Technological Crisis

By: Kaylah Gray

With todays day and age it seems that everything is becoming electronic. Letter writing and faxes were replaced by email, paper checks were replaced by direct deposit, and disposable cameras were replaced by a app that is found in each cell phone. Though all of those changes were made decades ago, the producers have wasted no time bettering the technology. Now email is replaced by text messages and snapchat and a check can now be deposited by sending a picture of the check to the bank. Whether it’s known or not, this new technology advancement has put the economy into second machine age. The picture below represents the technological hold that is on our economy.

Household electronics are not the only ones that are seeing advancement. According to the article “How the rise of smart machines will affect the U.S economy and jobs” the author, James Pethokoukis stated that some of the technological advancements are taking place in the work place. Now a days, the better an individual is with technology, the more qualified they become for a job. There isn’t a workplace in America that does not involve the use of technology. Those that are great with technology become a more valued part of society, while those not so great will find themselves in structural unemployment.

Though the second technology age is affecting the workplace, it somehow does not show up in the country’s GDP. Pethokoukis believes that one of the biggest problems we face is measuring our productivity. Because the economy is missing more and more of the digital age all of the free goods don’t show up in the GDP. These goods are a huge part of the GDP, but are badly mismeasured because they are introduced into the market and then the prices drastically decline. Because of this, Pethokoukis believes that there is a serious problem with the economic statistics.

The effect of technological change has created an influence in the retirement decision of older workers, the skill acquisitions of younger workers, and the wage structures of those employed. Those that are more advanced in technology, make more money then those who are not. According the article, “Technological Change and the Labor Market” the authors Ann P. Bartel and Nachum Sicherman stated that with all the technological changes, the human capital rate is starting to depreciate. Now that technology can take someone’s job, there is no longer a need or want for on the job training. An unexpected increase in the rate of technological change can lead to a depreciation in human stock, decreasing the rate of investiment in human stock. If older workers are not willing to advise their investiment in human capital, it leads to earlier retirement.

Though every piece of technological item there is was created to make our lives easier, it is starting to do the exact opposite. The advancement of technology is starting to affect the workplace and is sending us into another technology age that is increasing unemployment in some areas and decreasing the retirement age in others. The new technology advancements we have made aren’t affecting the GDP as it should. Because of the drastically decline for demand and prices after introduced to the market, it is hard to correctly calculate the GDP. It is because it’s hard to calculate the GDP on technology that it is affecting the Economy. (evolution of technology)