“I’m washing lettuce. Soon, I’ll be on fries. Then the grill.” (Coming to America). At least he has a job.
[This article is an example of developmental or evolutionary history.]
I look upon the recession of 1980-2 as perpetrated on the world to shed workers made obsolete by automation. (1)
Workers were laid off, probably with offers to rehire, and then just not rehired because they’d been replaced by a machine.
Recession layoffs eliminated the need for severance pay. Society had to absorb the visible and hidden costs of the worker made obsolescent.
One banking CEO said that “theoretically every time you make a $10,000 investment on technology you should have replaced one employee.” (2)
So that was the calculation: Each machine to replace at least $10,000 of human labor.
The replacement of paper hospital records with computerized records is typical:
“Paper patient records are proving increasingly inadequate to meet the modern information needs of group practices. Computerizing patient records can improve physician access to patient information and thereby also improve patient care and outcomes management.
“By investing in a computerized patient record system, practices can optimize revenues by saving labor costs associated with record retrieval, photocopying, filing, and other processes.” (3)
No attention was given to the workers made obsolete.
Some production became robotized. We were always told that robots would be labor-saving. We didn’t know that we’d be the labor saved. Moreover, robots don’t pay taxes.
All of this was justified as being part of the “rip-snortin'” climate of business at the time, that forced automation and off-shore outsourcing upon business:
“Forced upon business by unprecedented global competition and financial turbulence, the change is so swift and powerful that it is churning across the business landscape with the force of an army of bulldozers.
“American companies have started the huge task of rebuilding themselves from the ground up, erecting a sleek new operating architecture to replace the unwieldy processes of the past. … Their aim: to produce streamlined, combative concerns that can withstand the frenetic, competitive pace of the late ’80s. (4)
Business was seen as a worldwide struggle for survival in which only the “fittest” survived. As one commentator put it: “Social Darwinism is respectable again.” (5) Business had become predatory and “he who hesitates is lunch.” (6)
By the 1990s, we had jobless recoveries from the regularly-occurring recessions:
“The only downer in the May employment report was continued evidence that manufacturers are still loath to expand their payrolls. Indeed, factories shed 39,000 workers last month on top of the 75,000 they let go in April and the 19,000 released in March.” (7)
Automation was regarded as a revolution and revolutions were always bloody:
“Revolutions are always bloody, and the productivity revolution is no exception. As companies large and small embrace new technologies and eliminate jobs, millions of workers are finding that their old careers are becoming obsolete.
“In just the past year, even as the economy grew by 2.6%, more than 500,000 clerical and technical positions disappeared, probably forever. And better information systems are eliminating the need for lots of middle managers.
“It’s no wonder why so many Americans are distressed: They see their paychecks lagging inflation and they worry about joining their families and friends in the ranks of the unemployed. To these folks, the productivity revolution is a threat, not a boon.” (8)
Automation bit deeply into the job market. There are no “entry level jobs” any more. No one needs file clerks, typesetters, travel agents.
It made it a buyer’s market for labor. Goodbye, trade unions. Goodbye, pension plans, benefit plans, “permanent” employment, paid vacations, paid medical leave, etc.
(Concluded in Part 2, below.)
Footnotes
(1) I say “1980-82” but I’m not absolutely certain. I’m certain of 1982 being part of it because I was laid off then and went back to university.
(2) James Miller, CEO of Royal Trustco in Macleans, Nov. 23, 1992, 44.
(3) George Russell, “Rebuilding to Survive,” Time, 16 Feb. 1987, 46.
(4) David Olive, “The New Hard Line,” Report on Business Magazine, October, 1991, 15.
(5) Loc. cit.
(6) Rosemarie Nelson. “Computerized Patient Records Improve Efficiency And Patient Care,” Healthcare Financial Management, April 1998, 86.
(7) James C. Cooper and Kathleen Madigan, “Suddenly, the Job Engine is Purring,” Business Week, June 21, 1993, 29.
Business Week describes the results:
“Perhaps the most striking aspect of the latest [Bureau of Labor Statistics] survey results is the downward mobility of so many workers. The median nominal wage of reemployed workers declined by 11.8%. Over 40% of workers back at full-time jobs were earning less than they had on their old ones, and more than 25% suffered pay cuts of 20% or more.” (Gene Koretz. 1991. “What Happens to the Jobless? Many Don’t Bounce Back,” Business Week, Sept. 16, 1991, 24.)
(8) Michael J. Mandell and Christopher Farrell, “Jobs, Jobs, Jobs — Eventually,” Business Week, June 14, 1993, 72