This is the first in a three-part series on the loss of middle-class jobs in the wake of the Great Recession, and the role of technology.
Webb Wheel Products makes parts for truck brakes, which involves plenty of repetitive work. Its newest employee is the Doosan V550M, and it's a marvel.
It can drill holes on both sides of a 130-pound brake drum without missing a beat, and it doesn't take vacations or “complain about anything,” said Dwayne Ricketts, president of the Cullman, Ala., company.
Thanks to computerized machines, Webb Wheel hasn't added a factory worker in three years, though it's making 300,000 more drums annually, a 25 percent increase.
“Everyone is waiting for the unemployment rate to drop, but I don't know if it will much,” Ricketts said. “Companies in the recession learned to be more efficient, and they're not going to go back.”
Five years after the start of the Great Recession, the toll is clear: Millions of middle-class jobs have been lost in developed countries the world over.
And the situation is even worse than it appears: Most of the jobs will never return, and millions more are likely to vanish as well, say experts who study the labor market.
What's more, these jobs aren't just being lost to China and other developing countries, and they aren't all factory work. Increasingly, jobs are disappearing in the service sector, home to two-thirds of all workers.
They're being obliterated by technology.
Year after year, the software that runs computers and other machines and devices becomes more sophisticated and powerful and capable of doing more efficiently tasks that humans have always done.
“The jobs that are going away aren't coming back,” said Andrew McAfee, principal research scientist at the Center for Digital Business at the Massachusetts Institute of Technology and co-author of “Race Against the Machine.” “I have never seen a period where computers demonstrated as many skills and abilities as they have over the past seven years.”
The Hackett Group, a consultant on back-office jobs, estimates 2 million of them in finance, human resources, information technology and procurement have disappeared in the U.S. and Europe since the Great Recession.
And it pins the blame for more than half of the losses on technology.
These are jobs that used to fill cubicles at almost every company — clerks paying bills and ordering supplies, benefits managers filing health-care forms and IT experts helping with computer crashes.
“The effect of (technology) on white-collar jobs is huge, but it's not obvious,” said McAfee. Companies “don't put out a press release saying we're not hiring again because of machines.”
The global economy is being reshaped by machines that generate and analyze vast amounts of data; by devices such as smartphones and tablet computers that let people work just about anywhere, even when they're on the move; by smarter, nimbler robots; and by services that let businesses rent computing power when they need it, instead of installing expensive equipment and hiring IT staffs to run it. Whole employment categories, from secretaries to travel agents, are disappearing.
“There's no sector of the economy that's going to get a pass,” said Martin Ford, who runs a software company and wrote “The Lights in the Tunnel,” a book predicting widespread job losses. “It's everywhere.”
The numbers startle even labor economists. In the United States, half of the 7.5 million jobs lost during the Great Recession paid middle-class wages, ranging from $37,000 to $68,000. But only 2 percent of the 3.5 million jobs gained since the recession ended in June 2009 are mid-pay. Nearly 70 percent are low-paying jobs; 29 percent pay well.
In the 17 European countries that use the euro as their currency, the numbers are even worse. Almost 4.3 million low-pay jobs have been gained since mid-2009, but a total of 7.6 million disappeared from January 2008 through last June.
Experts warn that this “hollowing out” of the middle-class work force is far from over. They predict the loss of millions more jobs as technology becomes even more sophisticated and reaches deeper into our lives.
Some occupations are beneficiaries of the march of technology, such as software engineers and app designers for smartphones and tablet computers. But, overall, technology is eliminating far more jobs than it is creating.
Software is picking out worrisome blots in medical scans, running trains without conductors, driving cars without drivers, spotting profits in stocks trades in milliseconds, analyzing Twitter traffic to tell where to sell certain snacks, sifting through documents for evidence in court cases, recording power usage beamed from digital utility meters at millions of homes and sorting returned library books.
To understand the impact technology is having on middle-class jobs in developed countries, the AP analyzed employment data from 20 countries; tracked changes in hiring by industry, pay and task; compared job losses and gains during recessions and expansions over the past four decades; and interviewed economists, technology experts, robot manufacturers, software developers, entrepreneurs and people in the labor force who ranged from CEOs to the unemployed.
The AP's key findings:
>> Technology is being adopted by every kind of organization that employs people. It's replacing workers in large corporations and small businesses, established companies and start-ups. It's being used by schools, colleges and universities; hospitals and other medical facilities; nonprofit organizations and the military.
>> The most vulnerable workers are doing repetitive tasks that programmers can write software for — an accountant checking a list of numbers, an office manager filing forms, a paralegal reviewing documents for key words to help in a case. As software becomes even more sophisticated, victims are expected to include those who juggle tasks, such as supervisors and managers.
>> Thanks to technology, companies in the Standard & Poor's 500 stock index reported one-third more profit the past year than they earned the year before the Great Recession. They've also expanded their businesses, but total employment, at 21.1 million, has declined by a half-million.
The lingering pain of the Great Recession is not entirely a result of technology's advances. Other factors are keeping companies from hiring — partisan gridlock in the U.S., for instance, and the debt crisis in Europe, which has led to deep government spending cuts.
But to the extent technology has played a role, it raises the specter of high unemployment even after political troubles lift and economic growth accelerates. Some economists say millions of middle-class workers must be retrained to do other jobs if they hope to get work again.
Others are more hopeful, noting that even though the wait can be long and painful, technological change over the centuries — think textile machines and the horseless carriage — eventually has created more jobs than it destroyed.