Technology and Labor Markets

Jeffrey Lacker

Speech from Federal Reserve Bank of Richmond

Abstract: Labor market developments receive a considerable amount of media coverage. Over the last two years there have been countless stories about the “jobless recovery.” Employment growth following the 2001 recession has been slow compared to previous business cycles, slower in fact than any other recovery since WWII. In fact, only in 2004 did the economy get to something we might consider a normal pace of employment growth for a period of expansion. Many observers see technology as the culprit in sluggish employment growth. By raising productivity, we are told, technology weakens the demand for labor, and allows firms to meet growing demand without adding workers. In the last year or so, there also have been widespread stories about the growing number of jobs lost to imports or outsourcing. Of course, this movement of jobs overseas has been facilitated by technological advances in communication and information processing, so there is a sense in which one can describe these jobs as being lost to technology as well.

Keywords: Technology; Labor markets (search for similar items in EconPapers)
Date: 2005-01-18
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