The fallacy of high tech jobs

Common Sense wonders are high tech jobs the future for American workers?  Or is all the talk of a high tech job growth wrong?

A year or so ago, Common Sense noted that middle class prosperity was historically based on a strong manufacturing economy.  However, the myth of "high tech economy" is clearly still with us.  Consider the central question: does technology create as many jobs as it destroys?  Does it create more? 

Certainly there are many examples where technology destroyed a great number of jobs in some industry.  Farming comes to mind.  Farm equipment technology dramatically reduced the number of people needed to produce food.  It, in fact, destroyed farming jobs.  Of course, someone had to make that farm equipment.  So many of those farm jobs were replaced by farm equipment manufacturing jobs.  But were they all, or did many displaced farm workers have to do something else? 

In an expanding economy finding something else to do is generally not extremely difficult.  The advent of farm equipment technology coincided with enormous growth in the standard of living and in manufacturing technology generally to support that higher standard of living.  With many more manufacturing jobs available moving from farm work to manufacturing work was relatively easy.  But is it always possible to move from one technology to another?  Is it possible to move if the economy isn't rapidly expanding?

In many ways advanced technology poses a very different job challenge.  It tends to replace much larger numbers of jobs without creating much change in the standard of living.  Consider, what happens when an automobile assembly line worker is replaced by a robot assembler.  That change doesn't necessarily change the cost of the car.  It doesn't much change the number of cars made.  Indeed, it might actually reduce the number of cars made since the cars are of generally higher quality and last longer.  Unfortunately, much advanced technology driven change simply destroys what were previously middle class jobs without creating offsetting economic growth.

Even when technology produces a new an innovative market, those markets are often saturated within only a few years.  Consider cell phones.  The basic technology was invented in the early 1970s.  The FCC licensed the first networks in the 1980s.  Today, some 30 years on, nearly everyone in the US that wants a cell phone has one and cellular providers now compete on features that are often only marginally useful in a frantic effort to maintain market share.  Market saturation for technology is often measured in only a few years or tens of years. 

When markets saturate they are then driven by replacement not growth.  Such markets produce often rapid job growth, then jobs plateau, and then jobs decline to a reasonably stable mature market.  Stable, replacement driven markets generally require fewer workers. 

Common Sense notes that "high tech" isn't some sort of magic incantation.  That it is in some ways inherently job destroying.  That it is in some ways unstable in that high tech jobs are created and vanish rapidly. 

As we think about economic recovery and preserving the middle class we need to keep these notions in mind.  That's just common sense.