of the firm; these
decisions will be nonetheless shaped in significant ways by public
policy. There is, for example, historical evidence that skill avail-
abilities and shortages impact directly on job design (Levitan et
al., 1981~. Public programs that absorb the costs of training-
including both general education and the kind of ongoing retrain-
ing that a period of rapid technological change requires—make
"working smarter" strategies both more attractive to companies
and, in fact, possible.
Policy wiD also play an important role in determining which
workers bear the burden of the transition. Without a greater pub-
lic emphasis on education and training, for example, it is likely
that many of the workers presently employed in great numbers in
the insurance industry will not only be expelled, but may also find
themselves unable to secure comparable work. Similarly, aggres-
sive affirmative action policies Knight act as a countertendency to
the gender bias of job loss.
One of the greatest dangers of studies such as this, which at-
tempt to analyze the impacts of technological change on the work
force, is their underlying assumption of technological determinism.
In fact, the findings of these studies are ambiguous and indeter-
minate not only because the processes we are analyzing are in a
state of flux but, more important, because collectively we have
considerable control over the eventual outcome of these processes.
Nevertheless, with these caveats firmly in mind, ~ think that it is
safe to predict that we need to begin to prepare our work force—
particularly our female work force—for a labor market in which
there will be many fewer routine clerical jobs.
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60
THE INSURANCE INDUSTRY
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Representative terms from entire chapter:
barbara baran
