“Into the Unknown”,
first published in The Economist on November 13, 2004,
“HAS the machine in its last furious manifestation begun to eliminate workers faster than new tasks can be found for them?” wonders Stuart Chase, an American writer. “Mechanical devices are already ousting skilled clerical workers and replacing them with operators...Opportunity in the white-collar services is being steadily undermined.” The anxiety sounds thoroughly contemporary. But Mr Chase's publisher, MacMillan, “set up and electrotyped” his book, “Men and Machines”, in 1929.
The worry about “exporting” jobs that currently grips America, Germany and Japan is essentially the same as Mr Chase's worry about ...view middle of the document...
“We travel in vehicles that were not yet invented that are powered by fuels not yet produced, communicate through devices not yet manufactured, enjoy cool air on the hottest days, are entertained by electronic wizardry that was not dreamed of and receive medical treatments that were unheard of,” writes Mr Nordhaus. What hardy late 19th-century American pioneer would have guessed that, barely more than a century later, his country would find employment for (by the government's latest count) 139,000 psychologists, 104,000 floral designers and 51,000 manicurists and pedicurists?
Even relatively short-term labour-market predictions can be hazardous. In 1988, government experts at the Bureau of Labour Statistics confidently predicted strong demand in America over the next 12 years for, among others, travel agents and petrol-station attendants. But by 2000, the number of travel agents had fallen by 6% because more travellers booked online, and the number of pump attendants was down to little more than half because drivers were filling up their cars themselves. Of the 20 occupations that the government predicted would suffer the most job losses between 1988 and 2000, half actually gained jobs. Travel agents have now joined the government's list of endangered occupations for 2012. Maybe they are due for a modest revival.
You never know
The bureau's statisticians are now forecasting a large rise in the number of nurses, teachers, salespeople, “combined food preparation and serving workers, including fast food” (a fancy way of saying burger flippers), waiters, truck drivers and security guards over the next eight years. If that list fails to strike a chord with recent Stanford graduates, the bureau also expects America to create an extra 179,000 software-engineering jobs and 185,000 more places for computer-systems analysts over the same period.
Has the bureau forgotten about Bangalore? Probably not. Catherine Mann of the Institute for International Economics points out that the widely quoted number of half a million for ITjobs “lost” to India in the past couple of years takes as its starting point the year 2001, the top of the industry's cycle. Most of the subsequent job losses were due to the recession in the industry rather than to an exodus to India. Measured from 1999 to 2003, the number of IT-related white-collar jobs in America has risen (see chart 6).
Ms Mann thinks that demand will continue to grow as falling prices help to spread IT more widely through the economy, and as American companies demand more tailored software and services. Azim Premji, the boss of Wipro, is currently trying to expand his business in America. “IT professionals are in short supply in America,” says Mr Premji. “Within the next few months, we will have a...