Technology and Employment

Report Outline
Perspectives and Trends
Jobs and Structural Change
Employment Policy Options
Special Focus

Perspectives and Trends

Factors Influencing Employment Outlook

Recently published economic data have led both government and private forecasters to revise their projections in favor of an earlier than expected recovery from the nation's deepest recession since the 1930s. The Commerce Department predicted in June that the nation's economy would grow by 5 percent by year's end. The agency also predicted that 23 of the 29 major industrial sectors it considered in its midyear review would fare better this year than last. Civilian unemployment, which reached a postwar high of 10.8 percent in December 1982, had declined to 10 percent by June 1983. Re-employment has occurred throughout the economy, “in both the goods-producing and service-producing sectors,” according to Janet Norwood, commissioner of labor statistics for the Department of Labor. Since December manufacturing industries have hired or rehired more than 365,000 workers, she said, while the service and trade industries added 500,000 and 200,000 respectively.

Despite signs of an economic rebound, overall unemployment is expected to rise again as some of the nation's 1.8 million “discouraged” workers — those who have stopped looking for work and who are therefore not included in official unemployment statistics — return to the labor force as the recovery picks up. And according to the AFL-CIO, if the six million part-time workers who actually want full-time jobs were counted, the current unemployment rate would approach 14.3 percent, the equivalent of 16.1 million jobless Americans.

Some observers attribute today's high unemployment to temporary or cyclical causes, such as high interest rates. But most economists believe the principal causes are “structural,” the result of major changes in America's economy due to such factors as increased foreign competition, the introduction of industrial robots and other forms of automation, and the shift away from labor-intensive industries toward more efficient ones. Those who support the structural unemployment theory believe that a large proportion of the jobs lost during the current recession will not reappear with recovery, or ever again for that matter. “Transition means dislocation. It means that workers must stop doing old jobs and learn new ones,” said David L. Birch, director of the Massachusetts Institute of Technology's Program on Neighborhood and Regional Change. “It means that companies must contract some operations and start up new ones. It means that many firms will vanish altogether and be replaced by new ones.”