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and technology. AUTOMATION AND SOCIETY Ewan Clague Since the two previous speakers have covered a great deal of the ground in relation to science and technology, I can finish up briefly by discussing the impact of technology upon the socio-economic system that we have. I represent the social and economic reaction to science My first job, when I finished my college work with a Ph.D. at the University of Wisconsin, was to conduct studies in productivity in the Department of Labor in Washington, D. C., in the middle nineteen-twenties. I developed indexes of output per manhour in a variety of industries with the primitive statistics we had at that time. Those indexes have been carried down to date. Indexes of produc- tivity have become one of the crucial statistics in our economy. The first impact that I want to call to your attention is the impact of science and technology upon employment. I can summarize in a few words the well-known facts concerning that. You have heard this story many times. I have to record it for the sake of the argument. Briefly, over the last 20 or 25 years we have experienced a great shift in the types of employment. Agriculture has been losing employment steadily for several decades. In fact, as a young boy on a farm in the State of Washington, I can remember farm employment being at an all- time peak-eleven and one-half million workers. Today we have less than half that number employed in agriculture despite the tremendous gains in output. Coat is another industry in which we have been eliminat- ing workers for the past 15 years. In some manufacturing industries the same thing has happened. In genera], what we find in our picture of the employ- ment situation in the United States is that all the net growth in employment in recent years has been in the service industries, which consist of three major groups. First, wholesale and retail trade, representing the function of distributing goods to consumers. 26
Second, financial institutions, such as banks, insurance companies, credit concerns, etc. plus another service group, such as hotels, restaurants, laundries, cleaning establishments, and businesses of that sort. The third group is government -federal, state, and local. In the Federal Government there have been no significant increases in employment in the past ten years, but state and local employ- ment has increased 75 per cent since 1953 and is still on the way up . Of course, these expansions in employment reflect, first, the growth in the population; and second, the increasing urbaniza- tion of the population. State and local government employment is heavily weighted with the increase in teachers and in other educational employment, as well as in the municipal services that are related to our increasing urbanization. Technology and science also have an effect upon unemploy- ment, and this shift has brought about some problems which will be familiar to many of you. You have seen the statement that we are losing 40,000 jobs a week. This figure may seem puzzling until you multiply it by 50 weeks in the year, and then you will see it mount to about two million. And that two million represents about three per cent of private employment in the United States. In other words, that is simply the rate of increased output per manhour that occurs on the average each year~bout three per cent. This year we produce the same products as last year with 97 workers instead of 100; or conversely, we produce an increased output with the same labor force we had last year. This statistic should be named ttlabor displacement." It is not necessarily unemployment. Jobs disappear every day, but the worker himself may simply be transferred to another jot in the same plant, so that he experiences no unemployment at all. Displacement is not necessarily unemployment, although some un- employment surely grows out of it. Then there is another figure of about 200,000 a year which is displacement of another kind. Leon Greenberg of the Bureau of Labor Statistics staff and I worked out those figures in response to an automation program at Arden House in New York. Our study showed that even though output per manhour in an industry may be increasing, the industry may at the same time be expanding its employment. Of course, in other situations, employ- ment declined under the impact of technological change. We took over two prosperity periods, 1947 to 1957 and 1953 to 1959. Mr. Greenberg has recently applied this analysis to the period from 1957 to 1961. '7
We compared the first and last years of each period and classified the industries (in manufacturing) into those having rising employment and those with declining employment. We further split off those which had a decline in employment because of a loss of business, an actual lessening of output. A decline in output produces unemployment, but such unemployment is not due to displace- ment by automation. Our analysis was designed to measure the extent to which employment had declined in specific industries because of improved output per manhour. In manufacturing, the total number of workers involved amounted to about 200,000 a year over a period of five-six years. Now, essentially, the impact of science and technology on unemployment is the creation of what we call structural un- employment, and I would like to say a few words about that. We, in the Department of Labor, are greatly impressed with the fact that our unemployment is due in part to the fact that workers- who may lose their jobs if and when displaced-are not able to fill the jots that are needed in the future. I can give two or three illustrations to highlight this distinction. You are well aware of the fact that our volume of un- employment-this residual volume of some four or four and one-half million workers-is heavily weighted with Negroes and with uneducated. It is this group of workers who, whenever they get out of work, have trouble getting back into the economic system again. you. From March 1950 by 10.5 million. The There are two developments I would like to highlight for to March 1963 our total work force expanded first fact to bring out is that men achieved a rise of only three and one-half million, so that there were seven million more women, an increase of double the rate of the men. Another fact of importance is that the bulk of the increase among men consisted of married men with wife present in the household. There was actually a decline of half a million in all other men. We can account for that, in part, by the fact we are experiencing a smaller labor force participation among young men who are con- tinuing their education. (This is true of girls also.) Finally, there has been a decline in older men beyond the age of 60 and even beyond the age of 55. Men are moving into retirement earlier, in excess of our original projection. We are losing a substantial work force in the upper end of the age scale. The interesting thing about the women is that five and one-half million of the seven million increase in women consists of wives with husband present. In other words, married women are entering the labor force in large numbers. The one and one-half million other women (single primarily) represent all other types of women workers. The significant point is that the married woman is moving out into industries. 28
In fact, in one sense of the term, this tendency may be partly responsible for the persistence of long-term unemployment among men. These women fit the new jobs in expanding occupations, while many of the unemployed men are not qualified. We have been doing a number of studies in the Bureau of Labor Statistics on the impact of technology upon unemployment. These studies get a little nearer to the nature of the problem. What kind of problem do we have? And then, what could be done about it? I am going to run through these studies briefly. We have made a number of plant studies on the methods being used by businessmen in introducing technological changes. We study the ways in which they brought their plans to the attention of their staffs; the steps they took to keep their workers on the payroll; how many workers were eventually displaced; what new occupations were developed in the process; what older occupations were eliminated. A second type of study is to take a given tool or in- strument and trace its effects. We made a study of the electronic computer in 20 different establishments. What effect did it have in different establishments and in different circumstances? We are making another study on materials handling in a number of industries. A third type of study is to survey a particular industry in relation to its technology. This usually involves some projec- tion of future employment. In such studies we raise the question, how long does it take a technological change to work itself effec- tively into a given industry or into a given sector of the produc- tion process? I remember being impressed by this question when I was making some of these productivity studies in the 1920's. I visited American Rolling Mills at that time, making a study of productivity in open-hearth furnaces. What intrigued me was the continuous strip mill then being put into operation. In about a decade, by the beginning of World War II, that process had spread throughout the industry. It was a factor in our large steel output in World War II. There is a related question, what effect does it have upon employment and unemployment in the firm and in the industry? How long does it take for a lagging firm in the industry, either to be forced out of business or to recapitalize and catch up? I do not know that this kind of a study can be successful, but we are going to try to make it so since this would have two important effects. 29
First, we could project the employment and occupational requirements of the industry for some time ahead; and then, in turn, we might he able to adjust our training, retraining, and educational programs to provide the kinds of workers that will be needed in the future. My time is running out, but let me take a couple of minutes more to speak about the way in which all this is affecting labor- management relations. The whole tenor of labor-management relations in the United States in the coloration of the impact of _ organized labor is on the receiving end of some of the more spectacular developments. last few years has begun to take on the technolo~v. Perhaps this is because At any rate, for better or for worse, this is now an im- portant factor in collective bargaining. I will mention a few cases. An agreement that was reached in West Coast longshoring providing for jot protection in exchange for management freedom to make productivity improvements. The Department of Labor is now engaged in a study of East Coast and Gulf Coast longshoring as a result of the arbitration decision of Senator Morse's committee last year. We are studying the labor utilization on the waterfront, along with the kinds of protective devices for workers who may be laid off in the industry as technology continues to advance. Armour Meat Packing Company and Kaiser Steel are other examples. American Motors, with its profit sharing, represents another type of agreement. Shorter hours have begun to show up in contracts. The canning companies signed with the United Steel Workers Union for three months t vacation with pay for high seniority employees. A similar agreement was reached by the Union and the steel industry. If you have read one of our articles in Monthly Labor Review awhile hack, you will see that we found that hours of work in American industry were shortened slightly more between 1940 and 1960 by increasing paid holidays and vacations more than by the shortening of the hours per week. This pressure undoubtedly will be with us for some time. The labor movement now is looking to more vigourous drives in the direction of 35 hours per week. This will take time to bring about; but the long-run trend for many decades has been toward shorter hours. One more word on that subject. It is quite clear that in the olden days, with hard labor, shortening of the hours frequently was offset by higher productivity. Great Britain found out in World War II that workers on a 72-hour work week or a 60- hour week were not as efficient in the long run as they were on shorter hours. 30
However, when you get down to the kinds of jobs that are now developing as a result of automation, the possibility of higher productivity is more limited. Coal mining is an industry in which shortening the hours did increase over-all productivity; but for a gauge watcher in a public utility plant the chances are that a shortening of the hours would have the result of increasing the costs. One last closing paragraph on the engineer's responsi- bility. As far as engineers are concerned, and this applies to scientists of all kinds, it is quite clear that the solution is not to put a damper on the rate of technological change. It could not be done anyhow; but even if it could, it would not be wise. I remember when I was teaching economics we used to quote Veblen, who was one of the famous economists of that day. "Necessity is not the mother of invention," he said, "Invention is the mother of necessity." He meant that when you invent something you never know what will happen to it; and an invention, as it works its way through the economic system' produces its own complications. You cannot do much about it, except adapt to it. On the other hand, I urge upon you the fact that engi- neers should be well versed in these socio-economic problems which I have been discussing. One is the management-labor problem, collective bargaining. Engineers are going to be drawn more and more into it. Certainly, as long as we have large unions, em- ployers are going to be negotiating on the kinds of fringe benefits which can be exchanged for improved methods of production. In respect to unemployment, I mentioned this structural unemployment we must take into account. We feel very strongly in the Department of Labor that we will have a continual problem of training and retraining people up through their advancing years. If we go back a couple of hundred years ago, the average length of time necessary for a complete turnover of the work force was ap- proximately a quarter of a century. The average young boy entered the work force at age 15 and worked for 25 years. By age 40 he was dead. At the present time he enters at about age 18, and con- tinues until 65 or 70, which is half a century; so the turnover takes twice as long. Furthermore, he is likely to go through three or four changes of occupation in that working life career. In any case the work force is showing a slower turnover. On the other hand, technology is speeding up. Therefore, we have an adaptation problem-slowly changing work force to rapidly changing jots. This brings me to education, which was mentioned by some of the previous speakers. It is quite clear that one of our 31
problems must be to gear our population, our labor force, as much as we can, to an acceptance of technology as a fact of economic life. We are going to be faced with the likelihood that retirement will have to take place earlier. We will give up slowly, but probably inevitably, on older workers. We will have to devote more of our attention to the highest possible education and training and adaptation of the men and women in their productive years. We are on the verge of a great flood of youth into the labor market. We will need to be deeply concerned with how best to work these millions of youngsters into the labor force. As engineers you need to help us social scientists to study this situation and to bring about as happy a combination as we can get between people and jobs. 32
