CullmanTimes.com - Cullman, Alabama

Business

January 23, 2013

NATION: Recession, tech kill middle-class jobs

(Continued)

NEW YORK — Candidates for U.S. president last year never tired of telling Americans how jobs were being shipped overseas. China, with its vast army of cheaper labor and low-value currency, was easy to blame.

But most jobs cut in the U.S. and Europe weren’t moved. No one got them. They vanished. And the villain in this story — a clever software engineer working in Silicon Valley or the high-tech hub around Heidelberg, Germany — isn’t so easy to hate.

“It doesn’t have political appeal to say the reason we have a problem is we’re so successful in technology,” says Joseph Stiglitz, a Nobel Prize-winning economist at Columbia University. “There’s no enemy there.”

Unless you count family and friends and the person staring at you in the mirror. The uncomfortable truth is technology is killing jobs with the help of ordinary consumers by enabling them to quickly do tasks that workers used to do full time, for salaries.

Use a self-checkout lane at the supermarket or drugstore? A worker behind a cash register used to do that.

Buy clothes without visiting a store? You’ve taken work from a salesman.

Click “accept” in an email invitation to attend a meeting? You’ve pushed an office assistant closer to unemployment.

Book your vacation using an online program? You’ve helped lay off a travel agent. Perhaps at American Express Co., which announced this month that it plans to cut 5,400 jobs, mainly in its travel business, as more of its customers shift to online portals to plan trips.

Software is picking out worrisome blots in medical scans, running trains without conductors, driving cars without drivers, spotting profits in stocks trades in milliseconds, analyzing Twitter traffic to tell where to sell certain snacks, sifting through documents for evidence in court cases, recording power usage beamed from digital utility meters at millions of homes, and sorting returned library books.

Technology gives rise to “cheaper products and cool services,” says David Autor, an economist at MIT, one of the first to document tech’s role in cutting jobs. “But if you lose your job, that is slim compensation.”

Even the most commonplace technologies — take, say, email — are making it tough for workers to get jobs, including ones with MBAs, like Roshanne Redmond, a former project manager at a commercial real estate developer.

“I used to get on the phone, talk to a secretary and coordinate calendars,” Redmond says. “Now, things are done by computer.”

Technology is used by companies to run leaner and smarter in good times and bad, but never more than in bad. In a recession, sales fall and companies cut jobs to save money. Then they turn to technology to do tasks people used to do. And that’s when it hits them: They realize they don’t have to re-hire the humans when business improves, or at least not as many.

The Hackett Group, a consultant on back-office jobs, estimates 2 million of them in finance, human resources, information technology and procurement have disappeared in the U.S. and Europe since the Great Recession. It pins the blame for more than half of the losses on technology. These are jobs that used to fill cubicles at almost every company — clerks paying bills and ordering supplies, benefits managers filing health-care forms and IT experts helping with computer crashes.

“The effect of (technology) on white-collar jobs is huge, but it’s not obvious,” says MIT’s McAfee. Companies “don’t put out a press release saying we’re not hiring again because of machines.”

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