What happens when a computer does what you do — only better?

Compumation”
Robert Beanland of Putnam County, New York, spent the last seven years of his 20-year career at a publishing company waiting for the ax to fall. With advances in software technology, the computers in Beanland’s office seemed to be getting smarter and faster.

Over time, the computers began to take over the work that he and his fellow statistical analysts did -- processing information, crunching the numbers, composing spreadsheets. And when the computers had a problem — they’d be down for at most an hour — they never called in sick. At first, Beanland’s department had six employees, then five, four, then two. He and the other survivor finally got pink slips about two years ago. Beanland, 40, now cares for his eight-month-old son while his wife works full time. “I stay home because we don’t want to put our son in day care,” he says. “But I know if I had to find a job in my field right now, it would be hard.”

Beanland isn’t alone. He’s a victim of a trend you might call “compumation.” Compumation is like automation, but instead of industrial machinery that’s taking away your job, it’s digital technology. Between 1995 and 2002, the United States lost 11 percent of its manufacturing jobs; now high-speed computer technology is having a similar impact on the service sector.

According to a report in USA Today, it takes only nine workers to produce what ten did in March 2001. Most of the 100 largest companies have raised productivity largely by eliminating jobs. More and more, technology is replacing white-collar office workers like clerks and secretaries as well as a slew of well-paying blue-collar jobs. The Home Depot, for example, has moved many cashiers to the sales floor thanks to self-checkout counters, which it has in nearly half of its U.S. stores.

Using computers instead of people is a trend that’s here to stay. Why use a travel agent when you can book the cheapest flights online? Why hire an accountant to file your taxes when software practically does it for you? Why have tollbooth collectors when electronic passes are cheaper and faster? Why employ customer-service representatives or telephone operators when a digitized phone system does the trick?

One reason for this trend is productivity gains. When productivity rises, the economy picks up. In the past, this has usually meant more jobs — not fewer — and higher wages. But not everyone believes this will continue. A report in BusinessWeek noted that a one- percentage-point increase in annual productivity growth costs as many as 1.3 million jobs. Some fear that as fast as new jobs are created, new technology will be invented to replace them.

If a job requires following a routine set of rules, compumation could deliver a pink slip: At greatest risk are jobs that are easy to mimic — or even refashion — with computer technology, say MIT economist Frank Levy and Harvard economist Richard J. Murnane, co-authors of The New Division of Labor: How computers are creating the next job market.

Harsh Reality
One startling example: In 1972, telecommunications companies and other businesses employed 394,000 telephone operators. Today, that number is 52,000, an 87 percent job loss. Another casualty are clerks who process loan applications. They’re easily replaced by software that does the routine math, and so their ranks are expected to fall by 24,000 over the next several years. And, with self-serve gas stations, ATMs and e-tail sites, productivity is on the rise throughout a broad array of service industries. That means the need for new workers is on the decline. In the near future, even the trip to work will be revolutionized by compumation: Certain New York City subway lines will be driven by computers instead of train operators.

Offshoring jobs to countries where labor is cheaper also increases productivity. High-tech companies began sending software-coding jobs to India in the early 1990s. Next, some data-entry jobs were exported. Now, employers are hiring clerical, call-center, computer-programming, software-engineering, network design and Web-development workers overseas. According to projections from Forrester Research, more than three million white-collar jobs and over $130 billion in wages will move outside the United States in the next 11 years. But at least offshored jobs still exist, unlike jobs replaced by computers. Richard W. Samson, founder of EraNova Institute, a think tank in Mountain Lakes, New Jersey, says no one from any country can work as cheaply as a chip.

Offshoring is a minor bump compared with the effects of compumation, which has the potential to eradicate low-skill, living-wage jobs in any field. Some 315,000 service-sector jobs were offshored in 2003, and another 540,000 are projected to be offshored this year, according to Forrester Research. Those are big numbers, but they’re less than one percent of the 138.3 million Americans in the work force. Even if we could bring offshored jobs back to the United States through tax incentives or legislation, nothing can bring back the jobs that are increasingly becoming obsolete.

Still, economists maintain that productivity is the key to economic growth and that economic growth always results in more jobs and more opportunities. When Henry Ford introduced the assembly line in order to manufacture cars, the horse-drawn-carriage industry was doomed. But the boom in the auto industry, and the jobs that went with it, is undisputed.

Even with jobs disappearing due to compumation, experts agree that a digital future is not necessarily a bad thing. For example, the convenience and savings many businesses — and customers — accrue from labor-saving technology is good not just for that business, but for the U.S. economy as a whole. And very few economists think that mass unemployment is on the horizon. “That would happen only if the amount of work in our economy is fixed, and history shows us that’s never true,” says Frank Levy of MIT. After all, who ever heard of cell-phone salesmen or Web designers 20 years ago?

But even the economic optimists agree that this time around, the patterns are different. No longer can a high school graduate expect to move from one rote job to another. Ravi Aron, an assistant professor at the Wharton School of the University of Pennsylvania, says, “The U.S. economy has gone from agriculture to manufacturing to service. Now we’re transitioning to an economy that values expertise and specialization.”

“We’re seeing a hollowing-out of the job market, with fewer jobs in the middle,” says Levy. “There are good jobs for people who’ve continued their education and McJobs for high school graduates.” But the better-paying jobs are more competitive than ever, and the picture for lower-skilled, less-educated workers looks grim.

Kevin Friary, president of Local 273 of the Utility Workers Union of America in Brockton, Massachusetts, has seen the impact of compumation firsthand. “It used to take more than 20 full-time workers to read roughly 140,000 gas meters in the Brockton region,” he says. “With new technology, that work is now done by just one person.”

To complicate the job picture even further, the United States is facing a demographic conundrum: There are 78 million baby boomers, many of whom are just a few years away from retirement age. Yet most can neither afford to retire nor even want to leave the work force.

That’s not the only challenge the economy will face: Consider the prospects of the largest generation in U.S. history, born around 1980. Yes, there are 78 million “millennials,” who are just now entering the job market. Can the new economy support both groups? With good economic planning, including strategies to distribute goods and services to global markets, there could be plenty of new jobs to go around.

But for Robert Beanland, leaving behind his career still stings. After devoting himself to statistical analysis for 20 years, the harsh reality of compumation has set in: “I’ll never find a job doing the same kind of work again.”

Source:Reader’s Digest