New Internationalist

Chipping Away Jobs

Issue 086

The next industrial revolution may already be underway - without most of us even knowing. This upheaval - courtesy of the silicon chip - will replace not only muscle power, but brain power. Mick McLean looks at the potentially calamitous impact of this new technology on job creation and employment;

Until ten years ago governments in most of the industrialised world believed that mass unemployment had been banished forever. Yet, in the wake of the 1973 oil crisis the economies of the West have suffered unemployment levels of four to eight per cent - unprecedented since the 1930s. At first the problem was blithely brushed aside as a hiccup in the system. Now it is generally agreed that unemployment is not only higher than at any time since the Great Depression, but likely to get worse.

The lack of jobs will be compounded by the labour-saving potential of the newest technological marvel - microelectronics. It is now possible to construct an entire electronic computer on the surface of a tiny chip of silicon. The equivalent of a computer costing about $4.5 million 30 years ago, can now be bought for around $15. Just as the first industrial revolution replaced muscle power by steam, this latest revolution can replace brain power by microelectronic components.

Electronics information technology is a ‘heartland’ technology, with the capacity to handle, transmit and process information efficiently - crucial to the future prospects of the industrialised world. At the same time this new technology, so vital for industrial competitiveness, has enormous potential for doing away with jobs.

During the last decade the impact of microelectronics was minor compared with the shock of the world recession. Nevertheless, in the industries where microcomputers were extensively applied the impact on jobs was considerable.

In telecommunications where electronic telephone exchanges have started to take over from traditional electromechanical exchanges; in car assembly where electronically-controlled robots are used for welding and paint spraying; in warehouses, machine shops, publishing houses and the watch industry, many jobs have been lost.

The most dramatic impact has been in industries where information has been processed using a large number of cogs and gearwheels. In cash registers, for example, the world’s largest manufacturer, NCR, reduced its employment from 37,000 to 18,000 with the changeover to microelectronics in the early 70s. In a new Singer sewing machine one microcomputer replaced 350 mechanical parts, and a Siemens plant in West Berlin cut employment from 1,800 to 800 by switching to the new technology.

Micro electronically-controlled machines have taken over many of the tasks involved in assembling conventional products. At one Volvo car plant in Sweden a recently introduced automated welding line reduced the workforce from 50 to 10. In the manufacture of television sets one automatic machine operated by 11 people can assemble 72,000 components per hour, compared with the manual rate of 300 per hour.

More important is the potential impact of the new technology on jobs in the ,service sector’. These are jobs which do not directly produce goods but provide necessary services - teachers, nurses, telephone operators, office workers and dozens of others. So far the impact of automation on service jobs has been slight. It’s affected mostly those in large companies concerned with the storage and processing of routine numerical information, like weekly payrolls The arrival of cheap microcomputers will have far-reaching consequences for office work, printing and publishing, telecommunications and for the postal services.

Despite a rash of activity and discussion, particularly amongst trade unionists, very little progress has been made in actually understanding what impact the new technology will have on the number and nature of available jobs.

Only one point has been generally accepted: if individual countries do not keep up with the international race in the use of microelectronics, they risk becoming uncompetitive and losing their share of world trade. Ironically, even more jobs could be lost by not using the new technology than by its introduction.

The optimists in this debate, like the ‘Think Tank’ attached to the British Cabinet Office, argue that new technoloies will also create new products, new industries and new jobs. Products like home video-tape recorders and personal computers would have been P unthinkable before the advent of the microprocessor. Even the optimists are forced to admit, however, that employment created in the manufacture of these new goods is unlikely to outweigh potential job losses. Debate still rages about the future of the service sector. Estimates of unemployment in services have varied. The cataclysmic view of Clive Jenkins, General Secretary of one of Britain’s fastest growing ‘white collar’ unions, is that 3.9 million ‘information workers’ could be unemployed in the UK by 1991. The government ‘Think Tank’ argues that service sector jobs will increase sufficiently to make up for the loss of employment in manufacturing. However, it is extremely difficult to pinpoint exactly what those jobs will be.

Another heated argument concerns the impact new technology will have on jobs which remain. Trade unions tend to view with alarm the possibility that jobs will become polarised. On one side, they predict, there will be a small elite of professionals and managers with highly interesting jobs and stimulating, varied leisure lives. On the other the ‘new’ service sector - a mass of people, either unemployed or doing work with little satisfaction. And in between, no place for those with moderate levels of training or manual skills.

Their fears are borne out by the experience of a German firm, Standard Electric Lorenz. Its changeover to microprocessor-based products reduced the proportion of jobs which required training from 82 to 35 per cent, the ratio of semi-skilled work rose from 15 to 35 per cent and the proportion of highly-qualified jobs increased from 2 to 30 per cent of all employees. There is another possible future. A better world for all from which tedious and boring work has been eliminated, where the working week has shrunk to two or three days and where health services, education, welfare, public transport, housing and entertainment have all expanded so that the boundary between work and leisure virtually ceases to exist.

Both of these extreme futures are equally unlikely. But the forces that could drive us nearer to one or the other are located in the harsh world of politics. The argument about the ultimate impact of the microelectronic revolution on jobs, and more importantly, what to do about it are now taking place in the political arena. European trade unions are insisting the new technology be introduced only after full discussions with workers. Their goals are to ensure:

  • that workers laid-off are properly compensated.
  • that those who keep their jobs receive higher pay for increases in productivity.
  • On a wider scale, the same unions and parties on the left are pressing governments to expand schemes for training and retraining. They also want increased spending in areas which create the most jobs like health, welfare and education. Finally, they want to encourage job-sharing and a shorter work week. At the same time most of the governments of the industrialised world are cutting back on public spending in social services while refusing to intervene in industry or legislate on conditions of work. Their cure for the economic recession is to allow business to get on with the job. For firms to compete, they say, we must adopt the new technology quickly and simply, without tedious negotiation and the enormous expense of retraining. Let industry create the prosperity, they say, and then we can see about dividing up the benefits. The future of work in the industrialised countries rests far more on this political struggle than on technology itself.

    Making Silicon Chips

    Photo: Mullard Ltd
    A magnified close-up of a silicon chip circuit being threaded through the eye of a needle. Photo: Mullard Ltd

    In just 30 years scientists and engineers have succeeded in reducing a roomful of electronic gadgetry to a single chip of silicon half the size of a small fingernail. That's roughly the jump from the dinosaur-like computers produced after World War II to today's wafer-thin pocket calculators that sell for as little as $15. The revolution in microelectronics began when Californian scientists discovered that 'integrated circuits' bringing together as many as 100,000 transistors and capacitors could be built on a single silicon chip that had previously held only one transistor.

    In what's now known as Silicon Valley in northern California complicated, multi-layered patterns are designed for each integrated circuit. The patterns, which may be up to 60 inches square, are then photographically reduced until virtually invisible. Transferring these patterns to silicon is the next step. What emerges after being doped with acids, and powerful gases and baked in 9000F. ovens are silicon wafers two to four inches across. The scene then switches to Southeast Asia where women in dozens of plants in Malaysia, Korea, Indonesia and elsewhere carve the wafers into as many as 500 separate chips which are then bonded to 'circuit boards'. To do this an assembler squints through a microscope for seven to nine hours a day bonding each chip with as many, as 50 gold threads as fine as human hair. These chips are then baked in 600-1,060OF ovens, each sealed in a plastic or ceramic coating. Testers check the components by dipping them in chemicals and applying electric currents to the circuits. The assembled 'microprocessor' is then re-exported to the company that originally made the chips, where it will be used in an enormous variety of products from televisions and pocket calculators to sophisticated communications and computer equipment.

    Mick McLean is an editor with the London based Economic Times.

    Photo: Clive Offley
    'Handbuilt by robots' this automobile billboard proudly boasts. But what of the workers replaced? Miniature electronic circuit on minute chips of silicon may herald a second industrial revolution. But with fully automated assembly lines less than a decade away the impact of the new technology on jobs and the nature of work is still unresolved. Photo: Clive Offley

    This first appeared in our award-winning magazine - to read more, subscribe from just £7

    Comments on Chipping Away Jobs

    Leave your comment