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6 - technology
(continued)

CHANGING RELATIONSHIPS, CHANGING RISK, CHANGING REGULATION

The potential for employer abuse of flexible workplace arrangements raises the broader issue of whether present laws are adequate for new workplaces. The Department of Labor administers approximately 180 labor laws. Other agencies, such as the Equal Employment Opportunity Commission and the National Labor Relations Board, enforce other fundamental worker-protection laws. By and large, these laws were enacted when the most prevalent workplace model involved a stable employer–employee relation-ship, with the typical employee working full time, but new workplace technologies are changing this model.

Changing technology also has potential impact on other workplace issues, such as the safety and health of workers. Technology can cause ergonomic problems—and solve them.(See box 6.7.) The manufacture of computer chips may expose workers to new chemicals, whose hazards are not yet understood. And enforcing job safety and health laws may be difficult when offices are located in private homes.

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Box 6-6 Workplace Technology for people with disabilities

New technologies might also affect worker rights in new ways. Genetic testing of current or prospective employees has raised concern about new discriminatory practices such as screening out persons who may incur high medical costs. In 1998, the American Management Association surveyed firms on the use of genetic testing and found that fewer than one percent were performing such tests.19 However, the fact that such tests are being performed at all raises questions regarding potential abuses—questions that need to be addressed early on.

Of more immediate concern is the issue of workplace privacy. Forty-five percent of major U.S. firms—according to a 1999 survey by the American Management Association—report that they record and review employees’ communications and activi-ties on the job, including telephone calls, e-mail, and computer files. This represents a 10 percent increase since 1997. Firms cited cost control, legal concerns, and performance reviews as reasons for these practices.20 As technology provides more sophisticated methods of monitoring and surveillance, privacy issues may arise more often.

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Box 6-7 Ergonomics in the Workplace

Better, faster, more accessible information

Technology can also have a positive impact. Computer-based technology has sped up and broadened the access to information for workers and businesses. The Department of Labor has funded a Web site to help bring together job seekers and employers in a virtual labor market. (See box 6.8.) The site provides information electronically on job openings, job seekers, education and training opportunities, and career counseling.

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Box 6.8 Creating a virtual electronic labor market

Employers spent $105 billion on online recruiting in 1998. Such spending is expected to increase more than tenfold by 2008. The power of online job hunting is exemplified at Cisco Systems, where two out of three new hires apply on line. The process shaves 68 days off Cisco’s typical hiring cycle.21 Workers, too, have benefited. One Silicon Valley worker lost her high-tech job of seven years just before Christmas. She told her incredulous husband, "The Internet is going to find me a job while I’m sleeping," and posted her resume on 30 Internet job boards. Within the month, she had received 60 inquiries. She then accepted a senior project manager position, a post better than the one she had lost.

Employers will also be able to train their workers more efficiently and effectively with new learning technologies. Technology-based training can accommodate differences in employee skill levels, in learning style and pace, and in family demands. The Federal Technology Training Initiative (FTTI) is a collaborative effort bringing together federal trainers, educators, and information technology experts to transform the way federal employees will learn in the twenty-first century. Partnerships have already been forged among key federal agencies, state and local governments, private industry, and universities. These partnerships are developing innovative business models that can spur investment in high-quality, technology-based instructional materials and methods.

CROSSING THE BORDER: GLOBALIZATION OF THE AMERICAN ECONOMY

The 1990s saw a combination of rapid technological change and widespread globalization, in part because the two processes are intertwined. The technologies underlying the Internet and telecommunications have increased the flow of information between countries, speeding the globalization process. At the same time, the spread of free markets has promoted greater competition world-wide, creating strong incentives for domestic producers to adopt new technologies.

Innovation and the ability of industries and companies to harness and apply technological innovation effectively will provide the edge in this new competitive framework. Clearly, competitive players in the global economy will need to staff their work-places with technologically proficient workers.

Labor market effects of globalization

The 1990s will be remembered for the spread of free markets. The fall of the Iron Curtain in 1989 has resulted in the institution of free market economic regimes, with varying degrees of success, in virtually all of the countries of the former Soviet Union, as well as Eastern European countries and even China. Concurrently, many less-developed countries in Asia and Latin America, at the urging of the international financial community, have reduced their barriers to free capital markets. The result has been the rapid expansion of trade and the movement of capital and information between countries.

President Clinton has made the expansion of international trade one of the three pillars of his economic policy: opening markets abroad to U.S. products improves U.S. economic performance. In the ten years ending in 1997, U.S. exports grew over 140 percent and accounted for one-third of total economic growth. But just as importantly, the President has been a strong and consistent advocate of fair trade, that is, a trading system that benefits all members of society. The economic health and security of American workers is increasingly tied to the health of the global economy. Ensuring quality jobs for American workers requires building a stable, secure, and prosperous international economic system in which all workers can achieve higher wages and greater economic security.

Every singleday, a half million airline passengers, 1.4 billion e-mail messages, and $1.5 trillion cross national borders.

President
Bill Clinton
June 12, 1999

Improving labor conditions and securing workers’ rights around the world are keys to creating new markets for exports, broadbased prosperity, sustainable economic growth, and stronger democracies. Building sound safety nets and implementing core labor standards help ensure minimum working conditions. Indeed, expanding trade and securing basic worker rights can be mutually reinforcing goals.

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Table 6-1 U.S. Trade Flows

Many countries in the developing world lack the resources or know-how to implement core labor standards. An even greater number lack the ability to create mechanisms that could improve working conditions, help dislocated workers find new jobs and skills, and help women who have been locked out of the economic mainstream. These countries are increasingly turning to international organizations and to the developed nations of the world for help in raising work standards by increasing the institutional capacities of their labor ministries and the industrial relations institutions that help resolve disputes through democratic means. As economic globalization and rapid technological change dramatically alter the world of work, the International Labour Organisation (ILO) has the preeminent international role to meet this challenge. The ILO is focusing its efforts on promoting fundamental principles and rights at work, improving living and working conditions, and creating employment.

Core labor standards

In June 1998, the International Labour Conference adopted the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up. The Declaration promotes adherence to five fundamental principles which have come to be known collectively as core labor standards—the right to freedom of association, the right to organize and bargain collectively, the elimination of forced or compulsory labor, the effective abolition of child labor, and the elimination of discrimination in employment. The ILO will hold all member states accountable for these standards.

Unfortunately, there are many places around the world where the basic worker protections are not guaranteed. In some countries facing civil conflicts, such as Colombia, trade union leaders have been the victims of violence. In China and Sudan, there are widespread violations of basic trade union rights, and labor activists face the threat of arrest. In Burma, there is a total absence of any rights in the workplace, and forced labor is imposed on the civilian population by military authorities. In Afghanistan, women and girls may not go to school or work outside the home. And, worldwide, there are an estimated 250 million children between the ages of 5 and 14 who work—approximately 120 million full-time—and tens of millions of them work under deplorable conditions. 22

In June 1999, the ILO unanimously adopted a new convention on the worst forms of child labor. The convention establishes a universally recognized international standard for protection of children against forced or indentured labor, including forced or compulsory recruitment of children for use in armed conflicts, child prostitution or pornography, drug trafficking, and other work likely to harm the health, safety, or morals of children. This new convention will augment efforts by the ILO’s International Program on the Elimination of Child Labor (IPEC). IPEC develops region-, country-, and industry-specific projects targeting situations where children work in exploitative or dangerous conditions. The United States became the world’s largest donor to IPEC in 1999 when President Clinton sought and won a tenfold increase in U.S. funding for international child labor activities, including some $30 million a year for IPEC.

U.S. labor market strategies must be developed in the context of increasing global market integra-tion, since globalization will continue to have significant economic and social consequences for U.S. workers. Questions about how we improve the lives of working people, how we make sure that prosperity is broadly shared, and how we ensure that workers have the tools needed to manage change must be answered.

International trade benefits workers, consumers, and producers in the countries involved—through lower consumer prices, more efficient production of goods and services, and higher economic growth. Although the gains of trade are widely distributed, the losses are concentrated in import-competing sectors that, without protection, are no longer competitive. Those industries affected tend to be concentrated in specific geographic areas. Some evidence shows that imports, together with mechanization, have contributed to job loss in manufacturing industries such as textiles/apparel and steel.23 However, these job losses tend to be offset by job and income growth in other industries.

Globalization consists of trade, immigration, capital flows, and information flows.

Professor
Richard Freeman
February 25, 1999.

International trade seems to contribute to job growth in sectors where the United States exports heavily. In many durable goods industries—such as industrial machinery, electronics products, and transportation equipment—exports account for large parts of total production and employment. Overall employment in these industries has generally risen since 1993. International trade probably has little effect on overall unemployment rates in the United States since the U.S. labor market is likely flexible enough to adjust to these kinds of sector shifts and to generate low unemployment rates over the long term.

While U.S. consumers benefit from the lower product prices generated by international trade, at least some U.S. workers, companies, and communities are hurt, particularly those workers who permanently lose their jobs, and those companies that go out of business because of imports. To be sure, about one in four displaced workers are in manufacturing, 24 but international trade accounts for only a fraction of that.

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Table 6-2 Five industries in which exports account for a high percentage of employment, 1998

Some Americans fear that international trade will cause a "race to the bottom," in which competition for jobs with the lowest-wage countries will lead to wage reductions around the world. This is a legitimate concern but unlikely to be a real threat. In fact, the contrary appears to be true. Since the trade agreements of the 1990s, U.S. wage levels ended a twenty-year period of stagnation. Americans are once again experiencing real wage gains. Countries with very low wages generally have low-skilled workforces and very low levels of productivity. Employers who require skilled work-forces are, therefore, discouraged from locating there. Furthermore, countries such as South Korea, Taiwan, and others in East Asia that have succeeded in attracting employers from the United States and Europe generally experience rapidly rising wages, thus narrowing the wage gap between their workers and U.S. workers. Finally, the inter-national labor standards described above are an important component of a fair-trade strategy, ensuring that workers around the globe share in the gains of international trade.

THE FUTURE

Rapid changes in technology are expected to continue—as is the resulting widespread impact on industries, businesses, and workers. These technological changes will further alter how products and services are made and delivered and will continue to affect the workplaces in which they are conceived, sold, and produced. The workforce of the future will need to adapt to the rapid pace of technological change by continuing to upgrade their skills. The importance of lifelong learning cannot be overestimated.

Some workers may lose their jobs as a result of changes in trade patterns. The proper public policy response to such job loss is not protectionism, but rather assisting individual workers to adjust to labor market changes caused by increased trade and globalization. The Trade Adjustment Assistance Program and the North American Free Trade Agreement Transitional Adjustment Assistance Program, both administered by the Department of Labor, offer a comprehensive array of income support, retraining, and reemployment services to workers who lose their jobs because of international trade. Additional assistance to dislocated workers is available through the Job Training Partnership Act, which is being replaced by the Workforce Investment Act. Job search allowances may also be provided to workers seeking suitable employment outside their normal commuting area and relocation allowances may help defray moving expenses should they find employment in another part of the country.

More broadly, policies to prevent job loss from international trade or to facilitate the transition of affected workers to new jobs continue to be important. Ensuring fair and open trade among countries must remain a part of this policy package. Policies that encourage more private sector training of workers before they lose their jobs might also be an important part of a job-loss-prevention strategy.

I have long believed that a strong economy in a foreign land is not a threat to our jobs; it’s a new market for America’s products; an engine of human dignity and environmental preservation; a partner for peace and freedom and security. But I strongly believe that the only way to do that is to have trade agreements that lift everybody up, not pull everybody down. They shouldn’t undermine labor rights or environmental standards. They should enhance labor standards and environmental protection all across the world.

President Bill Clinton
June 12, 1999


18 U.S. Department of Defense, Military Health System, Computer/Electronic Accommodations Program, http://www.tricare.osd.mil/cap/accommodations/accommodation.html.

19 American Management Association, "Summary of Key Findings - Genetic Testing," 1999 American Management Association Survey on Workplace Testing: Medical Testing, http://www.amanet.org/research/monit.

20 American Management Association, "Summary of Key Findings," 1999 American Management Association Survey on Workplace Monitoring and Surveillance, http://www.amanet.org/research/monit/intro.htm.

21 Jerry Useem, "For Sale On-line: You," Fortune, July 5, 1999, p. 70.

22 International Labour Organization, "Child Labour: Targeting the Intolerable," 1998; and other information compiled from ILO reports.

23 Robert W. Bednarzik, "An Analysis of U.S. Industries Sensitive to Foreign Trade, 1982-87," Monthly Labor Review, February 1993, pp. 15-31.

24 U.S. Department of Labor, Bureau of Labor Statistics press release, "Worker Displacement, 1995-97," http://stats.bls.gov/news.release/disp.toc.htm, August 19, 1998.

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