The_Future_of_Employment

of mechanisation, with dictaphones, calculators, mimeo machines, address machines,
and the predecessor of the computer – the keypunch (Beniger, 1986;
Cortada, 2000). Importantly, these office machines reduced the cost of information
processing tasks and increased the demand for the complementary factor –
i.e. educated office workers. Yet the increased supply of educated office workers,
following the high school movement, was associated with a sharp decline
in the wage premium of clerking occupations relative to production workers
(Goldin and Katz, 1995). This was, however, not the result of deskilling technological
change. Clerking workers were indeed relatively educated. Rather, it
was the result of the supply of educated workers outpacing the demand for their
skills, leading educational wage differentials to compress.
While educational wage differentials in the US narrowed from 1915 to 1980
(Goldin and Katz, 2009), both educational wage differentials and overall wage
inequality have increased sharply since the 1980s in a number of countries
(Krueger, 1993; Murphy, et al., 1998; Atkinson, 2008; Goldin and Katz, 2009).
Although there are clearly several variables at work, consensus is broad that
this can be ascribed to an acceleration in capital-skill complementarity, driven
by the adoption of computers and information technology (Krueger, 1993; Autor,
et al., 1998; Bresnahan, et al., 2002). What is commonly referred to as the
Computer Revolution began with the first commercial uses of computers around
1960 and continued through the development of the Internet and e-commerce
in the 1990s. As the cost per computation declined at an annual average of 37
percent between 1945 and 1980 (Nordhaus, 2007), telephone operators were
made redundant, the first industrial robot was introduced by General Motors
in the 1960s, and in the 1970s airline reservations systems led the way in selfservice
technology (Gordon, 2012). During the 1980s and 1990s, computing
costs declined even more rapidly, on average by 64 percent per year, accompanied
by a surge in computational power (Nordhaus, 2007). 13 At the same time,
bar-code scanners and cash machines were spreading across the retail and financial
industries, and the first personal computers were introduced in the early
1980s, with their word processing and spreadsheet functions eliminating copy
typist occupations and allowing repetitive calculations to be automated (Gordon,
2012). This substitution for labour marks a further important reversal.
13 Computer power even increased 18 percent faster on annual basis than predicted by
Moore’s Law, implying a doubling every two years (Nordhaus, 2007).
11