Machines and jobs

machineA residential community in Bangalore recently bought this street cleaning machine. Tongues wagged and intellectually stimulating discussions ensued. Let me spice-up and present one such conversation to you.

Yadav-Gowda school of economics:

  • We got so many unemployed folks idling around. Machines like this one are a waste, they take jobs away. 5 sweepers may cost you a lot less than burning diesel in the stupid cleaning machine.

Manmohan-Chidambaram school of economics:

  • Don’t think short term to say that this machine took away 5 jobs to create just one (the driver). Think more to realize that this machine has got to be maintained. More cities and communities buy these machines, more of these will get manufactured in our country. All that translates to considerable number of skilled jobs. So in the long run, this machine may take 5 low-skilled jobs away and create similar number of mid-skilled job.

Would you feel surprised if well-educated folks toed the former line? Or do you think “machines taking jobs away” theory does have its valid points?

And BTW, I see some of these government sponsored rural employment guarantee plans (Jawahar Rozgar Yojna of old, and the more current National Rural Employment Guarantee Act) with a similar lens. Do we want our folks to dig canals and trim bushes for ever? I hope not. We got to foster creation of higher-value (mid-skilled is a better phrase) jobs in rural areas.

Yeah, the funny thing is, Manmohan-Chidambaram team created that National Rural Employment Guarantee Act. But I am sure they have got long-term, indirect and better-skilled employment generation plans on mind as well.


12 Responses

  1. saar…
    my observations..
    computers in banks: maha protests. desh roko andolans. bandhs etc.
    caterpillars in construction: yaar do plate pakode aur bolo.

    where is this? palm trees and all?

  2. This is a point with merits and of course demerits. When one makes a keyhole viewpoint on technology taking away jobs, its true. But on the other hand the factor of economical viability and job effectiveness needn’t always side human labour.

  3. chidu school of economics is just great and no problems.

    what about the impact on environment? Who is bothered about the CO2 emissions. Already we are suffering from pollution, green house effect…want to increase it more and more??

    What are the social costs of development…even west is rethinking about its ways and trying to use the old methods. Am not saying lets get back to stone age (maybe that was better) but things need to be controlled.

  4. It should be fairly easy to see that even after taking into consideration the entire supply chain involved in those machines (raw materials, manufacturing, sales, maintenance etc), the machine solution cannot employ as many people as manual solution. Why? Let’s say the mechanical solution does employ as many people as manual solution for cleaning the same area. Now all those jobs involved in mechanical solution are, as you rightly pointed out, mid-to-high skilled whereas manual is all low skill. So presumably the salaries will also be higher in the case of mechanical solution. On top of that, you are using more raw materials (steel for the vehicle, diesel for running it and transporting it etc). So manual solution has X low-skilled labourers plus very little raw material (just broomsticks). If the mechanical solution also employs X people *and* most of them mid-to-high skilled *and* uses costlier raw materials, then your mechanical solution can no longer be cost-effective. The very reason it can be more cost-effective than manual solution is because it does away with employing so many people.

  5. As Mohan points out, in the short run the machine will destroy jobs. However,those jobs are of low value, and hence the workers in those jobs will by necessity be paid small amounts that will not allow them to live in prosperity. The long term solution is to educate the workers so that they can do more valuable work and be paid more.

    The NREGA is to be seen in this light. In the immediate term, it is necessary to provide jobs and develop basic rural infrastructure, and the NREGA(if implemented correctly) can do that. Of course, in the long term, manual labour will need to be replaced by machine labour.

    The NREGA has been criticised for encouraging corruption and for being a waste of money. It is certainly expensive, but can also benefit hundreds of millions of people. It is the first attempt at social security in India. It encourages people too work, instead of being like a dole in Western nations where people on dole/welfare are idle. Of course, it is certainly open to corruption, and at the time of its introduction, was considered by some to become the “mother of all scams”. Recent progress reports(by Transparency International and Jean Dreze) say that corruption, while existing, accounts for only a relatively small percentage of moeny spent on on NREGA. They say that RTI can be used in looking at work logs/muster rolls, reducing the scope for fraud. Of course, this does not mean fraud has been eliminated-corruption is very common in all govt. transactions. However, a good program must not be stopped just because of some chance of fraud. Nobody says that the policies granting tax concessions to industries must be scrapped,even though it can lead to various frauds while reporting taxes. For example, a company claiming tax exemptions for R&D can fake accounts to show that cafeteria equipment is also part of this.

    In the dealings of companies that are sorely interested in making a profit while executing projects, labour and machinery will be used optimally. Large firms like Larsen and Tubro use a lot of heavy equipment on their construction sites. This enables cost savings to be passed on to the buyers of the building.

    PS-Is the locality you are talking about Adarsh Palm Meadows?

  6. Guys, some of you miss the point. It is about doing two things. 1) moving more money around. And 2) employ people more productively (basically higher wages). When I know a machine can clean 10 kms of street a day with 1 person driving it, I know that 10 sweepers cleaning the same stretch was a lot of un-gainful employment. Which of the two will be cheaper is a function of a lot of other things.

    It is like the pizza example. You hand out money to print shops, packaging firms, two wheeler manufacturers, telcos and energy suppliers when you order that expensive pizza. All of these companies in turn buy goods/services from the firm you and your friends work in (software or whatever).

    It is a complicated thing to express, I am no economist. But will try this soon in another comment here ASA I get more time.

  7. I think the focus should on getting quality work done. If machines can do it better then men – no issues let machines do it. I am all for empowering machines so men can sit back and think about newer things.
    So far as compensating men goes – how about giving them shares of the company where machines replaced them.

  8. Me thinks the real news would be when they start to use it :-). It isn’t news right now, its just grist for more discussion on supposed pros and cons! The fact that people feel a need to point out that its taking away jobs… i mean, c’mon! Its just a matter of: you have a job to do, pick the best resources to do it! At least, that’s what I see loudly endorsed in the software industry! We should be making an attempt to follow that same philosophy in other aspects of life too, you know, save a lot of trouble :-).

  9. There’s a very interesting book by Michael Crichton called “State of Fear”, it presents VERY compelling arguments against present-day environmentalists and their approach to conservation. It presents a lot of common sense, as opposed to a lot of the shrill voices of alarm which you see in the media from the Greenpeace lobbies. For instance, quite a lot people talk about how modernization is spoiling the environment, and why its better to go back to the basics, i.e. nature and so on. The counter-argument was very succinct: its a serious problem when people who have no experience of authentic tribal/village/backwater colony life, and who have spent their entire lives in an urban setting, talk about how to go “back to nature” or “maintain the old ways”. The old ways suck. That’s why people pick new ways, or else they’d stay where they are, wouldn’t they?

    And that’s why people will pick a machine that is more efficient at street-cleaning (new way) as opposed to keeping on five poor souls to do the same job (old way).

  10. Scarlet, Neel, the context here is growth and development – create jobs by encouraging spending. If you go by quality and economics, low wage workers may do good enough job to keep the streets clean.

    Off topic but sort of similar note. Cheap and abundant labor, and very high incomes – some of us want this huge range to exist (for us to ‘exploit’) for ever. It can’t.

  11. SB just 2 things

    One is I just dont get how promoting a consumer driven model (if that is what u mean by encouraging spending ) will promote development (albeit it might in the short term create development ) if sustainable development is what we are talking about.

    The other thing is about the book by Crichton- State of confusion is more like it- a mish mash of impressions seeking to debunk the hypotheses of global warming- doesnt make any reasonable counter arguments, paints eco-sensitivity with a black brush and no sir doesnt at all suggest any models of development.

    We can only hope 2007 brings us braver and sensible men

  12. Yes, State of Fear is just pure propaganda to dismiss the facts about climate change. It is not well researched and does not make a coherent point. Micheal Crichton is possibly funded by the fossil fuel industry which has a vested interest in denying the phenomenon of climate change

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