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Chapter Nine

Technology and Jobs:
More of One and Less of the Other?

Main Idea: Technological innovation usually results in increased productivity.  In other words, thanks to technology, we fewer people can produce more goods.  This unit looks at impact of increased productivity and the question of its impact on employment.
  • While individuals and particular industries may be negatively affected by increased productivity due to technology, it is important to keep the big picture in mind:
    • Even if all available technologies were used to their utmost, there would still be plenty of work to do. (needs and wants do not decrease)
    • Technological advances will not lead to job losses if the demand for products and services increases at the same pace as increases in productivity.
    • Technological change generates problems which require a great deal of work.
    • Technology produces jobs that had not previously existed: most of today's occupations did not exist 100 years ago.
    • Technology has an "indirect effect" on employment. "The automobile industry is directly or indirectly responsible for at least one out of every seven jobs in the American economy."
    • There are limits to how far the process of automated production technology can go.
    • Technology has caused the structure of the economy to change: most new jobs are in the service area rather than in manufacturing and agriculture.

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