Class+Notes+7

Work and Wealth 1. Automation reduces the price of goods, increasing the real income of the people who buy those goods. With a higher real income, people can use the extra money to buy other things. Hence automation increases the standard of living. However, automation puts some people out of work. They must go through unemployment, and perhaps retraining, before getting another job. People who are too old may be unable to find another job after being displaced by a machine. 2. There is evidence that automation eliminates jobs. More than 43 million manufacturing jobs disappeared in the United States between 1979 and 1994. Spreadsheets and other software packages are reducing the need for accountants and bookkeepers. A large number of white-collar, middle-management jobs were eliminated in 1991–1996. Most of these people had at least some college education. Only 35 percent of these people were able to find new jobs that paid as well. There is also evidence that automation creates more jobs than it destroys. The total number of manufacturing jobs in the world is increasing, not decreasing. Two studies commissioned by the International Labor Office concluded that automation does not result in job losses. Total information-technology-related employment in California increased between 1990 and 2002. 3. The work week hasn’t gotten shorter because the increase in productivity has been used to improve the average standard of living. Another reason is that people are aware that layoffs have happened and can happen again. This knowledge is a strong incentive for people to work harder so they won’t be part of the next layoff. 4. Information technology can lead to changes in the structure of an organization by opening up new communication paths. Access to information can lead to a decentralization of decision-making. 5. Telework can improve the environment by reducing pollution caused by automobiles driven by commuters. 6. Teleworkers fret about being less visible, because they do not want to be forgotten when it’s time for raises or promotions. 7. Proponents of globalization say it helps workers in developing countries in several ways. Globalization increases competition and lowers prices. That improves the purchasing power of everyone, raising the global standard of living. Globalization gives people in developing countries access to jobs. When they gain employment, their prosperity increases. Every example in the 20th century of a poor country becoming more prosperous has been

the result of that country producing goods for the world market, rather than trying for self-sufficiency. Prosperity reduces the chance of countries going to war. Opponents of globalization say it hurts workers in developing countries by forcing them to compete with subsidized American agribusinesses. Mexican farmers who cannot compete with these prices are driven out of business. Most of them cannot find jobs in Mexico and end up immigrating to the United States. 8. Pippa Norris says the digital divide has two dimensions. The global divide refers to the disparity in Internet access between more industrialized nations and less industrialized nations. The social divide refers to the difference in access between the rich and poor within a particular country. 9. Mark Warschauer says the term “digital divide” promotes the idea that the difference between the “haves” and the “have nots” is simply a question of access. In reality, it also depends on the underlying social systems. Second, it implies that there is simple binary split, when in actuality it is more like a continuum. Third, it implies a lack of access will lead to a less advantaged position in society. But there is no simple causality. Each factor affects the other. 10. One reason why the percentage of low-income U.S. families sending children to four-year public colleges has dropped in the past three decades is that the cost of a college education has risen much more rapidly than the average family income.