Unemployment and technological change

| May 1, 2015

The conventional definition of employment is undergoing a gradual transformation. David Coleman says we need to change our mentality to one where material necessities are provided for without having to work in the traditional sense.

Increasingly our focus on maintaining full employment appears to be a mirage that cannot be sustained in the modern world. Assuming that work ultimately is a purpose driven activity involving effort which leads to a result and that an individual is then paid for their contribution to society, from a policy perspective, we as a society may be banging our head against a brick wall if we think that it is possible or desirable to maintain full employment.

Part of this is because we are now at a point where the technology of industrial and production means that the output of one agricultural or factory worker is on average perhaps five times as high as it was in 1950. The economy of the modern world is one of astonishing productivity, and this miracle is achieved without the demand for labour that was there in the past.

Naturally there are jobs that are created in inventing, maintaining and updating machines and technology but the total employment resulting from these activities will never employ as many people as the original tasks that machines were designed to perform. Also, there are forms of labour that remain incapable of automation such as entertainment and human services like teaching and healthcare, although even those tasks are beginning to undergo automation as artificial intelligence begins to become a reality.

Given that work under its traditional definition is increasingly becoming unnecessary, our society will need to change its mentality to one where material needs are provided for without the need to work in the traditional sense. In fact, by forcing people to ‘work’ we are actually increasing the inefficiency of our economy by making them undertake tasks to justify their need and entitlement to social security payments when these tasks have no underlying meaning.

Some countries have begun to experiment with the idea of the social dividend which is like a form of reverse taxation. Norway and Alaska, for example, have massive oil revenues credited to their respective governments, and citizens of these states are paid a dividend from these funds. This is more than a payment on a needs basis like the age pension or unemployment benefit; it is a payment that every citizen is entitled to regardless of need or present living standard. Its advantages are that it gives each citizen the security of an income which can at least assist with the cost of living and therefore the freedom to pursue projects that truly benefit society.



  1. Max Thomas

    Max Thomas

    May 6, 2015 at 4:47 am

    Working for the sake of it

    "The fact is that moving matter about, while a certain amount of it is necessary to our existence is emphatically not one of the ends of human life. If it were, we should have to consider every navvy superior to Shakespeare" (Bertrand Russell). David Coleman suggests that unemployed citizens receiving income support will be free to pursue projects that truly benefit society. Some unemployment results from a mismatch between the available work and the skills of those seeking it. Such 'frictional' unemployment might be addressed by education and training. However, what is truly beneficial to society is likely to be controversial. Russell contends that work consists of moving matter about or telling others to do so. Work of the second kind generally attracts the greater rewards. Politicians and their advisers are another class of workers who rely not necessarily on their knowledge of the subject, but on their persuasiveness. We have seen numerous 'beneficial' projects that turned out to be costly and disastrous political mistakes. Likewise, we've witnessed the entry into politics of obscure individuals barely able to articulate their reasons for doing so. I am not convinced that unemployment, traditionally regarded as an indicator of economic disorder, can be redefined as socially beneficial without appropriate skills and commitment to meet clearly stated objectives.