Technological unemployment risk paper sample

Unemployment is one of the key issues that economist throughout of the ages have tried to shed light on with the aim of solving it. Indeed majority of governments across the world especially those of third world struggle to provide employment opportunities for the youth. Presented below is a technological unemployment risk paper sample.

Technology Replacing Jobs and Employees

Economists argue that technical innovation leads to technological unemployment, a situation that causes the loss of jobs. Consequently, it renders the effort from human beings almost useless in an organization as machines are likely to be more efficient and effective than people. However, experts assert that innovation may lead to improved workers’ abilities as well as increased chances for employment. Although technology plays an important role in the manufacturing sector, it is associated with lasting short-term and long-term negative impacts on the labor market and on the employees which are caused by structural unemployment, changes in compensation plans, increased corporate globalization, and job inequality.

Structural Unemployment

It is evident that automation is the major cause of structural unemployment because it causes a mismatch of workers’ skills level with those required by employers (Vivarelli 7). Notably, technological changes demand that employees undergo further training or to migrate to other roles. Due to the fact that shareholders prefer automation to manual labor, they may not be willing to offer additional training services to the workers. As a result, long-term effects due to technological unemployment may be experienced in the organization. Although researchers demonstrate that technological obsolescence does not occur due to automation, there is evidence to show that advances in technical knowhow through machines leads to short term negative consequences (Rotman 1). For instance, the introduction of digital printing plates has replaced manual typesetters (Mohlala, Joy, Geoff and Xenia 4). Undoubtedly, technology is an enabler in any organization as it improves productivity.  However, it does not require a large number of highly skilled workers. For example, fewer employees are needed when an agricultural firm decides to mechanize its activities (Rifkin 1). Due to increased cases of structural unemployment, workers compensation plans tend to change.

Changes in Compensation Plans

As demand for automation in the business increases, a large number of workers will be willing to work for lower wages as technical jobs will be performed by robots. In fact, the employees who work in highly-paid jobs may be retrenched to pave way for machines. Consequently, their power to bargain will be diminished in dramatic fashion. Due to unfair compensation policies, workers prefer to search for alternative places of work leading to unemployment because they are not absorbed into new positions instantaneously. To digress, Asian countries including China are rapidly adopting automation in manufacturing sectors in order to improve productivity (Vivarelli 6). Notably, the sudden increase in demand for machines is geared towards the elimination of ineffective workers as well as to cut expenses on manual labor. Although economists demonstrate that such advancements may lead to the creation of more jobs, it is clear that short-term effects of automation are inevitable. Additionally, it is not right to argue that technological improvements eliminate the need to pay excessive wages to low-skilled workers because of the existing institutional imperfections in the labor market (Rotman 1). In fact, increased productivity should not be merely linked to automation because organizations depend on people for sober decision making. Instead of introducing technologies that replace workers, it is prudent to install machines that complement their skills (Mohlala et al. 6). For example, computers play an integral function in helping employees to perform daily tasks effectively. To a large extent, changes in compensation plans stems from corporate globalization.

Corporate Globalization

The concept of corporate globalization has been the centre of focus for the last decade. Notably, large manufacturing and retailing firms have branches and subsidiaries in many parts of the world. Although it is generally argued that the presence of international corporations in underdeveloped nations creates employment opportunities, it appears that companies are only interested in making supernormal profits (Rifkin 1). In other words, apart from the growing concerns about over-exploitation of natural resources and mismanagement of capital, multinational firms are associated with escalating cases of replacement of human resources with technology. In essence, the construct of corporate globalization has been criticized because it leads to loss of jobs and unemployment in two major ways. First, it requires managers to introduce western technologies in order to increase the productivity of workers (Mohlala et al. 8). As a result, human labor is rendered useless in the process. Second, large corporations have a higher bargaining power than the local workers, hence, dictate the level of compensation. Admittedly, employees lose jobs in the event of the introduction of new and sophisticated technologies that require advanced skills leading to unemployment. Although supporters of automation argue that it leads to more benefits due to the use of digital tools, there are growing concerns that the skills of a particular profession or its subsets will be embedded on software (Vivarelli 8). In other words, it appears that all aspects of an occupation are likely to be digitized. For example, office technologies have rendered many workers useless in the current market. As a result, it is expected that the widening gap of inequality in the workplace will increase.

Job Inequality

Notably, inequality is likely to occur if technology plays a central role in the polarization of wealth and wages. This way, the middle class individuals would be in tension concerning payments and benefits. In particular, workers who do not have equal access to digital opportunities may be disadvantaged in the long run (World Bank Group 5). In fact, it appears that the job market would favor only tech-savvy individuals who demonstrate outstanding skills in technology. Primarily, this would hamper employment relationships to an extent that majority of the workers, who do not possess technical abilities, would have low bargaining power leading to retrenchments (Mohlala et al. 9).  In fact, there is evidence to show that the labor market is highly polarized due to technological advances. For instance, middle-income level jobs such as administrative support, operators, craft, repair, and fabricators have been diminished in many organizations (Rotman 1). This is primarily because of the shift to the left of the demand curve for such employees. However, economists assert that middle-income jobs increase because of the emerging Small and Medium-Size Businesses (SMEs) and that technology spurs the growth (Vivarelli 4). As a counterargument, many upcoming companies that benefit from automation are in developing nations or in countries that are experiencing a boom of the manufacturing sector such as China. Therefore, it would be more appropriate to compare the impacts of digitizing the workplace with stable and developed states such as the U.S., where labor and wages polarization has been experienced due to automation (World Bank Group 7)


In order to reduce the risk of technological unemployment, the most suitable solution would be banning certain innovations that displace workers who perform duties on routine basis. Primarily, policies should be focused on allowing implementation of new advancements in several phases. As a result, the country would be positioned to assess the impacts of certain innovations in the labor market. In addition, it would be prudent for companies to make welfare payments once they decide to automate the organization. Notably, employees who suffer from technological unemployment do not find new opportunities instantaneously (Vivarelli 8). Therefore, government aid would be necessary as they would not be able to migrate to other professions in the short-term. Finally, there is a need for businesses to re-train the workers once the process of automation begins to avoid replacements and loss of jobs.


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