Technology Impact on the Economy of the Country

 

Research Paper

Although the overall poverty rates have been steadily decreasing in the United States, one problem that is rapidly increasing is the enormous economic divide between the wealthy and those living under the poverty line. Throughout the mid-to-late twentieth century, the world experienced a second industrial revolution known as the Digital Revolution. According to Techopedia, the Digital Revolution, which marked the beginning of the Information Age, ‘refers to advancement of technology from analog electronic and mechanical devices to the digital technology available today.’ This revolution has had many different social, cultural, and economic effects. One major socioeconomic impact that this advancement in technology has had is the growing wealth divide between the upper-class and the poorer lower-class. When analyzing this increasing economic inequality, one might be left with certain questions.

Research Questions

  1. What direct impact does the advancement of technology have on the economy?
  2. Does the advancement of technology have stronger impacts on different groups of people?
  3. Why does the advancement of technology have an effect on the economic divide in the United States?

 

As I start this research paper, I must discuss a few general topics. The poverty threshold is the minimum level of income for a household deemed adequate by the federal government. Currently, for a four-person household, a family must be earning $25,100 to be considered above the poverty line . This poverty threshold is mainly used by the federal government and government agencies for statistical purposes . Throughout the last half-century, the poverty rates have fluctuated between 11.1 percent, in 1973, and 19 percent, in 1964 . In 2017, the poverty rate in the United States fell to 12.3 percent (Edwards). Although this statistic seems like it has dropped significantly from 19 percent fifty years ago, the overall number of people living in poverty has more than doubled since 1973 . Almost 47 million American are presently living at or under the poverty line.

Another important topic when speaking about the economy is the unemployment rate. Throughout the last decade, the unemployment rate has been rising and falling more than usual. As a result of the “Great Recession” of 2008, unemployment shot up more than five and a half percent to just over 10 percent. This is only the third time that the unemployment rate reached above 10 percent since the beginning of the twentieth century. The first occasion in which unemployment skyrocketed and stayed above 10 percent was during the Great Depression, which at its peak around 25 out of every 100 Americans were jobless (Amadeo). The second time happened during the early 1980s when a slight recession caused by high oil prices occurred . Since the Great Recession of 2008, the unemployment rate dropped down and has remained constant at 3.7 percent since September of this year (Bureau of Labor Statistics Data). Although over the past few months the national unemployment rate remained stagnant, ‘approximately 250,000 jobs were created in October 2018’ (Brainerd). The image below depicts the U.S. unemployment rate between 2008 and 2018.

As the major focus of my term paper is to research technology’s effect on the economy and the economic divide, it is important to understand how the technological job sector is developing. Even though you may think that a specific job has no relation to technology, a majority of jobs and occupations do require some form of technological or digital skill. A statistic shows that “more than 50 percent of today’s job require some degree of technology skills” which proves that technology is invading almost all parts of the economy. 

According to the same statistic, “experts say that percentage will increase to 77 percent in the next decade” (Macaulay). Some predictions say that occupations in computer and information technology will experience significant growth over the next decade. The Bureau of Labor Statistics project that employment in this field will grow 13 percent from 2016 to 2026 (‘2017 Median Pay’). This projection is equal to the addition of 557,100 new jobs in computer and information technology (‘2017 Median Pay’). According to the same source, ‘the median annual wage for computer and informational technology occupations was $84,580 in May 2017, which was higher than the median annual wage for all occupations of $37,690’ (‘2017 Median Pay’).

A study done by Stanford, the Massachusetts Institute of Technology, Northwestern University, and Indiana University looked to understand ‘how much a company’s stock price was impacted by news that it had been issued a new patent’ (Moritz). This study looked at over 1.8 million patents granted to companies between 1926 and 2011. According to the study, a new patent had a strong impact on the company’s stock price. Moritz stated that ‘[the] more game-changing patents they racked up, the bigger they grew and the better their edge was over others.’ 

The research team also found that the top 10 most innovative companies had growth around 1 to 3 percent faster than companies that innovated at the normal speed (Moritz). The researchers discovered that an upsurge in technological products correlated to a boost of the average annual U.S. economic output by between 0.6 and 6.5 percentage points (Moritz). Admittedly technology may not appear to have a major impact in the economy, the U.S. economy’s average growth since 1947 is less than 3.5 percent per year (Moritz).

As I move into the second portion of my term paper, I would like to research another aspect of the how the advancement and development of technology affects the economy and the economic divide. Using my second guiding question, I will research, learn, and report on how, and if, the advancement of technology affects the economic status of certain group of people.

Two groups of people that are affected by technology very differently are people with high incomes and people with low incomes. A 2012 Pew Research Center report shows that ‘only 62% of people in households making less than $30,000 a year used the internet’ (Soltan). This is much less than the 90 percent of people making between $50,000-$74,999. A large amount of low income households depend much less on the internet than households with middle-to-high incomes. Another Pew survey showed that teachers of lower income students often reported that they had more problems using education technology effectively than those teaching in affluent schools (Soltan).

 Another statistic that shows the difference in technology availability between groups of high and low incomes says that in areas of high income, 70 percent of teachers said that the school gave them good support for bringing technology into their teaching while only 50 percent of teachers from low income areas said that they had been given good support (Soltan). As shown in the images above, people with lower incomes are much less likely to have digital devices than those with higher incomes.

One group that is being tremendously affected by the numerous amounts of advancements in technology is blue-collar workers. The term ‘blue-collar worker’ is used to categorize people that usually perform some sort of unskilled manual labor. Many blue-collar jobs are simple, mundane, and repetitive tasks that can be done by most people. Some examples of blue-collar jobs are jobs in sanitation, manufacturing, food processing, and warehousing. Wikipedia states that ‘educational requirements for [blue-collar] workers are typically lower than those of white-collar workers.’ It is also says that ‘often, only a high school diploma is required.’ One facet of technology that has a major impact those with blue-collar jobs is automation.

Automation, or sometimes more commonly referred to as artificial intelligence, is a type of technology that is pre-programmed to complete a specific task. Many blue-collar jobs are in jeopardy due to the very nature of automation. One blog states that ‘automation has a single purpose: to let machines perform repetitive, monotonous tasks’ (Evans).

Works Cited

  • “1980-82 Early 1980s Recession.” Westward Expansion: Chinese in California, 7 March 2011, bancroft.berkeley.edu/ROHO/projects/debt/1980srecession.html
  • United States, Congress, Office of the Assistant Secretary for Planning and Evaluation, et al. “Poverty in the United States: 50-Year Trends and Safety Net Impacts.” Poverty in the United States: 50-Year Trends and Safety Net Impacts, Officer of Human Services Policy, 2016, aspe.hhs.gov/system/files/pdf/154286/50YearTrends.pdf
  • “Bureau of Labor Statistics Data.” U.S. Bureau of Labor Statistics, U.S. Bureau of Labor Statistics, data.bls.gov/timeseries/LNS14000000.
  • “What Is the Digital Revolution? – Definition from Techopedia.” Techopedia.com, techopedia.com/definition/23371/digital-revolution
  • Edwards, Ashley. “Poverty Rate Drops for Third Consecutive Year in 2017.” Census Bureau QuickFacts, United States Census Bureau, 12 Sept. 2018, census.gov/library/ stories/2018/09/poverty-rate-drops-third-consecutive-year-2017.html.
  • Brainerd, Jackson. “National Employment Monthly Update.” Affirmative Action | Overview, 2 Nov. 2018, ncsl.org/research/labor-and-employment/national-employment-monthly-
  • update.aspx.
  • Macaulay, Fiona. “Technology Skills Training Critical to Employ Low-Income Youth.” Safety & Security Manager | Devex, 22 Sept. 2014, devex.com/news/technology-skills-training- critical-to-employ-low-income-youth-84377.
  • “2017 Median Pay.” U.S. Bureau of Labor Statistics, U.S. Bureau of Labor Statistics, 13 Apr. 2018, bls.gov/ooh/computer-and-information-technology/home.htm.
  • Grisham, Preston. “Press Releases.” CompTIA Information Technology, 3 Apr. 2017, comptia.org/about-us/newsroom/press-releases/2017/04/03/us-tech-sector-employment- approaches-seven-million.
  • Moritz, Katie. “How Does Technology Affect the Economy?” Rewire, Rewire, 18 Dec. 2017, rewire.org/our-future/technology-advances-economy/.
  • Soltan, Liz. “Digital Divide: The Technology Gap between the Rich and Poor.” Digital Responsibility, digitalresponsibility.org/digital-divide-the-technology-gap-between-rich- and-poor/.
  • Anderson, Monica. “Lower-Income Americans Still Lag in Tech Adoption.” Pew Research Center, Pew Research Center, 22 Mar. 2017, pewresearch.org/fact-tank/2017/03/22/ digital-divide-persists-even-as-lower-income-americans-make-gains-in-tech-adoption/.
  • “Blue-Collar Worker.” Wikipedia, Wikimedia Foundation, 23 Oct. 2018, en.m.wikipedia.org/ wiki/Blue-collar_worker.
  • Evans, Dave. “So, What’s the Real Difference Between AI and Automation?” Medium.com, Medium, 26 Sept. 2017, medium.com/@daveevansap/so-whats-the-real-difference- between-ai-and-automation-3c8bbf6b8f4b.
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Technology Impact on the Economy of the country. (2021, Oct 14). Retrieved October 26, 2021 , from
https://studydriver.com/technology-impact-on-the-economy-of-the-country/

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