DE-INDUSTRIALIZATION

DE-INDUSTRIALIZATION American farming is a perfect example of de-industrialization. For centuries the American economy was composed of a large number of family farms, and agriculture was one of the nation's largest employers. But giant leaps in technology and production efficiency not only increased output, but reduced the number of farmers by 76 percent in the last 50 years. Today, a handful of American farmers feed the world. What happened to farmers is currently happening in almost every industry on earth. The rise of computers and the Internet is especially accelerating this trend towards hyper-efficiency. Soon, we will have an almost paperless economy; the information superhighway will handle nearly all our mail, bills, financial transactions, taxes, voting, newspapers, magazines, books, education, public notices and more. This means that entire industries will face drastic cutbacks, including the timber industry, letter postal services, accountants, bank-tellers, printers and others. In fact, we are already seeing the first large-scale effects of greater efficiency in the following mass layoffs since 1990:¹

Company                   Jobs laid off
AT&T                      40,000
Chemical/Chase Manhattan  12,000
GTE Corporation           17,000
IBM                       60,000
Delta Air Lines           15,000
McDonnell Douglas         17,000
General Motors            74,000
Digital Equipment         20,000
Sears, Roebuck & Co.      50,000
Philip Morris             14,000
Boeing                    28,000
Nynex                     16,800
Scott Paper               11,000

In past decades, such massive layoffs would indicate the company was in trouble. Not so anymore. Investors and stockholders on Wall Street actually see mass layoffs as a sign of increased efficiency and greater profits; stocks surprisingly soar after mass firings. This is something very new to the American experience. And it also raises a dilemma. How does America respond to an increasingly automated and electronic economy? If humans transfer the workload to machines, then humans are no longer working and receiving the paychecks they need to survive. If humans solve this problem by creating yet more jobs, then the GDP will explode, thanks to the increased productivity that all new workers will have. In this case, there is a real concern as to whether the earth's resources and environment can carry such an exponentially growing economy. These are large questions, but the reality of mass layoffs is forcing us to answer them sooner rather than later. Return to Overview ___________________ ¹ "Corporate Killers," Newsweek, February 26, 1996, pp. 44-48.