Computer Chips and Paper Clips Technology and Women's Employment, Volume II: Case Studies and Policy Perspectives (1987) / Chapter Skim
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II. Case Studies of Women Workers and Information Technology
II. Case Studies of Women Workers and Information Technology
The Technological Transformation of White-Collar Work: A Case Study of the Insurance Industry
Pages 23-62
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Part II Case Studies of amen Workers and In~rm~n bchno~gy
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senior managers and systems analysts. The limited numbers of case studies that have been published on the impacts of office automation report conflicting findings.
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Other studies indicate, on the contrary, the elimination of skilled clerical activities, resulting in a polarization of the occupational structure (Feldberg and Glenn, 1977; Hoos, 1961; U.S. Bureau of Labor Statistics, 1965~.
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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 different from office-type settings in which word processing is the core application since systems development in the insurance industry
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. Fourth, in assessing the impacts of automation on skill requirements and on the occupational structure of an industry, would stress the importance of analyzing the changes occurring in the entire labor process.
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computers. As early as 1959, the finance, insurance, 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 industries (Bureau of Labor Statistics, 19Blb)
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Optical character recognition devices were applied to premium billing and collection operations; computer output microfilm (COM) which permits the transfer of data directly from computer to microfichewas used extensively by all insurers, and in conjunction with computer-assisted retrieval technology, increasingly replaced paper files; finally, more and more companies began to experiment with electronic mail, teleconferencing, electronic fund transfer, interactive data access via television, and other "office of the future" technologies.
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, 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.
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However, today, in numbers of product lines, clerks—aided by decision parameters embedded in computer software are responsible for the risks their companies accept; and in the most standardized lines, computers are even performing this risk calculation task themselves. The underwriting systems now being used to produce property/casualty personal lines products (such as auto and homeowners' insurance)
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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 clerical 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.
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ADMINISTRATIVE/CLERICAL, DEcIsIoN SUPPORT, AND AGENCY SYSTEMS In contrast to the underwriting and claims support systems, neither office automation applications nor decision support systems have, as yet, made a significant change in the organization of work, although in the case of the former, companies have reported fourfold productivity increases when word-processing equipment is substituted for traditional typewriters and 70 to 85 percent rises in output per operator when CRTs replace MagIT equipment (Life Office Management Association, 1979~. By the late 1970s, word processors were widely diffused throughout the industry.
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The benefits of these integrated systems include improved speed and quality of quotations, policy production, billing and customer service; greater sophistication in marketing techniques; error reductions; and less duplication of clerical effort. EFFECTS OF AUTOMATION ON THE SIZE AND COMPOSITION OF THE WORK FORCE Taken together, the effects of these new systems on the insurance work force has already been dramatic and because integrated implementations did not begin in earnest until fairly recently, we can expect even more significant changes in the future.
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With respect to future job Toss, three fairly comprehensive employment forecasts for the insurance industry have been recently published (Drennan, 1983; Leontief and Duchin, 1986; Roessner et al., 1985~; all three predict dramatic declines in industry employment particularly clerical employment—between 4 Relatively crude measures of real productivity figures are presented here, because of the difficulty in calculating inputs from real estate, stock brokerage houses, and so on (estimated roughly at 6 percent of total industry employment)
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If, by the end of the century, the clerical labor coefficient were to fall to 70 percent of its present level the smallest decline predicted by these forecasters—over 400,000 fewer clerical jobs would be created; and between 1990 and 2000, approximately 100,000 clerks would actually lose their jobs through layoffs or attrition (Baran, 1985:225-234~. Clerical job loss may wed be even more serious.
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Virtually all clerical categories experienced relative decline, but routine clerical occupations- such as keyboarding, filing, traditional office machine operators, and so on were particularly makes comparison with earlier years difficult and, in some cases, useless. The second important source, the Bureau of Labor Statistics' Occupational Employment Matrix, provides data reported for 1970, 1978, and 1980 which are estimates based on other surveys.
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Although there are no current data available to reflect the recent implementations of integrated on-line systems, it is clear that, especially in the carriers, clerical jobs are continuing to disappear (see Table 2~. Between 1978 and 1981, of the clerical occupational titles reported in the BI`S Occupational Employment Survey of Insurance, approximately two-thirds grew more slowly than overall employment and close to one-half experienced absolute job loss.
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. However, clerical categories such as "claims examiner, life, accident and health," "insurance clerk," and epoxy change clerk" continued to experience steady growth, probably reflecting the growing responsibility of clerks for the claims and underwriting processes.
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Three conclusions can be drawn from these data: First, at least in relative terms, insurance is employing fewer people; and in increasing numbers of occupational categories, the relative decline in employment share has escalated into absolute job loss. Second, the weight of the occupational structure has shifted upward, tilting toward the higher-skilled categories of labor—managerial, professional, and sales.
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, has been dominated by the fear that industrialized labor processes would accompany the rising capital intensity of whitecolIar production, ironically it was the pre-automated rather than the newer highly automated labor processes in the insurance industry that most closely resembled an industrial assembly-line. Traditionally, in huge open offices, white-colIar insurance workers sat grouped by function underwriters, raters, typists, file clerks, and so on; the paper flowed manually from one station to another as each worker completed his or her portion of the production task.
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Many of the early applications of word processing had a similar character in that key entry was often separated from other clerical activities and centralized in a word-processing center. Beginning in the late 1970s, however, as companies began to introduce integrated systems, they also embarked on a serious redesign of the labor process, which promises to reverse many of these earlier trends.
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The first of these is found in purest form in the highly automated personal-lines underwriting departments of many large property/casualty carriers. Here both rating and risk assessment have been largel~r assumed by the computer; as a result, functions formerly divided among entry clerks, raters, underwriting assistants—as well as additional low-level underwriting tasks— have been consolidated and turned over to a highly skilled clerical worker.
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On the basis of highly integrated computer systems, clerks have taken over most of the work of professional claims examiners; the small number of remaining examiners handle only the problem cases. The emergence of this kind of work organization, where routine clerical work is eliminated, professional jobs are reduced in number while being enlarged in depth and scope of responsibility, and skilled clerks become the bulk of the work force, seems to depend on several factors.
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Although each of these job configurations has different ramifications for the employed work force, there are certain important similarities among all three that distinguish them from the earlier labor processes, beginning with their impacts on skill requirements. First, even in the case of routine entry operators, clericals have an increasingly important responsibility for the quality of the data.
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Evaluating the new skilled clerical categories is even more difficult. On the one hand, there is no doubt that they are an improvement over most clerical jobs along a series of dimensions: task variety has widened rather than narrowed, the span of decision making is broader, the responsibility for production is greater, and general training and educational requirements have risen.
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Although their work is likely to become more challenging, many jobs may be eliminated.7 WOMEN AND MINORITY WORKERS Because of the prevalence of occupational stratification by gender and race, this reshaping of work and of the occupational structure has particularly affected female and minority workers. 6 The survey presented a picture of two prototypical skilled, computerlinked clerical occupations: customer service representative and claims examiner in which white claims examiners were more likely than any of the other clerical categories reported to find their work always ainteresting and challenging" (50 percent of claims examiners as compared to 30 percent of white legal secretaries, the second-ranked occupation)
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In total during this period, female employment rose by 49 percent compared to a meager 8 percent rise in male employment. Since during this same decade clerical workers declined as a percentage of the work force, the increase in female employment cannot be explained by the disproportionate growth of traditionally female-typed jobs.
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For example, the professional stabs in the new highly automated personal-lines centers of one company are so overwhelmingly female that an administrator of one joked that they are under pressure to develop affirmative action goals for men. She explained that the reason the company chose to hire women was that they are more flexible than men in adjusting to the computer-mediated labor process.
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In line with this hypothesis also, the percentage of female professional and technical workers in the industry varies widely by product line. In the more highly automated life and medical/health segments, women's share of employment in these occupational categories is considerably higher.9 The differences in the proportions of female labor are not solely attributable to automation; other characteristics of the job militate for or against the employment of women.
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Overall in the insurance 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~.
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, 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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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!
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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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. —Absolute decline 1970-1978 in insurance industry employment (Occupational Employment Matrix, Bureau of Labor Statistics, 1981b)
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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?
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However, since approximately 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 opportunities 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 moderate 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.
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In fact, the findings of these studies are ambiguous and indeterminate 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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Boston: Harvard Business School. Appelbaum, Eileen 1984 The Impact of Technology on Skill Requirements and Occupational Structure in the Insurance Industry, 1960-1990.
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:146-159. Murphree, Mary 1982 Impact of Office Automation on Secretaries and Word Processing Operators.
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Sirbu, Marvin A 1982 Understanding the Social and Economic Impacts of Office Automation.
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