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These information technology-induced changes in the structure and performance of the U.S. economy have had significant consequences for the American workforce. The incorporation of new digital technologies into all sectors of the U.S. economy has created substantial new demand for expertise in software development, the management of computer and information systems, technical support services, and the manufacturing of high-tech gear. Information Technology (IT) is the fastest growing sector in the economy, with a 68 percent increase in output growth rate projected between 2002 and 2012.8
Figure 5 depicts the changes in IT-employment from 1994 through 2014 (projected) for the information and agriculture sectors. Comparing the two industries side-by-side, it is clearly visible the demand for information jobs will steadily gain momentum, while agricultural employment will continue to dwindle, with a projected 1 million jobs lost by 2014.
Growing demand for workers in the information-technology sectors has pushed up their wages relative to workers in other industries. According to the Bureau of Labor Statistics, the average hourly earnings of non-supervisory information workers increased from $17.14/hour in 1997 to $26.37 in March 2011; during the same period average hourly earnings from the private sector increased from $12.51 in 1997 to $19.32 in March 2011.9
Over 60 percent of workers in the U.S. economy are now considered knowledge workers. Knowledge workers are also called “symbolic workers,” as they use very little physical or mechanical labor. Unlike their industrial counterparts, knowledge workers spend their time at work manipulating information rather than machines. An increase in knowledge workers has lead to a decline in other sectors of the economy, such as service and labor-intensive jobs.
The flip side of increased demand for high-tech workers is the decreased demand for workers in industries where computers and other high-tech devices have replaced tasks that used to be performed by people. Workers have also lost jobs in industries or firms that have been unable to adopt new information technologies as effectively as industries or other firms that offer comparable products or services.
For example, the U.S. manufacturing sector lost three million jobs between 2000 and 2006.10 According to the U.S. Bureau of Labor Statistics, from May 2007 to May 2008,the number of unemployed individuals within the manufacturing sector increased from 651,000 to 879,000.
Many of those workers who lose jobs in declining firms or industries lack the education or training to take up jobs in the high-tech sector. A person who spent 30 years in a steel plant that is shutting down may not be equipped to work for many of the industries that are adding jobs as our economy transforms itself. State governments and the federal government offer programs designed to help workers acquire the training and education needed to make the transition from declining to growing sectors of our economy, but the record of these programs has been mixed.
Unfortunately, many firms in the industries that are succeeding also have a bias in their hiring practices toward younger workers. They may believe that younger workers are more flexible and more easily trained than older workers, and they may undervalue the importance of experience and maturity.
The IT-driven cycle of job creation and job destruction can be seen in almost every sector of the new, knowledge-based economy. The automation of assembly lines has reduced jobs in manufacturing, for example, but it has created new jobs in robotics technology and computer engineering. The introduction of computers has reduced the need for many kinds of clerical work in offices, but it has also created a new demand for computer designers, software writers, computer system managers, service personnel, and data entry workers.
8 Source: U.S. Bureau of Labor Statistics: http://63.88.32.17/brg/Indprof/IT_profile.cfm
9 Ibis, ftp://ftp.bls.gov/pub/suppl/empsit.ceseeb2.txt
10 Christian Science Monitor, http://www.csmonitor.com/Business/2008/0215/p01s04-usec.html
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