Technological Innovation and Structural Unemployment

Mark R. Reiff

Chapter Chapter 3 in On Unemployment, 2015, pp 65-92 from Palgrave Macmillan

Abstract: Abstract Once, when I was in China in 1982, I saw a group of hundreds of people— perhaps even thousands—on their knees armed with trowels paving a new multilane highway by hand. Of course, this task could have been done much more efficiently by machine, even in 1982, and presumably even more efficiently now, but such machines were not being used in China at the time, at least not on this project. No doubt this was because labor-intensive methods of construction provided advantages over the more modern capital-intensive methods available at the time. First, under the conditions then prevailing in China, labor-intensive methods were probably much cheaper, assuming that it is meaningful to make such comparative judgments with regard to costs in a centrally planned economy. Second, and for our purposes much more importantly, labor-intensive methods of construction kept people employed who otherwise would not be. For even if paving machines were made in China at the time (while I am sure they are now I doubt they were then) and thus some of those not employed building the highway could have been employed building the machines used to build the highway, there would have been a net loss in employment opportunities, or at least there was reason to be concerned this would be the case, and this made opt- ing for paving machines less attractive regardless of the relative cost. Otherwise, the only way to explain the Chinese decision to employ this labor-intensive method of construction rather than a more efficient capital intensive method is to think the Chinese neither had the money to purchase paving machines back in 1982 nor the resources and expertise required to build these machines themselves.

Keywords: Technological Innovation; Employment Opportunity; Real Wage; European Central Bank; Full Employment (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-55000-2_4

Ordering information: This item can be ordered from
http://www.palgrave.com/9781137550002

DOI: 10.1007/978-1-137-55000-2_4

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().