The argument goes “Factory X replaces 20 workers by buying a machine. Same happened with factory Y, Z and a ton of other factory out there. So logically, machines create unemployment”. Or at least that’s how I’ve been hearing it. I retort by saying “look at me, I wouldn’t have my job if it wasn’t for computers (I’m a computer engineer). So machines also create jobs, maybe enough to balance those taken by the automation you refered.” The counter-argument comes “That’s only for rich kids whose parents can afford to have them go to college. The middle-aged guy that lost his job in factory X is unemployed for good”.
Well, that argument was going nowhere. We finally decided that we’re not really sure how to find out if machines have increased unemployment or not, meaning
which statistics should we look into. Can you help?
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- As long as the machine costs more to use than having a person to do it manually would, then machines create jobs.
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- The reason this is so is because the economy is essentially driven by money changing hands, and if the machine costs more than human labor then more money is changing hands, and so the larger sum must be causing more turnover in the economy than the smaller human-labor sum would.
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-And I have not seen demonstrated any industry where machines are not more expensive–because if machines were cheaper than human labor, you’d have an industry with no human labor, only machines.
- We may note however that there are only two specific reasons for automation of any type: enhanced precision and/or enhanced speed.
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Near as I can figure, over the short-term, machines do create unemployment. However, a whole new industry will develop around the machines. The machine ultimately needs a human being to operate it, people to work in the factory where the machine in made, with all the peripheral jobs (secretaries, PHB’s, etc.) Then there’s the engineers who design peripherals for the machines, find ways to make them function more efficiently.
So, no I don’t think machines create unemployment.
I would spin it more like machines create unemployment in unskilled labor. Many of not most simple mechanical operations can be performed by machines.
Lets say assemply line x Makes 1000 $10 widgets an hour with $100/hour in labor. If a $20,000 fully automated Widget line can produce 2000 $10 widgets/hr with zero labor, but requires $180/hr to maintain it has added to the labor market despite the savings as a percentage in labor and will pay for itself in 6-8 months. Most businesses especially manufacturers tend to reinvest alot of revenues in capital improvements to increase capacity, speed, accuracy, etc. Additional equipment invariably results in additional labor cost either in supply chain, administration, sales, HR, the list goes on.
Drach CPIM student 
Historically, machines have always created more jobs than they have destroyed. Just not in the same industry, or involving the same people. But taken as a society, machines create jobs.
An interesting read on this subject is Jeremy Rifkin’s “The End of Work.” Summarizing from foggy memory, he argues that for reasons partly technical but mainly social, we are only now beginning to really make use of automation’s potential to eliminate the need for human work. He predicts a major labor surplus and argues that we need to decide now to make that play out as more leisure time for everyone rather than mass unemployment. Yeah, that’ll happen.
I think that one of the trite examples often used is that yes, automated buggy-whip assembly machines took jobs away from some buggy-whip craftsmen. …Which demonstrates that jobs do go away in some specialties, but you can’t say that machines are the only cause, or that there’s always a great need to maintain every kind of job forever, just because someone’s making a living at it.
More on this would probably cross the line into GD.
Yeah, except that it was written by Jeremy Rifkin, America’s Premier Luddite. If’n it’s a trend, he’s agin’ it!
Hmm now that you mention it that was the hidden debate between me and my friend… we just got stuck in the “machines always take jobs” part, but that was definitely where I wanted to go next…
Does anybody want a “if a job isn’t needed, kill it!” thread in GD?
Don’t forget that any workers freed up by the machine are then available for new projects or expansions in other industries, as is the captial saved by using machines.
Being from Michigan and currently working in a foreign country, this is near and dear to my heart. Part of our manufacturing-related economic problems in Michigan stem from the fact that a high percentage of our workforce does maintain their jobs forever, just because someone’s making a living at it.