Analyzing the Relationship Between Automation and Unemployment Trends

This essay examines the contentious relationship between automation and unemployment, drawing upon historical and contemporary perspectives. It begins by outlining the Marxist viewpoint, which posits that automation leads to job displacement and social inequality. The essay then delves into the Luddite movement and the banking and agricultural sectors to illustrate how technological advancements have eliminated jobs. It argues that automation can reduce consumer purchasing power and ultimately harm producers. The essay presents the oil and gas industry as a case study, demonstrating how automation in drilling has decreased the need for human labor, even as oil rig numbers recover. The essay concludes that automation disproportionately affects semi-skilled and unskilled workers, potentially widening the gap between the rich and the poor, and thus lending credence to the Marxist perspective on technological unemployment.

Automation leads to unemployment
AUTOMATION LEADS TO UNEMPLOYMENT
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Automation leads to unemployment
Table of Contents
Introduction:....................................................................................................................................3
The relationship between automation and unemployment:.............................................................3
The example of the oil and gas industry:.........................................................................................3
Conclusion:......................................................................................................................................4
Reference:........................................................................................................................................6
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Automation leads to unemployment
Introduction:
The long run debate surrounding the statement ‘automation invites unemployment’ finds Marxist
thinkers in its support who frankly admitted that the inclusion of machines in the production unit
endangers the lives of laborers by creating an uncertainty regarding employment and thus creates
social inequality. The Marxists vehemently resisted the introduction of computers in the public
sector and raised their voice of support in favor of the unskilled labors in many developing
nations (Bessen, 2016). The adoption of latest technologies in the workplace and the subsequent
unemployment of the unorganized sector of employees have always been rejected by Marx’s
notion of classless society. Now it is necessary to judge whether the claim of the Marxist
believers has any substance in it or not.
The relationship between automation and unemployment:
The Luddites in the early era of the Industrial Revolution have opposed the use of machinery for
the textile industry in apprehension of job loss. There have been evidences that technological
advancement annihilated several jobs. For example, the banking sector no more recruits clerical
staffs to maintain ledgers for every single transaction (Danaher, 2017). Even the agricultural
sector cannot deny the implied effects of technical innovation in the form of unemployment for
human laborers. Several producers are now leaning towards automation of the production
process by citing the reason that it will earn more profit for them by doubling the existing
productivity. However, they do not understand the simple fact that in order to earn additional
profit, the producers need to have a market to sell their products (Musiał, 2018). If automation
invites mass unemployment, there will be no one in the market to whom the producers will sell.
Unemployment will also invite less disposable income at hand which reduces purchase power of
individuals. The reducing purchase power will undoubtedly shatter the producers’ dream of
earning additional profit.
The example of the oil and gas industry:
The below chart clearly indicates that the declining number of oil rigs is directly proportionate to
falling fuel prices (Frude, 2019). However, with the gradual recovery in the numbers of oil rigs,
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Automation leads to unemployment
the employees who have lost their jobs are not rehired. This is a devastating trend envisaged
from the chart and its consequence is dire.
Figure 1: Rig count trend and its effect on employment in the oil and gas sector
(Source: Frude, 2019)
Due the introduction of automation in the drilling process, the once laborious task became an
easier activity and it requires minimum skilled workforce to accomplish (Danaher, 2017). It
means that in earlier times the same drilling activities required 20 employees, whereas now only
5 men can accomplish the task with the help of the latest machineries. During the global
downturn, as many as 440,000 oil and gas sector employees had to lose their jobs. Whereas in
today’s highly automated working process, only 220,000 would get an opportunity to bring their
jobs back, for the rest, there is no ray of hope even if the said industry is performing well and the
numbers of oil rigs are soaring high (Frude, 2019). Another noticeable area from this chart is that
within a time gap of 2 years only, this drastic change in the field of employment occurred. This
again reestablishes the claim that technological unemployment does exist and it exists in such a
huge form.
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Automation leads to unemployment
Conclusion:
The concept of technological unemployment brings to the fore the notion that automation brings
an adverse situation for the semi and unskilled workforce who anyway will not get an
opportunity to get placed in any other industry sector by the sheer application of their skills and
competencies. This will surely expand the gap the rich and the poor and social equality will
certainly be at stake. The claim of the Marxist believers now seems to have substance in it.
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Automation leads to unemployment
Reference:
Bessen, J.E., 2016. How computer automation affects occupations: Technology, jobs, and
skills. Boston Univ. school of law, law and economics research paper, (15-49).
Danaher, J., 2017. Building a Post-work Utopia: Technological Unemployment, Life Extension,
and the Future of Human Flourishing. In Surviving the Machine Age (pp. 63-82). Palgrave
Macmillan, Cham.
Frude, N., 2019. Technological Unemployment and Psychological Well-being—Curse or
Benefit?. In Education and Technological Unemployment (pp. 95-113). Springer, Singapore.
Musiał, M., 2018. Automation and the Meaning of Life: A Sense of Achievement and Being
with others. Envisioning Robots in Society—Politics, Power, and Public Space: Proceedings to
Robophilosophy, pp.251-258.
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