Otis White
Otis White

Fellowship Title:

Dark Side of the Chip

Otis White
November 16, 1983

Fellowship Year

Monday, July 26, 1976 is a day printers at the Miami Herald remember the way other people remember the day President Kennedy was shot or the day the Japanese bombed Pearl Harbor. The biggest headline in the paper that morning reported that a cease-fire in Beirut had broken down. But for the 225 or, so linotype operators and compositors, it was not the news, but the newspaper itself that burned July 26, 1976 into their memories. That was the day the newspaper’s managers unplugged the last of the Herald’s linotype machines, cleared the composing room floor of its ancient metal page forms and banks of lead type and began printing the newspaper, from front page to classified ads, by computer.

Seldom has a basic industrial change come so swiftly or completely. One day the front page was being set on thundering linotype machines, the metal type so heavy it had to be wheeled about on steel rolling tables, while the noise of the machines and the thick smell of lead mixed freely around the printers. Twenty-four hours later the same printers were staring at a small electronic printing machine as it quietly rolled out columns of type on glossy strips of paper. The electronically produced type was so light, a man or woman could gather up all the type for the front page in one hand and hold a cup of coffee in the other. To the printers, the difference could not have been greater if a hurricane had swept across Biscayne Bay and roared through the composing room.

It wasn’t a hurricane, but what blew through the Miami Herald that hot summer day was, in its way, as powerful as one. It was the headwind of an Industrial Revolution, an upheaval in business and work that is the rough economic equivalent of a hurricane. This economic maelstrom touched down in the newspaper industry early on. In the next 10 years, many observers believe, it will rage through the rest of American industry like a gale at sea. Before it is done, sometime after the turn of the century, this latest Industrial Revolution–actually as much a revolution in commerce and finance and services as in manufacturing–will have changed the way virtually everyone makes his living. Sometimes the changes will be for better, sometimes they will not.

At the eye of this gathering economic storm is a new basic technology: cheap computer power. To find another technology with as much potential to change business and work, you would have to go back to earlier Industrial Revolutions, like the ones that centered around improvements in steam power or alternating-current electricity or the internal combustion engine. Each of those innovations upset the fundamental economics of labor and capital of their time, leveling many established businesses, rejuvenating others and creating huge new enterprises in areas where the human imagination had never before strayed.

The Industrial Revolutions of the 19th and early 20th centuries made millionaires of immigrants like Andrew Carnegie and paupers of the landed gentry who could not adapt. They created the American middle class. They also created staggering human hardship. The vast slums of many big Northern cities, for instance, can be traced to a single technological event: the mechanization of farming in the South during the 1920s, a change in basic technology that drove millions of poor, uneducated tenant farmers north to find work.

Cheap computer power is, likewise, molding this era in its own, silicon-chip image. It is making products smaller, from downsized cars to stereo receivers the size of a textbook. It is making products smarter. Computer-controlled refrigerators hoard energy like a miser and signal you when they need cleaning. But more profoundly, cheap computer power is changing work. Often the changes are pleasant, as in the case of a small-business owner who uses a personal computer to untangle his paperwork. But, as in other Industrial Revolutions, this one is causing pain as well.

In the first months after the Miami Herald’s conversion to electronic typesetting, frustration and anger were as thick in the composing room as the smell of lead had been. “It was hard,” remembers Earl Killingsworth, who had been a printer for 16 years when the Herald brought in the computers. “I thought I was going to be a printer the rest of my life.” Killingsworth is, in fact, a success story among printers. After spending some trying years in other departments after the conversion, he was promoted to newsprint coordinator, in charge of buying all the paper on which the newspaper is printed. He wears a tie to work now and shares a small office a few steps off the composing room floor. Still, he says, as he looks about the composing room, now vastly different from his days there, “It was difficult for everybody.”

It was difficult because the work changed drastically with electronic typesetting. Where compositors were highly skilled, highly paid metalworkers with apprentice programs that lasted five years, they were now paste-up artists, a skill the average person could master in six months. Even more alarming for the printers, there were too many of them now. In the last days of the metal-type era, the Herald had about 225 printers. Once it was converted to electronic typesetting, the newspaper needed only about 120.

The company did not fire any of its nonunion printers. But it gave them two hard choices: Stay and face the likelihood of being shuffled into different departments, or leave the newspaper and get two weeks’ severance pay for every year of service. The newspaper cautioned that if they stayed and were assigned to less well-paying jobs, as was likely, their wages would be frozen until the pay of those around them caught up.

The decision–go or stay–was an agonizing one for the printers, many of whom had spent 20 years or more perfecting their craft, only to see it wiped out by the press of a few buttons on a computer keyboard. Either choice, they knew, would mean their working lives would never be the same. One of the former printers who stayed and was eventually shifted to another blue-collar job, explained why he chose to stay. “This place was always good to me, the money and all,” he said. “And it was too late in life to start all over again. I was in my 40s.” He shook his head. “I went through a mid-life crisis.”

Many other workers will be facing mid-life crises as cheap computer power courses through the workplace, changing most jobs, creating some new ones and eliminating others. How many jobs will be created and how many destroyed? That may be impossible to say with certainty. Congress’ Office of Technology Assessment, which was set up to make those kinds of judgments, has been studying the effects of computer automation for better than a year and a half. Its final report is due this winter. Last March, OTA released a “technical memorandum” on its research efforts thus far. A good part of the 105-page, scholarly document was given over to listing why every known way of estimating the impact of new technologies was badly flawed.

How Computer Automation Affected the Printers

Total Membership in the International Typographical Union, 1962-82.

1962 113,703
1964 113,792
1966 113,616
1968 114,266
1970 112,001
1972 107,383
1974 101,289
1976 92,437
1978 84,938
1980 81,329
1982 77,148
Source: International Typographical Union
Electronic typesetting radically changed the printers’ craft and decimated their ranks, a phenomenon that can be seen in the membership rolls of the ITU, which represents most unionized printers. From the ITU’s historic peak in 1968, membership has declined by half.

 Other published estimates of what microelectronics is doing to the marketplace aren’t of much help either. They are either too limited–predictions of how many factory workers will be laid off to make way for robots–or too vague to be of much use. A study by SRI International of technology’s effect on the California economy estimated, for instance, that California’s high-tech employment could be increased by as much as 50 percent during the 1980s, adding about 350,000 jobs. But at the same time, the study warned that California’s two million manufacturing jobs would probably see a “significant decline” in number after 1990 because of computer automation. A study of the future of work issued last summer by the AFL-CIO concluded that the United States faced a “labor surplus” of between four million and six million workers through the rest of this decade, at least in part because of computer automation. Said the report: “it is clear that advancing technology brings–in addition to its benefits–social and economic costs…”

In truth, counting the numbers of jobs added or lost because of cheap computer power may be futile. The spread of microelectronics is already too great to allow for such neat bookkeeping. What makes that doubly remarkable is the fact that the era of truly cheap computers began just 12 years ago, when the microprocessor–the computer-on-a-chip–was developed. Since then, microelectronics has gone everywhere, from enlivening wristwatches to imbuing machine tools with intelligence. Even more astonishing has been the drop in computer prices. Entire computer systems are cheap enough now that teen-agers get them as Christmas presents in place of stereos or 10speed bicycles. Indeed, the cost of electronic calculation is cut roughly in half every two and a half years. At the same time, the number of computers is growing so rapidly that one forecasting group, International Data Corp., estimates the sum of all electronic processing power available to the industrialized world doubles every two years.

Predicting how many jobs this initial tidal wave of technology will add or subtract in the future would be like watching the first electric lines being strung up in New York 100 years ago and trying to imagine how alternating-current electricity might ultimately affect work. For every direct change you might have predicted, there have been perhaps a hundred ways electricity has indirectly transformed work in offices and factories. So it is with computers.

Some of the indirect effects of computers can be seen in the automobile industry, where the best estimate is that 100,000 jobs have been lost permanently, even if the industry should return to boom times. There are a half-dozen reasons why those jobs are gone, some related to the smaller size of cars, some to more efficient production methods and better control of inventory-and some to the flood of robots and other computer devices into the plants. But at some point, all those changes hinge on electronics. Without computers, for instance, the auto companies could not have made their cars as small as they have or completed the downsizing as quickly. And without computers, changing the production systems and inventory control would have been difficult if not impossible.

Almost without notice, electronics has become as important to auto-making as the assembly line. Indeed, the world’s largest manufacturer of digital computers today is none other than General Motors, which peppers its cars with electronic gadgets.

So pervasive has electronics become that just keeping the auto industry’s skilled workers up-to-date on the computer systems they must maintain has taken on Herculean proportions. At General Motors Assembly Division, management has turned to–what else?–more computers for help. GMAD uses a nationwide computer teaching system now to turn its thousands of electricians into electronics repairmen.

The enormity of the change in technologies dawned on auto industry managers only in the last few years, says Vincent C. Rugnetta, an official who is involved in the massive effort to retrain skilled workers at GMAD. It leaves people in the industry grasping for comparisons. “Any technological advances we’ve made in the past were just small steps,” Rugnetta says of the flood of computer technology. “This is like going to the moon.”

It may be a waste of time to count the number of jobs microelectronics will ultimately create or destroy, but cheap computer power is sculpting some fundamental changes in work. Some of those changes are becoming apparent. In high-wage industries, for instance, cheap computers are being used to reduce certain kinds of labor. The Miami Herald reduced its need for printers by half. Phone companies have done the same with operators. At Southern Bell Telephone Co., which serves four Southeastern states, operators accounted for 27 percent of the company’s workforce in 1968. Today, after massive computer automation, operators make up just 9 percent. The next large group of workers to face such a reduction in numbers may be bank tellers. According to a survey taken last year, bank executives expect automated teller machines to replace one of every six human tellers in the next three years.

Some industries have used computers to dramatically curtail their need for all kinds of labor. Retailing is one of those industries. In the late 1970s, retailers snapped up electronic labor-saving devices, such as computer-driven cash registers and inventory calculators, with the fervor of shoppers in the first hours of a white sale. The result: a startling reduction in the number of clerks and cashiers being hired. From 1973 to 1978, retailers added more than two million employees, or an 18 percent increase in their work force. But in the five years since then, they have added just 806,000 more workers, a paltry 8 percent growth in employment.

Cheap computers do cause jobs to be created, of course, but they tend to be at either the top of the wage spectrum or at the bottom. The jobs at the middle tend to be the ones that are eliminated. That is one reason the Bureau of Labor Statistics believes the number of professional and technical workers–computer programmers, engineers, lawyers and doctors–will be one of the fastest growing labor sectors in the 1980s. The BLS predicts their number will rise by 22 percent. At the same time, the bureau predicts the number of service workers, usually lower-paid workers, like fast-food employees, janitors and nurses’ aides, will increase by almost 25 percent. By contrast, blue-collar positions like operatives and laborers, many of whom are well-paid factory workers, are expected to grow by just 16 percent in this decade.

Among the groups that will suffer as cheap computer power transforms the work place are the poor. The poor have always suffered, of course, but the latest Industrial Revolution will punish them even more. It will do that by making the road out of poverty more torturous.

In the past, one of the surest paths from the inner city or the piney woods was through a factory job. In the 1920s, when mechanized farming uprooted millions of southern farmers, many went straight to work in Henry Ford’s auto plants at $5 a day, a princely salary at the time for unskilled labor. Auto work still pays a princely salary for unskilled labor, except now it is as much as $23 an hour, including benefits, easily enough to pull a man or woman out of the inner city and into the suburbs in one generation.

Where the Jobs Are

Percent of Nonagricultural Employment by Industry

Goods Producing 1950 1960 1970 1980 1982
Mining 2 1 1 1 1
Construction 5 5 5 5 4
Manufacturing 34 32 27 22 20
Total 41 38 33 28 25
Service Producing 1950 1960 1970 1980 1982
Transportation, Utilities, etc. 9 7 6 6 6
Trade 21 21 21 22 23
Finance, Etc. 4 5 5 6 6
Services 12 14 16 20 22
Government 13 15 18 18 18
Total 59 62 66 72 75
Source: Midwest Research Institute
Work in America is moving away from the factory into the office. Cheap computer power will speed up that process.

 Factory jobs, though, have been declining as a percentage of the total work force for decades. Microelectronics will hasten that decline because manufacturers are turning to computer automation to reduce their labor costs so they can compete with foreign companies in building cars and forging steel and making textiles. Hardly anyone, for instance expects the automobile companies to hire ever again large numbers of low-skilled workers. Explains Fred G. Haubold, director of labor economics, wage and international labor relations administration at General Motors: “We just can’t afford $23-an-hour unskilled labor.”

That decline in factory labor is devastating among the low-income, poorly educated workers who once found decent jobs tending a machine or tightening bolts along an assembly line. Just how devastating can be seen among the poor in New York, where the number of manufacturing jobs has been cut in half since the late 1940s. The latest recession alone took 43,000 factory jobs out of the city’s economy. One result is a staggering unemployment rate among low-income young people. For five of the past seven years, the unemployment rate there among teenagers who are looking for work has averaged over 30 percent. That is a third higher than the national average. Among black teenagers, the situation is worse. Only one in 10 black teenagers holds either a part-time of full-time job. Nationally, about two of 10 black teenagers work.

Some observers believe the job opportunities for low-income young people are the worst they have been in the city’s history, and one labor researcher called New York’s unemployed teenagers “a lost generation.”

What makes the New York situation so ironic–and so prophetic for the rest of the nation–is that the overall unemployment rate has actually declined there since the mid-1970s, indicating that the changes in labor demand are benefiting some groups tremendously even as others suffer. New York has a service economy, where the vast majority of jobs are found in such industries as finance, communications, entertainment, trade and general services. Those are industries where undereducated people–that is, people without a college education–are not paid well, if they are hired at all. Cheap computer power is moving the work force in the rest of the country in the same direction as New York.

The changes thus far are merely prologue, the first rustlings of the technology hurricane that is coming. Offices, where most of America works, have been touched only lightly by computer technology, for instance. There is now only one electronic keyboard device for every three white-collar workers. By 1987, International Data Corp. believes, the ratio will be one-to-one.

The Decline of Telephone Operators

Operators as a Percent of Total Company Employees, Southern Bell Telephone Co.

1685 26.5
1969 25.8
1970 24.6
1971 24.1
1972 22.3
1973 21.0
1974 19.6
1975 17.4
1976 15.9
1977 13.9
1978 12.9
1979 12.1
1980 11.4
1981 11.0
1982 10.6
*1983 9.3

*As of June 30, 1983

Source: Southern Bell Telephone Co.

Cheap computers are being used to reduce certain kinds of labor in high-wage industries. At Southern Bell Telephone Co., operators accounted for 27 percent of the company’s workforce in 1968. Today, after massive computer automation, operators make up just 9 percent.

 Design Revolution

Even in newspapers, where computers have set the entire production process on its head, the technology revolution is not done. Most newspapers bought their computer systems in the early or mid-1970s, before microprocessors slashed the cost of computing to a fraction of its former price and vastly increased the power of computers. Now, places like the Miami Herald are installing their second-and third-generation systems. What is looming on the immediate horizon for newspapers is a breathtaking system of computer page design called pagination, which will allow an editor, sitting at a computer screen, to design an entire newspaper page by himself. It will do away with all the glossy strips of paper that now roll out of electronic printing machines in the Herald’s composing room. It will also do away with most of the remaining 120 printers’ jobs.

Johnny Hoover, a former composing-room supervisor, now a manager in the quality assurance department, was thinking about pagination recently as he looked across the Herald’s composing room. Pagination is, he said, anywhere from two to eight years away for the Herald. But when it comes, he went on, the paper will need just 35 or so people in its composing room, mostly to monitor the equipment and do some kinds of processing work.

And what will happen to the printers when pagination arrives? Hoover looked at the men and women carefully pasting down stories at their work stations around the composing room. “We’ll be offering these folks out here two weeks’ separation pay for every year they’ve been here,” he said. “Just like we did before.”

©1984 Otis White

Otis White, reporter on leave from Florida Trend magazine, is investigating how computers are changing work.