Maintaining the Employment Rate : How Modern Workers Can Living Coexist With Technology
Technology has developed rapidly in recent years, people often call it the disruption era where things changed massively in the business landscape. the market has changed and it changes how businesses do things. The application of technology in various business aspects is really benefiting the business because the business can increase productivity and efficiency by replacing human workers with systems and robots which have several advantages compared to humans in doing some tasks. with doing that business can compete in the market and generate more revenue.
This practice does not come with no cost, the development of technology is really put human workers at stake. the usage of technology may benefit business but it caused new social issues. Many workers were laid off because their job was being replaced by the system, because technology development is really astonishing. Many findings show technology are capable to do tasks that take years for humans to master. and this caused a worry among all workers that will their position soon be replaced by system, this social anxiety caused an uncertainty for the workers life on how they will survive in job market knowing they have found the substitution that never have faced before.
This situation caused a dilemma because the development of technology should make human life easier rather than causing social anxiety. if this issue is not adressed by all parties involved as soon as possible. We may face a huge social problem in the future.
This situation also raises a question that whether we should adopt technology in all business sectors considering the benefit it gives to the industry or should we limit the use of technology to avoid social anxiety among all laborers. because life is more than just generating profit. Records shown throughout history capitalism has put the environment at an expense to generate more profit. After what they did, should we also put the human condition at stake for the sake of profit?
Technology to improve Human condition
Based on previous statements we may see the development of technology tends to harming the existence of human workers, but actually its existence is good because it can replace humans in doing harsh and repetitive jobs without significant error. This allows humans to take roles in fields that require full human capability rather than their physical ability. because humans are created for the deepest purpose other than that.
As Keynes mentioned in his famous essay “economic possibilities for our grandchildren” he argued that technological progress will benefit everyone because it can replace human in doing various tasks and it leads to bringing more wealth to people so people no longer need to work long hours to survive. This would free up people’s time to pursue other activities and do things they are love to do such intellectual and artistic career.
If we look back to the past before rapid development of technology, not so many options are available for people to choose on what to do for living. only few people can pursue their intellectual or artistic career. The life standard is so low and most people are doing harsh work and little pay. After the development of technology, slowly machines started to take the role of people in harsh job. Industrialization is changing people on how to produce things, it is improving the production capacity and replacing people in the production role. and it allow people to do things they like to do.
Industrial Revolution, technology development and The Birth of New Jobs
Throughout history, the development of technology may replace human roles in several harsh jobs and allow humans to do things they like to do, but it also causes worry among workers that their occupations are in threat of their labor being replaced by technology. but the records show that the development of technology also comes with the rising of various new jobs. if we take an example from the first industrial revolution. the existence of manufacturing machines may take the role of people in production workshops but it is also giving birth to new jobs such as machine designer, engineer, machine maintenance, lubricant producer, parts producer. Many business opportunities and job opportunities appear due to this condition. and only few jobs are taken and many new jobs are created.
The new jobs that new technology bring often requires more skills compared to the old jobs2. means one should improve their ability in a specified area to excel in that new job. Design engineer may not have been a common job before the first industrial revolution but become a common job afterwards. To be a design engineer is no easy job because it requires an extensive amount of training to excel in this role.
If we see this situation in context of law of demand and supply, when a certain commodity is scarce at the same time the demand is high, the price of the commodity tends to rise. When new technology comes, the demand for people who are capable of doing these new jobs rises. If the number of people who can perform that job is still low, the labor price rises. Thus we can say technological development gives birth to high paid jobs. The more technology being applied the more high paid job positions available in labor market. In order to get more salary, many workers are willing to improve their competence to meet the required criteria for the new job.
Since many high paid job appear and many people are getting a more proper salary, the living standard starts to rise.when the workers improve their competence and move into the new position, it gives new space for low skill workers to enter the labor market to fill the position that is being left by the old workers. Thus we can say the development of technology resulted in the highest absorption of workers, reducing the unemployment rate and raising the society’s living standards.
Industrial Revolution and its role in reducing global poverty
The birth of new jobs is really affecting the economy around the world. if we look at the chart below about world population living in extreme poverty since the birth of industrial revolution (1820) until 2015, it shows that before industrial revolution in 1820, 89.15% of the world population living in extreme poverty, meanwhile fast forward to 2015 only 9.98% of world population living in poverty. it shows that the Industrial revolution and development of technology that comes afterwards is benefiting everyone around the world.
If we try to explain further how the number of people living in extreme poverty decreased using the theory from the previous passage it can be explained that the development of technology in advanced country (such american and european country) giving ability of business in these areas to utilize the technology and able to improve their value chain. Since modern countries are able to produce complex things such as machines, these countries can improve their value chain and move into high-tech industry and only producing complex things and abandoning labor-intensive industry activity such as the garment industry.
Since advanced countries are no longer doing labor intensive industry, developing countries such as Bangladesh are doing these activities such as the garment industry. The existence of the garment industry in Bangladesh really helped the workers in the rural area. It gave them options to do beside working in farms and ricefield. The garment industry often offer better salary compared to their old jobs in farmfield.
When the farmers are moving to textile industry and the farmfield being left by their workers, Now the unemployed people in Bangladesh can work on farms. this caused the employment rate in Bangladesh to rise. These phenomena not only happen in Bangladesh, but also happen in several developing countries such as Vietnam, Nigeria, Senegal, and also Indonesia. Since this situation happens massively around the world, no wonder we all can reduce the number of people living in extreme poverty time after time.
Technological Unemployment
All the benefits that arise from the development of technology doesn’t mean the technology itself doesn’t come with a side effect. Keynes already acknowledged this issue in that previously mentioned paper and he argued that as technology becomes more sophisticated, it will be able to do more and more of the work that is currently done by humans. This will lead to a decrease in the demand for labor, and as a result, some people will be unable to find work.
If look at model below it can be described that current technological unemployment are caused by several factors like technical oligopoly, outdated tax systems, skills mismatch, fast technolofical change and inadequate tax systems. if these issues not responded in proper manner it will cause future problems such fiscal risk, increased inequality, lack of minimum living standards, workforce outdated skills, boredom, and less demand for consumption.
Wage Inequality Issue
like previously mentioned that new technology unlocked many new jobs. new jobs may can absorb more employment but it comes with new problem which is wage inequality3. the new jobs created result from technology development demanding more sophisticated skills from their workers. this kind of skillset mostly acquired through formal education. those who fit on this role mostly have high education level. and those who were able to get high education mostly people with privilege that their basic necessities already fulfilled. career opportunities are limited for those who cannot access high education and most of them are low paying job.
if we see the chart below on study about wage gap between college graduated and high school graduated wage gap throughout the years from 1964 to 2012 using both supply-demand model and measured gap we can clearly see that the gap is keep rising. thus this chart proved us that the technology caused a new inequality issue in society.
Analysis & Discussion
Like studies found earlier in previous passages, we agree that the existence of technology is something really useful and can help human in doing things, we as humans should be aware that the existence of technology in a business is not a threat to human workers rather than tools to make human life easier.
3 Based on OECD findings In many developed countries, employment growth has been weak and income inequality has been increasing. This is due in part to a shift in the employment structure towards high-skilled workers.
This situation is not the end of human labor because some roles cannot be replaced by machines, some roles need human traits such empathy, communication et cetera which cannot be performed by machine. Nevertheless, all the parties in charge of the future of human labor should address the issue immediately before this turns into a serious issue. If this issue is handled well and we can manage how to harness the potential of each machine and workers in doing their role altogether without mismanagement of role, there will be greater possibilities in the future of mankind.
Government Role In Technology Absorption
The technology has been embraced at an unprecedented rate in the business landscape, there are argument that we should limit the usage of technology in order to protect human workers, some argue that we should apply every technology possible to reap every benefit it offer.various opinion that contradict to each other give dilemma to government in making a policy.
If we see this in the grand scheme of things, the existence of technology is really beneficial. the government shouldnt limit the application, they just need to regulate it well so the existence of technology is beneficial to society.
From that chart we can say the government’s role is to support the development of technology in business by implementing policies that encourage technology development and diffusion, as well as removing obstacles to such activities. These policies can include regulatory reforms in product and factor markets, policies that allow domestic firms to take advantage of international sources of technology, and direct policy initiatives providing services to firms aimed at increasing their capacity to absorb new technologies, as well as to engage in collaborative research with other firms. Additionally, policies aimed at improving the management of the science base and reforming support schemes of industrial R&D can increase their leverage effect on firms’ R&D efforts and improve productivity.
Thus, we can say in short that the government should support any form of technology absorption in various industries in the country to improve national innovation capacity. because if the technology is implemented correctly it can improve country productivity and it will boost the economic growth, create more jobs and increase country competitiveness. and it will benefit business, workers, consumers and the country as a whole.
Government Role In Addressing Labor Issue
Applying a massive scale of technology in industries within the country may give a handful of benefits, but it still comes with such an effect like previously mentioned such technological unemployment and income inequality. To overcome these issues we need government to step up and fix this issue through this recommended strategy
a. Technological unemployment
As we know, the development of technology gives birth to various jobs, but the birth of new jobs requires more advanced skills compared to old jobs. facing this condition we may find a lot of unemployed people are lacking these skills.
In several cases the cost of implementing such technologies is high and not every business can apply the technology such as small medium enterprise cannot replace human workers yet. That’s why the government should support small enterprises to turn into small medium enterprises to absorb more human workers. The government should also encourage entrepreneurship and get more people to become entrepreneurs. This would decrease the unemployment number.
Government can influence the demand and supply side in the labor market through integration between the national small business care unit and national job centre. On the demand side, the government fosters the birth of new business and scale up of small business. If many businesses grow then many jobs exist.
In the supply side the government is handling the workers that are impacted from the application of technology. The government can help them upgrade their skills to be able to work again in today’s business era. The government also can tailor the workers and supply the human workers that need jobs to the businesses that joined the national small business care unit. That can happen through understanding the demand of labor trends in the market and supplying it following the demand criteria.
b. Income Inequality
As we know the development of technology gives birth to various jobs, but only few can access the new jobs and it results in income inequality. This may be a problem but it’s a better
problem than high unemployment. but we cannot settle with this, we have to move forward where the slice of pie can be distributed equally where we can press the social inequality issue.
The roots of the inequality are mostly caused by structural economic issues where one cannot access high paid jobs because they don’t have high education and they have no high education because they should put their basic necessities as their priority and they have nothing left to pursue education. This situation seems to have become a barrier for unprivileged people to compete in the high skill labor market. Thus we need to evaluate the labor market and make the position available for everyone despite their education background. We should value one’s real competence and ability and don’t underestimate those who possess these skills but don’t have the required education degree.
As a result of that phenomenon, today we have seen changes in the market and the discussed issue earlier may be refuted. Many new hot jobs don’t require high level formal education like it used to, today many promising jobs appear without considering the educational background since some see it outdated and they see this position requires no formal education background.
Today many high paid jobs born from new technology development such as data analyst, ux and ui designer and many roles in the tech sector require no formal background since these abilities are not gained in university. The ability of these roles are obtained mostly from software bootcamp which is a non-formal education institution. and these classes are not that hard to access. Many people that found themselves stuck in their career can switch the career to a high paid job only by taking these classes.
Based on the findings, since today’s job does not need a high degree anymore we can push the income inequality increasing the demand for that job, also increasing supply of the human workers. so more people have access to these jobs and more people get paid well.
On the demand side, to increase the demand, the government should make it easier for businesses in the tech sector to operate in Indonesia to absorb more workers to work in high paid jobs. To support these businesses the government should make the permit easier, facilitating the business or even lowering the tax so more businesses are willing to invest in Indonesia. the more tech businesses operating in Indonesia the more jobs available here.
On the supply side we should encourage people and businesses to make more classes for required roles such as coding class, data analyst class or ui ux designer class. The government should also facilitate the class by collaborating with them in developing the curriculum, allowing the facilitator to learn abroad to gain new insight, or even hire international experts to train local software engineers.
We need to learn from India, who are able to breed many brilliant software engineers and are able to improve their economy. Choosing the IT industry to jumpstart the economy and reduce the income gap is the right decision because it;s the technology that is being developed right now, the demand is high, the workers salary is high and the most important thing is the barrier to enter the career is pretty low.
To become a doctor you need huge funds to enter medical school, to become a lawyer you need to enter law school, to become mechanical engineer you need to enroll in a university which has an expensive facility to facilitate the study. Meanwhile, to be a software engineer, ux ui designer you only need a computer and the facilitator only needs a computer too. The cost barrier is pretty low and everyone can access this despite only having a strong willingness.
This may not be a smart idea to focus all the resources and allocate the labor to get into the IT industry since we need to distribute human workers in various industries with the income gap between each position in various industries is not that huge. In various sectors such as manufacturing and construction we also need to improve the certification body to give training and certification to workers to excel in their job and get an increase in their salary. and everyone should be able to get certified despite their education background as long as they can perform the job well.
We also need to facilitate all the workers to get all the training needed by giving them scholarships or subsidizing the enrolling cost to make all informal education systems or certification bodies affordable to anyone so we can get many human workers to improve their competence and to increase their income. The more competent workers in the country the more competitive the country is, also the more prosperous the country will be and it can increase the economic growth of the country.
Business Role in Addressing This Issue
We all know that the aim of business is to generate revenue. However, as a company, we also have a responsibility to provide a good life for all of our workers. This is because every penny that we give to our workers is used to support their families. In addition to generating profit, businesses also play an important role in maintaining macroeconomic stability.
It’s good for business to adopt technology to increase productivity and efficiency but businesses should also think of their labor workers. If businesses decide to replace human labor in certain positions to be replaced by systems or robots, businesses should think about accommodating their human workers regarding their role and occupation. a good business should keep fulfilling their social responsibilities to their employees. It can be training the employee a new skill to be replaced by a new position in a different business unit in the company. because if the company can manage the human resource well it can be beneficial for them and it will help the company to thrive. If many workers in a company are replaced by technology, it will become a surplus of human workers in a company and it’s an opportunity to expand their business knowing they have a lot of talented people ready to be teamed in a new business unit. Thus the development of technology is not also benefiting the business, it is also benefiting the people.
We don’t need to find new ways to tackle this issue. We can learn from global companies in addressing this issue. For instance Amazon has been utilizing technology for years to automate its warehouses. Back in 2017, the company revealed its intention to invest $700 million in additional technology, aiming to automate a larger portion of warehouse tasks. Despite this move towards automation, Amazon has assured that no employees will lose their jobs due to these advancements.
Rather, the company intends to provide retraining opportunities for its workforce, enabling them to acquire new skills and continue their work within the warehouse.
Another company that uses the technology is McDonald’s, for years McDonald’s has been using self-service kiosks in its restaurants. These kiosks allow customers to order their food and pay for it without having to interact with a human cashier. To deal with the workers that get their job replaced, McDonald’s has said that the technology application doesnt translate to job losses to its workers, but the people are relocated to new jobs in other areas, such as customer service. Learning from them makes it possible for companies to generate more revenue by applying technology, retaining existing workers and improving productivity and efficiency.
Achieving the Life Keynes Imagined
If we go back to the earlier chapter of this essay and see what Keynes said about the future where technology has fully developed. He argued that if the technology is well applied, people don’t need to do the harsh work anymore; humans can explore fields that interest them and make it as a living. people will have more leisure and improved life quality
We may be on the verge of keynes vision where technology can do the human job and increase productivity and we are living a quality life where humans work fewer hours than compared to several decades ago.
Data shown below shows that in the past 20 years the global usage of robots has increased. If we see from the annual shipment of robots worldwide in the past 20 years the number has risen 536.36% from 99 thousand units in 2000 to 630 thousand units in 2021.
At the same time, working hours are declining slowly throughout the decades. In the past, people worked very long hours. In 1870, workers in early-industrialized economies worked more than 3,000 hours per year, which is equivalent to 60–70 hours per week. However, working hours have decreased dramatically over the past 150 years. In Germany, for example, annual working hours decreased by nearly 60%, from 3,284 hours in 1870 to 1,354 hours in 2017. In the UK, the decrease was around 40%. This means that people today work about half as many hours as they did in the past.
However, this condition is still far from perfect. We still have so many issues we have to solve in the future such as those already mentioned in the previous chapter, which is technological unemployment and income inequality. If we collectively work on this issue, government, private and people working to resolve this issue, the future of mankind will be bright.
Reference and Citation
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