Living With Automation

Cutting Through The Myths And Misconceptions Surrounding A Technology That is Liberating Man From Mechanical Drudgery

There is an old Joke which holds that the difference between an optimist and a pessimist is most obvious early in the morning--at the breakfast table. The optimist glances toward the opaque pitcher standing at the far end of the table and brightly asks the nearest person to pass him the cream. The pessimist, on the other hand, stares dourly at the same pitcher and growls for someone to hand him the milk.

The joke isn't very funny. However, it does succinctly sum up the opposing views that prevail today on the highly controversial subject of industrial automation.

It is still early in the morning; the trend is only in its beginning stages. Pro-automation "optimists" are predicting automation will usher in an era of unparalleled prosperity; they view industrial automation as the richest and most delectable cream in the nation's economic pitcher.

Stubbornly opposed are those who, like AFL-CIO president George Meany, believe automation is a very thin and watery--and, indeed, highly toxic--milk that will prove a "real curse to our society" and could eventually cause "national catastrophe."

I incline to the optimistic view--with certain reservations. I am acutely aware that automation cream is potentially an extremely dangerous substance that must be handled with meticulous care. Like any other major step in economic progress, it is fraught with problems, and the hardships that it causes must be minimized by every possible means.

Industrial automation increases production--or, stated another way, makes labor more productive, making possible the production of more and better goods and the provision of more and better services at lower prices. This, of course, is the basic formula for the creation of higher living standards for all.

On the other hand, automation carries with it an economically undesirable by-product. It does put people out of work; the machines do displace human beings. How many and at what rate is a question for which there seems to be no definite answer.

George Meany recently estimated 80,000 as the number of persons being made jobless each week by the automation of industry. The late John I. Snyder, Jr., former chairman of U.S. Industries, placed the rate at 40,000 weekly. Former U.S. Bureau of Labor Statistics Commissioner Ewan Clague cited a considerably more modest--but still extremely worrisome--20,000-a-week rate. Thus, depending on whose figures one accepts, anywhere between 1,000,000 and 4,000,000 workers are being automated out of their jobs each year.

It is said that the worst is yet to come. Recent Department of Labor statistical projections estimate industrial automation will result in a loss of more than 4,000,000 available jobs in the next five years. And, the Labor Department predicts, the nation's potential labor force will have grown by over 10,000,000 during the same period, to make a total of over 14,000,000 unemployed persons in the United States by 1970.

The impact automation has already had can be seen in the steel industry. Technological advances such as entirely automated blooming mills and the relatively new oxygen-converter process for making steel have slashed the number of workers needed and greatly boosted production. According to the steelworkers' union officials, the industry employed 540,000 persons in 1951. Twelve years later, the number had fallen to 410,000--yet the mills were turning out more steel than they had in 1951.

There are many who hold that the problem is not so much one of lack of work as it is of retraining workers and upgrading skills. Missouri Congressman Thomas Curtis has pointed this out in his book 87 Million Jobs:

"Millions of jobs are going begging in America today, even while we are plagued by high unemployment," Congressman Curtis writes. "Our newspapers, if we read them closely, hammer this point home every day. On page one there is likely to be a story about high levels of unemployment. On the classified-ad pages there will be column after column of job openings. The truth should be apparent. There are as many jobs available as there are persons without jobs. The problem is upgrading skills so that the unemployed can fill the jobs." (The italics, incidentally, are the Congressman's.)

Leslie B. Worthington, president of U. S. Steel, has declared that "Automation in itself offers no problems that cannot be solved in the normal operation of our competitive free-enterprise economy."

Economic history would seem to support this encouraging outlook. The trend toward automation in industry has frequently been referred to as the "New Industrial Revolution." I, for one, can't see very much new about it--not in the sense that it is an unprecedented development. It is part of a continuing stream of technological and industrial progress that began thousands of years ago.

The man who rigged the first sail on a dugout canoe was "automating" by utilizing the wind to carry his craft across the water more swiftly and easily than he could propel it with pole or paddle. The wheel greatly reduced the number of men, or animals, needed to drag a sledge over the ground. The abacus supplanted innumerable people who had previously tallied sums on their fingers or in their heads. Howe's invention of the sewing machine in 1845 put vast numbers of seamstresses and tailors out of work, but made possible (continued on page 136) Living With Automation (continued from page 124) more and better clothing for more people. The typewriter, invented in the 1860s, displaced many ink-stained clerks, but greatly facilitated business and commercial correspondence and record keeping and provided new jobs. A hundred years ago, printers' type was set by hand. Then, in 1884, Mergenthaler introduced his linotype, "automating" the typesetting process and making it possible to set a column of type in a fraction of the lime previously required.

The sewing machine made x number of seamstresses and tailors jobless. The typewriter did the same to y number of scribes. The linotype threw z number of hand typesetters out of work. But no one can deny that sewing machines, typewriters and linotypes have all helped mankind to live better. And the workers these inventions supplanted were absorbed elsewhere in the economy--an economy, by the way. that expanded because of, and not despite, such labor-saving devices.

Yale Brozen, professor of business economics at the University of Chicago, recently wrote:

"Those who are concerned about unemployment should welcome rather than fear automation. If it were not for the technical advances of the past decade, unemployment, at present wage levels, would be above the astronomical levels of the early 1930s.

"Technological change has created more jobs than it has destroyed. The number of civilians at work in 1961 was 7,000,000 higher than 10 years before. Technological change and the growth in our stock of capital (in the form of plant and equipment and in the form of raising the educational level of our population) created over 20,000,000 jobs in the Fifties. About 13,000,000 jobs ceased to exist for various causes. The net gain was 7,000,000 jobs."

I tend to agree. I believe that automation holds much promise, that it means economic progress, not economic disaster. In my opinion, the real disaster would come if American industry failed to take full advantage of every opportunity to increase production in this critical period of world history.

The companies I own or control or in which I hold substantial interests have banked heavily--and confidently--on automation, despite the doubts and reservations expressed elsewhere in the industries in which they operate. For example, in 1955, the Tidewater Oil Company began construction of a new refinery near Wilmington, Delaware. The refinery was revolutionary--even radical--in concept and design. It was planned to be as completely automated as the most advanced--and, in some instances, strictly drawing board--technology permitted. Almost the entire plant--covering thousands of acres and designed to refine some 50,000,000 barrels of crude annually--was to be electronically controlled. In some petroleum-industry quarters, it was predicted that the refinery would be a hopeless white elephant filled with bugs that would take years to eliminate.

"The Getty interests have bitten off more than they can chew this time," more than a few industry wiseacres predicted. These well-wishers then sat back and waited to see the fiasco. Two years and $260,000,000 later, the Tidewater refinery went into operation--and it has been producing at peak efficiency ever since.

My associates and I had no qualms about constructing this more-than-a-quarter-billion-dollar automated refinery--and we feel that it will do its share in meeting the needs of the nation's petroleum-product users more efficiently. Keeping abreast of the growing demands for processed or manufactured goods is one of the great services that automation provides to the public.

I do not think there will be 14,000,000 unemployed Americans in 1970. In fact, I am confident that the next five years will show an appreciable net gain, rather than any net loss, in the number of jobs available to workers in the United States.

I contend that the industrial automation which will so greatly boost the output of everything from raw materials to the most complex manufactured items will not, in the long run, reduce employment. It will, instead, increase employment, by providing more--and, above all, better and better-paying--jobs for millions of our citizens.

How can I say this in the face of so many arguments that have been presented to the contrary? The answers to that question are as simple as the fundamental two-plus-two arithmetic of business and the basic truths so often demonstrated by economic history. The following are some of the reasons I believe that automation can be the cream in the nation's economic pitcher.

1. Since automation increases the productivity of labor, it will permit substantial increases in the pay of those who are employed in automated industries. This will, of course, boost the buying power of the employed worker and create an additional demand for products and services.

2. As production costs are lowered by automation, prices of goods and services will drop, putting them within reach of lower-income groups at home and abroad, again increasing demand and consumption.

Incidentally, in my opinion the huge--and so far largely untapped--markets in what are now the so-called "underdeveloped" countries will absorb a tremendous share of America's automated production. In fact, I consider it highly doubtful if our industry will be able to catch up with the constantly expanding demand in these areas for many, many years to come.

3. The same "miracle" machines which take away jobs will be creating new ones almost as automatically as they spew out materials and goods. Entire new service industries must necessarily spring up to nurse the complex mechanical and electronic devices. Innumerable highly trained--and, certainly, highly paid--technicians will be needed to keep the machines functioning properly. Without question, legions of ancillary workers--from secretaries and stock clerks to truck drivers and purchasing agents--will be required to support these new armies of technicians. It might bear noting that technicians are made, not born. There will have to be schools and instructors to train the specialists--another source of new jobs.

4. I fully expect that, in a few years, we shall see the beginning of the end of the 40-hour, five-day work week in many industries. I believe we will eventually have a 32-hour--or even shorter--four-day work week.

I have, in my own lifetime, witnessed a steady, and very sharp, reduction of the basic work week. When I first started working in the Oklahoma oil fields, the normal daily shift was 12 hours--six days a week. In the years that followed, most industries and businesses reduced the work week to five and a half days and then to five days--and, of course, slashed the number of hours to be worked each week.

Less-than-40-hour work weeks already prevail for workers in many trades and industries. For example, in New York, journeymen electrical construction workers even now enjoy a basic 25-hour work week (plus five hours of mandatory over time each week).

There are labor statistical projections which forecast a total labor force of 78,600,000 people in the United States by 1968, and predicted that only 64,000,000 will be employed, while 14,600,000 will be out of work. In other words, almost one in every six American workers will be unemployed.

These figures are apparently predicated on the assumption that working hours and work weeks will remain as they are at present. It should be evident (concluded on page 249) Living With Automation (continued from page 136) that the reduction of the five-day work week by a single day--by one fifth--will in itself go a long way toward closing the employment gap.

5. If one accepts the idea that the work week will eventually be cut to four days--and I think one must accept it--then most worries about mass unemployment in the age of automation should vanish. No extraordinary exercise of imagination is needed to picture the immense demand for new and more goods and services that will be automatically created when the American worker has an additional free day each week. Any businessman who deals in consumer goods or services will appreciate the potentials. Travel agents, hotel and resort owners, the manufacturers of hobby and sporting goods, should fairly goggle at the prospects. One does not require any clairvoyant powers to see that the three-day weekend will put vast amounts of money into circulation and create tremendous numbers of new jobs.

6. Workers will be retired from their jobs at an earlier age in an automated America. This trend, too, is already established. Many companies have already initiated compulsory early-retirement programs. I foresee that the retirement age will continue to drop steadily, creating openings for young men and women and also going far toward narrowing any employment gap in the age of automation.

I'm aware it has been argued that early retirement will cause undue hardship for men and women who, being accustomed to work, are suddenly turned out to pasture while still in their prime. But I think people are getting accustomed to the idea that they can retire with pensions while still comparatively young. I believe all will adjust themselves quite happily to the situation and thoroughly enjoy their longer lives of retired leisure and pleasure.

Some of the companies in which I hold controlling interest have already instituted compulsory early-retirement programs. These were at first approached with hesitation, due to the fear that they would cause unhappiness among those retired and damage the morale of other employees. I am pleased to note that all such fears were unfounded. There has been little evidence of resentment among any employees, active or retired. Those who have retired are, according to all reports, enjoying themselves. "I'm finally able to do many of the things I wanted to while I was working--but couldn't because I just didn't have the time," is the comment of one former employee --and it's fairly typical of the reactions of many who were given early retirement. Incidentally, I do not hesitate to make another prediction--that more-liberal pension schemes will be another byproduct of the automated age.

These, then, are some of the reasons I incline toward the optimistic "automation is cream" viewpoint. My basic views can be summed up by quoting another statement made by U. S. Steel president Worthington: "There will be a continually increasing need for ever more efficient production tools to turn out the quantities and varieties of products that we shall need in the future." He declared that this plus the broadening of markets and the widening of demands for our present products will provide the solution to the problems of unemployment.

But, as I have indicated, I hardly maintain that this golden age will come about without a hitch. I believe it to be clearly incumbent on government, organized labor and business to work together to minimize the hardships of those who are "automated" out of their jobs during the transitional period.

Methods must be found for taking up the employment slack even as automation pays it out during the transitional period. Those that give promise of being effective should be adopted with a minimum of argument.

Above all, provisions must be made to insure that people who become unemployed through no fault of their own will receive something approaching a reasonable allowance until they are retrained or find new jobs. Nothing is more demoralizing to a worker than to find himself jobless and forced to depend on loans or charity in order to live. And, it might be added, nothing is more destructive to a socioeconomic system than to have large numbers of workers in such a position.

Plans and provisions must be made to rehire or retrain workers who are laid off because they have been replaced by machines. Some steps have already been taken in these directions. The Federal Government provides a retraining allowance in certain cases. Several large firms conduct retraining courses, as do some labor unions. Unfortunately, these present programs are inadequate--especially in view of added layoffs which can be anticipated as more and more industries automate. The programs must be expanded with as little delay as possible.

Five years ago, I wrote in a magazine article: "Unemployment, except in times of depression, is seldom country-wide. The programed transfer of people without jobs from one city to another where jobs are available is certainly within the realm of possibility. Naturally, such transfers would be made only if the individuals concerned indicated their willingness to move.

"With government, business and organized labor all pitching in, such transfers could be accomplished with a minimum of confusion and dislocation, and would go far to eliminate large 'islands' of unemployment."

Not long ago, Congressman Curtis outlined a sweeping program that calls for "an analytical, nationwide study of the skills of the future, emerging skills of the present and obsolescent skills of the past" and for the establishment of a "national clearinghouse for the classification of these skills and their needs on a geographic basis."

New York Governor Nelson Rockefeller has called for stepped-up technical education and Federal aid for any worker who, in order to obtain employment, has to move to a different city. U. S. Industries' Snyder wanted a complete revision of education at all levels throughout the nation--a revision that would intensify scientific and vocational training.

Neither these men nor I are advocating a planned economy; the call is for sound economic planning. I firmly believe that some program embodying these and other constructive ideas will be developed and placed in operation before very long.

The aim of the active three-way cooperative effort of government, labor and business must be to prevent unemployment from getting out of hand during any stage of the transitional period leading to the automated age. If this is not done, if unemployment runs wild, then the predictions of the pessimistic "milk" theorists could well prove true.

Of course, preventive and curative measures will require enormous amounts of planning, implementation--and, above all, money. Yet, the measures must be found and the necessary steps taken, regardless of cost, or the thick and tempting cream of automation is liable to turn into milk, and very sour milk at that.

I have a strong hunch that everything necessary will be done. I hardly think that American business--or labor or government--harbors any lemminglike urge to commit economic suicide. The promise of automation is too great, the dangers are too plain, for any segment of our society to reject the former or to ignore the latter.

Thus, I am certain the problems will be solved and the pitfalls will be avoided. The needed measures will be taken in time--and the automated world will be a much better place in which to live. America--and, indeed, the entire world --will fatten on the rich cream of the age of automation.