The New Division of Labor
Book

The New Division of Labor

How Computers are Creating the Next Job Market

Frank Levy and Richard J. Mumane
Princeton UP, 2004
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Editorial Rating

6

Qualities

  • Analytical
  • Eloquent

Recommendation

This excellent short book has implications far beyond its titular subject. Although ostensibly about the effect of computers on labor, it provides a model for thinking in economically rational terms about any kind of innovation that offers lower costs or greater efficiency. In a nutshell, scaremongers tend to exaggerate the threats and underestimate the benefits of such innovations. Some prognosticators, for example, predicted massive unemployment, poverty and social unrest due to employment disruptions stemming from computers. Why? Because computers could do many jobs, especially automated ones, faster and better. Something like the classical economic notion of comparative advantage is at work: computers and people should each do what they are good at. On the other hand, the authors analyze how innovation leaves many low-level, unskilled workers behind, and explain how and why the haves must make reasonable, just provisions for the have-nots. getAbstract believes that any reader who appreciates lucid analysis and clear prose will enjoy this book, and will gain understanding and perspective.

Summary

Fear In 1964, a committee of concerned scientists sent a memo to the U.S. President Lyndon Johnson. The committee included former and future Nobel laureates, such as Linus Pauling and Gunnar Myrdal. The sages warned of a "cybernation revolution," saying that combining computers with automated machinery would lead to widespread and massive unemployment. Why? Because, they said, computers would make human labor unnecessary.

This warning was not wholly fanciful. History confirmed part of the scientists’ prediction. Computers did replace humans in many jobs. But the result has been greater prosperity, not greater misery. The nature of work and the distribution of jobs changed due to four factors:

  • Computers do some jobs better than people.
  • People do some jobs better than computers.
  • Humans who are capable of doing jobs that computers cannot do now command higher pay than humans who are incapable of doing these jobs.
  • People can learn the skills they need to do these jobs, but it takes time and resources.

In 1970, a majority of adult workers in the U.S. had so-called "blue-collar" jobs. Today, blue-collar workers are a shrinking minority...

About the Authors

Frank Levy is the Daniel Rose Professor of Urban Economics at the Massachusetts Institute of Technology. His books include The New Dollars and Dreams: American Incomes and Economic Change. Richard J. Murnane is the Juliana W. and William Foss Thompson Professor of Education and Society at Harvard University and author of Who Will Teach? Policies that Matter. Levy and Murnane co-authored Teaching the New Basic Skills.

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