Sun, Jan 27, 2013 - Page 9 News List

Recession and technology killing off middle-class jobs

Entire employment categories are beginning to disappear faster than labor economists had believed as computer software, robots and other devices become more sophisticated and powerful — and millions of more jobs will follow suit

By Bernard Condon and Paul Wiseman  /  AP, NEW YORK

Check out your groceries or drugstore purchases using a kiosk? 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 e-mail 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 Massachusetts Institute of Technology, one of the first to document technology’s role in cutting jobs. “But if you lose your job, that is slim compensation.”

Even the most commonplace technologies — take, say, e-mail — 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 US 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 information-technology experts helping with computer crashes.

“The effect of [technology] on white-collar jobs is huge, but it is not obvious,” McAfee says.

Companies “do not put out a press release saying we are not hiring again because of machines,” he says.

What hope is there for the future? Historically, new companies and new industries have been the incubator of new jobs. Start-up companies no more than five years old are big sources of new jobs in developed economies. In the US, they accounted for 99 percent of new private sector jobs in 2005, according to a study by the University of Maryland’s John Haltiwanger and two other economists.

However, even these companies are hiring fewer people. The average new business employed 4.7 workers when it opened its doors in 2011, down from 7.6 in the 1990s, according to a US Labor Department study released in March last year.

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