Automation and technological change; Automation and employment

On automation and technological change. From New York City Riverside radio in cooperation with the American assembly presents the second of four programs on automation and technological change. Program to considers the subject automation and employment. Today's panelists are Ruskin member of the editorial board of The New York Times and Eli Ginzberg professor of economics Columbia University. Before we begin today's discussion a brief apology for its technical quality. This program was recorded in a committee room in downtown New York and is not up to usual studio standards. Now with some introductory comments. Here is your moderator. I have our birth associate professor of business Columbia University Dr. Bird the American the family

stands for the proposition. Democratic process study and discussion are essential to a national consensus. Since its establishment in 1950 by the way the Eisenhower emerging in some ways encouraged widespread discussion of 24 issues of national policy. One such issue automation and technological change is the subject of this American assembly program press against Barack and what in your judgment are the probable long range effects of automation on employment. I'm reminded and part of Mr. Cantor's famous statement of course in the long run were all of that but more seriously in the long run it is made out of a series of short periods put together. So maybe one hour beginning with the trend that one can see more clearly I think that Iraq has witnessed a rapid climb or hide. You're seeing a labor force that is hardly grown in recent years. Transportation is seen

declining labor force. So the gentleman that I make from my past experiences of where the machines really come in this sector are where they come in to and not be an expanding sector farming in recent decades at least that then raises the question as to whether we can expand the service sector of the economy you know or whether something unexpected will happen in manufacturing to really suck for people who are now employed who may be dislodged by the machine and all we have are young people who are coming into the labor market. My interim let's say neither short or long or a point of view is that we face a serious problem. Mr. Raskin used to give various suggested services in the economy might be the sector in which we might look for exposure. What is your judgment. Well I have no doubt that the service side of the economy will expand as it has been expanding and yet I am very skeptical that it's going to expand

enough and I'm not at all sure that over the long haul that even that will be altogether true. It may well be that we will also peak out in the services and that we will have to adjust to the notion that we are going to have a declining need for people at a time when the birth rate indicates we need more jobs rather than feel like I can take the particular field that I had already mentioned. Agriculture it right. It is an enormous one precisely because people dislodge from useful employment on the farm. I haven't had any place to go. Those who go on and congregate in the slum areas and become a problem and find no useful outlet for their energies and talents. Mining areas have the same problem. Now they are a very visible problem because the hard to dislodge farmer dislodged coal

miner tends to stay in his own in his own community so you can see the other where there's been a shake up of equally dramatic proportions. You don't say so that I don't think that even on a very limited kind of impact of technological change which we have had up to now that we are doing any kind of job expanding our economy sufficiently to take. The needs of these people to give them some sense of importance and function in AI society. And since I believe that we are only on threshold at technological change trench reality of automation I am very strange. When the light says it's a serious problem I concur but I wonder where the source of your rest comes from. The degree to which the service industry will expand beyond some

trivial level comes from the group to which the service industries to be able to automate use techniques. Well I think that in many areas the services themselves will be automated that there is a great range of services a great expansion possible. Certainly education leaps to mind as an area in which there is a tremendous need actually to the extent that there may be a possibility of adapting people. Education is the primary way of doing it. Schools are college systems are all inadequate to the problem. Now there is a great need for Client Investment from teachers for educational personnel of all kinds so that certainly recognizing that there will be much agonizing. Teaching there is a realm of expansion and yet that is the one area of society that

has shown a very nice expansion just kind of saying that connection we are not look forward to much relief educational from because in a certain signs the major impact. On expansion of education is already. Much elevated birthrate and the youngsters are already through the elementary system and into the high school system we can expect some additional comments from an employment point of view as we raise taxes and improve the quality of the high school level and as we expand colleges but we can't expect too much I think. Well I've heard rumors around the cars of the road to school business because again there is some prospects. Public employment public services exclusive education might play a considerable job possibilities

some research suggesting public activities account for a considerable portion of the exposure that we have enjoyed. We should recall that there has been a considerable expansion but we must remember the federal government has not been increasing its direct employment at all for the decade that all of one federal government has been responsible for an increase in employment in defense and space and atomic energy areas. It has been a significant increase. Want to take a very quick step of the five to six million people. In what we conventionally call a private sector are really being supported by the federal government dollars and products that only the federal government uses like this but you know you've heard that already it diminishing us right now on a site we have in the United States coming out of study doesn't mark say that in fact you want to begin to cut back on defense programming so I don't think one can and the

actions of a really serious deterioration in international affairs. Much new employment at the heart of the federal program the big gains in governmental employment last decade have at the state local levels have only to education and that of the general services that support the increased total population. So let's take medicine for second which has been a fast growing field roughly roughly doubles and C in the world I want to say 800000 to about a million and a half plus. Do we really want an indefinite increase in medical services are obvious option. We really feel that if we are lucky we will be able to do something preventively some people get sick sextet So we really don't want to see all of our resources you need services many of which are nonproductive. So the question of payment I want to have a baby now you've been helping me. The question of how do you pay for services.

There's an interesting and complicated affair and I would say one of the real deterrent to the easy expansion of many of the service areas I mean why isn't that an area also where we have to reorient our thinking as to is it more expensive to have people in Iowa to have necessary public services. Not for sale when you if you accept as valid Secretary Rice's estimate was indorsed by President Kennedy. Unemployment was costing us 30 or 40 million dollars a year that is a real economy to say as President Johnson does. We got a break on federal spending. I don't have to be a spender to be liberal and so on. All are reminders of the comment that was made by one of the senators from New York state that calling a certain margin on military bases would involve a greater cost in the long run than or along the maintenance of the obsolete facilities and the payment of personal presumably less essential

defense world. That brings me back to the question you asked me earlier which I ducked a little bit of her research for kind of like problem discussion I surely agree with what I said a few seconds ago that the question. Private accounting system and our sense of the terms not acquiesce to really feel a balance between total course and total benefits. I actually believe and I think the president's sector workers estimate is probably an underestimate of the real course not employing all people who are able capable and willing to work. Our problem is that we have not devised in our society. Very many easy to shift to employ people except at competitive wage levels which even include minimum wage levels. As I see the problem there are

a large number of people who work to 60 70 maybe 80 percent of average productivity but we have no way to pull a name there either. It had a hundred percent average productivity or they're out so that if I look ahead I would suspect that the 1960s to the second part of the decade see because of the severe numbers of people who will not be employed a real expansion in work relief programs and the president has just announced as part of his property by Vietnam to his advisors have suggested. That they are moving in the direction of lease with you to a series of programs which will be of the nature of training education and work. You are one of the things that disturb me and I know it has you in your own studies is that to the extent that people are currently being dislodged by changing technology by changing the nature of the industry that. Not only is it difficult to retrain them to know what to retrain them for but to the extent

that you do find a place where their skills can be adapted their educational background to permit their reabsorption into the economy that the evidence was getting would seem to indicate that they come back again at a much lower level. Perhaps one of the few places where you would have some statistical evidence is in that experience that they are automation Committee had a good try and made a very conscientious and imaginative effort to accept social responsibility when they caused the packing house. Try to find new jobs for the people they did work retraining programs they found that. Despite all our normal state employment service and all the rest of the scientific personnel practices we have that most people seemed correct in their jobs and they're out there for those who took retraining at what price the end result was that they came in at wages about

fully a third of all of those they had been accustomed to so that in this whole war on poverty we find a new factor of people like totally dislodged and become dependent and that even those who are re-employed tend to be re-employed at very close to the poverty level case. These are people that had been earning about two dollars and forty cents an hour on an average. They came back in at about a dollar sixty an hour which would give you just about a $3000 annual arning which is our cutoff point by definition for poverty. However there are as you said yourself a friend of the people who are currently living in very low in agriculture there are still we are retraining under the manpower Training and Development Act and through other federal programs where one study their occupational history you get the impression that the new training is really opening up opportunities. But I think that the unions are concerned in the established industries

that they have very little chance of getting anything like their earnings. That's what makes it so tricky. You're suggesting that the problems really are much more complex than simply change. Change affects different people with the possibility of. Getting out another kind of issue becomes more sophisticated and applied on a large scale to more and more activities. What changes can be anticipated in employment potential services and the expansion contraction in agriculture into the green tree. Tell us about the nature of employment. I think you had us guessing earlier on total why should we guess about occupational movement the most extreme formulation be to say that

the classic areas of shortage in recent years. Namely engineers tool and die makers and so on. May be areas in the occupational hierarchy which will suddenly turn shortages into services. I heard the vice president of a major airlines say with our last 48 hours that there are acres of engineers on the West Coast. He looks forward to being seen displaced if the defense program really goes down. Right now we train people who are not going to be easy to eaves or we know some of the new tape machines in the tooling area will perhaps bring about a considerable easing of the number two and I know that one will need to do a fair amount of the more intricate tooling that we have interestingly enough. Depending on the size of the rounds and that is the limiting factor I want to measure it will obviously pay the employer to try to put his machines in a way to make the greatest savings in terms of to

not pay for labor. But even on the size of the run that may cease to be nearly as much of a limiting factor because now machines are becoming much more flexible and there are many modern purpose machines which can make a relatively small number of product and it will still be economical and they changed so that you could have a job lot type of automation in which relatively small manufacturers would be involved in the engineering field there is a very real possibility that even if the need in aerospace for engineering talent or the fruits of engineering talent remains constant or expands that machines could take over a large part of it a good deal of the engineering and design function is being done by machines and perhaps much more will be done so that you might very well have even given the same state of overall a different climate. Not one planet but a defense contract procurement

far less need for engineering talent as well as production. When we talk about design engineering personnel seems to me you're both coming much closer to the heart of management. You were asking whether on the basis of your many years of observation of this bill whether it's your judgment that we do anticipate extended orders technological change in those areas that come closer and closer and closer to management's own well I think you might well have a lemonade is one thing which proves creative imaginative which turns out to be highly. I have seen with many other areas of decision making I think it is quite true that in terms of what kind of is there a market for and then the creation of that machine might well do all of

that. Estimating the tension like an estimate the packaging do almost all of the things which we regard as real executive decision making. Without the infusion of personality. Conflict and other things which often get in the way a rational decision. This might make for a much more serious would make for a much quieter ascetic kind of economy might offer a terribly dull one but I would look forward to to a very real change very real shakeout in the executive area as well as all of their lives. Iran the important point that's missed about automation or any type of significant technological changes. To give you an excuse to do a lot of other things you should have done anyhow. In my opinion for the last 15 years at least since the end of World War Two was relatively high fives. We have built up a fantastic superstructure of white collar executive in my

opinion not decision makers or they're just they're doing something that's useful. But actually somewhat critical review of the management structure. You could really get on with many fewer. I've been impressed with the fact that the best a foreign business gets on with many fewer people with square foot of effort that is needed so that I think it's clear that just as the introduction of automated machinery. To the smaller people being the call of the White House when the mills were back up again. So I suspect that if you get enough tuna data management to put some of these machines in a lot of things get restructured and one of the things that have the softness gets in my executive rounds come in the sense of full circle that what looked to be different sectorial problems

is a culture of blue collar white collar over the long haul we may have these problems replicating themselves in different sectors of the workforce plus or minus responses postures and all the rest. Maybe I could switch around just a little bit in the time we have remaining and ask both of you whether in your judgment adequate preparations are being made by the institutions concerned most particularly with coordination problems. Are corporations and unions government government agencies federal and state level and the so-called educational establishment prepared for a meeting in what ways are the herd and what are they doing. Can they do well. Answer by saying that there is no I myself where I don't think there's any question I think that is where industry is concerned. I never enjoyed any

writing and I certainly know what I describe as a curse to the society fast becoming a cursed society for years that this moment we have a concern that nobody has any very adequate and my own feeling is that it is a very comprehensive vision and this will be inter collective bargaining. KLEIN I don't think that the coal industry could've been asked to make a charge on production of all just people. People were squeezed out of the coal industry mechanization as the price of survival that when the coal industry in China had the mechanization in mind there are many other industries in which I suspect that even the Triton approach the notion that you know not just people who are currently in the job be a feasible answer and yet

within the scale of private mining I think attrition is about the best poignantly that our trade in a solution of the problem of those who are already here by that extent at the expense of those who are outside. Youngsters coming in like those historically excluded they rate ideas quite understandably as a conspiracy against them. We say our protection we had Employment Act of course and I just had some discussions with Representative Curtis's about whether Congress is to be chided for acting under the mandate of the Employment Act adequately and not I believe that has not done enough under its own commitments. Congress has done fairly well on trying to energize the training and retraining structure. But after all you can only go so far that the problem is also the availability of jobs and its on the jobs that we have you know actions I mentioned. But I thought of the

power the program of the president would assume moved directly on the job expansion end of story. We made this very heavy commitment that the tax cut will stimulate demand which will increase output which will increase employment I think we've made much too heavy on that particular approach to the problem with that is a tendency to fear new expenditure programs so that I would say that we're beginning to talk about shorter hours so that things are beginning to grow and I expect that things will have to get a little worse. Things are a bit I suspect Bloom just over the horizon live a little more obvious to more people before we get appropriate social responses. Do you feel that we can rely on private decision making as the primary answer or do we need more plans are you heard all of my comments had to do with the government practically which indicates by implication that I fell very heavily if this flies in the domain of public policy.

For instance we might throw the question that you've raised Mr. Ruskin back in your lap and ask you what you think about the degree to which we can. Demand that the private sector pick up that appears to be an extraordinary snark. Well I think that the solutions have to be both private and public and yet I think that we must accept in this country just as democratic Britain Scandinavian countries have the necessity for a great deal of social planning social interaction for the economy otherwise I don't see any hope at all of coming into this problem. Would you be willing to express some of your own views on the particular kinds of planning of the areas in which this planning will take place. You I mentioned tax reduction pretty marginal kind of planning device. Obviously the economists. The numbers himself might not see this is it. What other kinds of devices.

Well I would get away from prying but if it does go into the matter of national commitment that we set as a matter of basic governmental policy then that to the extent we find it possible safely in this troubled world to begin cutting back on our arms expenditures are enormous knowledge carried out by of a billion dollars a week that that money be redeployed in to the carrying out of urgent social need and the creation of jobs in the public sector to make up for the deficit of jobs in the private sector. At the moment our federal climate as you guys indicated has stood still. State and local employment has expanded primarily in education but the probability is that we're nearing a ceiling there. If there isn't a conscious policy of making money available I don't think we're going to be anywhere close to getting a balance and I would think that this since we are ready to spend this

money for survival but this is an area of human survival it is only as important. This suggests there's Tarascon. A point at which we might draw our discussion to a cause we call the comments that President Kennedy made his commencement address at Yale. There was a need for a rethinking of the traditional attitudes. We've been living within our society. With respect to the. Appropriate roles for private public agencies and economic social decision making machinery and express our gratitude to both of you for presenting us with a large number of provocative I view if occasionally pessimistic at least challenging. From New York City Riverside radio in cooperation with the American assembly has presented the second of four recorded radio discussions on automation and technological change. Heard today discussing automation and employment. What

Eli Ginzberg professor of economics at Columbia University and aged Raskin member of the editorial board of The New York Times this. Moderator was I-bar Ybor good associate professor of business Columbia University Riverside radio would also like to apologize for the technical quality of this program. The discussion was recorded in a committee room in downtown New York and obviously was not up to usual studio standards. The subject for discussion next week some educational implications of modern technology. This is the national educational radio network.