In the first part of this series I discussed the effects of the Industrial Revolution on employment. In this segment I’ll conduct a similar analysis of the Digital Revolution. For purposes of this discussion by “Digital Revolution” I mean the widespread adoption of computers which I would reckon as between 1983 and the present. The reason I pick 1983 as the start of the Digital Revolution is that the IBM PC had been introduced in 1981. IBM’s dominance gave corporations permission, as it were, to use personal computers but there were three developments in 1983 that supercharged the adoption of personal computers. One was the introduction of the IBM XT, a substantial enhancement to the PC, a second was the release of Lotus 1-2-3, the first “killer application” on the IBM PC/XT, and the introduction of the Apple IIe which I would mark as the predecessor of the Mac.
There are reasonable alternative start dates for the “Digital Revolution”. In the 1960s the penetration of computers was largely limited to the largest companies. The ARPAnet, the prototype Internet, was limited to colleges, government, and a few laboratories when it was introduced in the 1970s. I think the real start date is when desktop computers and their “killer apps” took root in the economy and the society.
I want to emphasize that in this post I am going to focus on the effect of the Digital Revolution on work in the United States not globally. While the global impact may be even more important than the impact on work in the U. S. it is beyond the scope of this post.
As I noted the Industrial Revolution shifted substantial numbers of jobs from agriculture to industrial sectors but that is not its most significant effect. It actually changed the nature of work, from primarily agriculture to primarily manufacturing and services.
The Digital Revolution has
- eliminated many routine/manual jobs and reshaped service and clerical roles
- created new digital and tech-enabled occupations
- changed the nature of work dramatically
Jobs Eliminated
The Digital Revolution has resulted in the elimination of 7 to 12 million jobs, particularly in
- manufacturing
- clerical/administrative support
- retail support roles
- routine bookkeeping and office jobs
- telephone operators and related categories
In 1983 U. S. manufacturing employment was roughly 17 million; it is roughly 13 million at present. A substantial share of those jobs were lost to automation and digitization. It was not completely due to offshoring although the Digital Revolution facilitated offshoring of manufacturing jobs but any discussion of that is beyond the scope of this post.
Between 1983 and the present almost 4 million clerical jobs were eliminated, largely having been automated by word processors, spreadsheets, and database programs. When I started working, roughly sixty years ago even small companies employed clerk typists, bookkeepers, and other clerical workers.
| Category | Jobs eliminated |
| Secretaries/typists | ~1.4 million |
| Bookkeepers/accounting clerks | ~1.2 million |
| Switchboard/telecom operators | ~0.25 million |
| File clerks, mailroom, clerical support | ~0.8 million |
or a reduction of about 3.6 million clerical jobs.
Digitization in the form of scanners, point-of-sale terminals, inventory automation, and eCommerce has also affected jobs in retail. According to the Bureau of Labor Statistics that has eliminated between 1.2 million and 1.5 million retail support and cashiers’ jobs.
There has also been a decline in transportation jobs and jobs in printing/publishing due to digitization of about a half million.
All told it is estimated that between 7 and 12 million jobs have been eliminated as a consequence of the Digital Revolution.
Jobs Created
Like the Industrial Revolution before it the Digital Revolution has created more jobs than it has eliminated. It is, however, difficult to estimate how many jobs have been created because they are distributed across the economy.
In the technology sector 7 to 8.5 million jobs have been created consisting of the 5 to 5.6 million jobs created in software publishing and the information technology sector, the .5 million to 1.5 million jobs in telecommunications and Internet services, and the .5 million to 1 million jobs created in electronics, semiconductor, and computer hardware.
In eCommerce, logistics, warehousing, and distribution 5 million jobs have been created consisting of more than 2.5 million jobs in warehousing and fulfillment, more than 1.5 million in parcel delivery and logistics coordination, and more than 1 million in eCommerce corporate and operational roles.
Something like 3.5 million to 5 million jobs have been created in professional services that did not exist prior to the Digital Revolution including digital marketing, cybersecurity, data science, IT consulting, computer-aided healthcare roles, and business services based on analytics.
Finally, something like 3.5 to 4 million jobs have been created in the gig economy, creator economy, and remote digital freelancers.
These categories are not mutually exclusive, and some overlap is unavoidable; the purpose here is to establish scale rather than produce a perfectly partitioned taxonomy.
All told 15 to 20 million jobs have been created in the United States as a consequence of the Digital Revolution.
Discussion
In 1983 there were roughly 93 million jobs in the U. S. By 2023 there were something like 156 million jobs in the U. S. for an increase of something like 64 million jobs. A reasonable guesstimate is that the Digital Revolution accounts for about 25–30% of all new jobs in that period. The jobs eliminated were mostly highly routine and more jobs were created than destroyed. The jobs eliminated were overwhelmingly located in the U. S. while the jobs created were both in the U. S. and offshore. The jobs in the section above are U. S.-located jobs only. In addition millions of jobs were created offshore but that is a topic for another post. The bottom line is that the Digital Revolution replaced millions of Americans doing routine tasks
with millions of foreign workers performing new digital tasks and millions of domestic workers performing new nonroutine tasks.
That was not entirely benign. Middle-skill jobs fell sharply. High-skill jobs rose sharply. Low-skill service jobs rose somewhat. The offshoring of jobs resulted in creating a wage ceiling on IT wages at all but the topmost levels, back-office administrative jobs, and telephone support wages. That in turn tended to increase income inequality in the U. S. There were other causes as well but that, too, is beyond the scope of this post.
There is another important difference between the Industrial Revolution and the Digital Revolution which is the pace of the change. The Industrial Revolution in the United States took place over something between a century and a century and a half while the Digital Revolution has taken place over about a 40 year period, in one working lifetime. This compression of disruption into a single working lifetime sharply constrained the ability of educational institutions, labor markets, and political systems to adapt.
In the next post in this series I will discuss the present Artificial Intelligence Revolution.
Sources:
BLS Current Employment Statistics
BLS Occupational Employment Statistics
Census IPUMS microdata
Daron Acemoglu & Pascual Restrepo, “Robots and Jobs: Evidence from US Labor Markets” (Journal of Political Economy, 2020)
David Autor, David Dorn, Gordon Hanson, “The China Shock” (American Economic Review, 2016)
David Autor, Frank Levy, Richard Murnane, “The Skill Content of Recent Technological Change” (QJE, 2003)
Autor & Dorn, “The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market” (AER, 2013)
Others to a significantly lesser degree
The Challenge of Artificial Intelligence: Part I—the Industrial Revolution
Discussing the Industrial Revolution never includes the Agricultural Revolution that made it possible.
Crops did not suddenly become self sufficient – sowing and harvesting themselves. Fewer workers were needed for these jobs. These newly unemployed agricultural workers were available for employment in new industries.
The new products were not possible prior to the Revolution. The output was limited because the available workers was limited. Automation increased the output, and workers were free to pursue other employment.
Improvements in agriculture allowed a larger population to be fed. Improvements in cloth weaving, allowed a larger population to be clothed. Improvements in manufacturing, allowed a larger population to be housed.
It is never easy. Some people do suffer, but in the long run most people benefit. The Digital Revolution and AI Revolution are no different. New products and services will be developed because there are unemployed workers available.
Regarding the loss of jobs due to the Digital Revolution. Those workers should have been employed in new automated factories making new products. They were not. Instead, foreign serfs were used. If a surcharge was levied on imported goods to equal the cost of overhead on US workers, automated factories would be the norm.
Cotton picking was done by manual labor, until the Civil Rights era, and them, machinery was developed to automate the process. If imported agricultural workers no longer available, somebody would develop machinery to automate the process.
I will leave AI for your next post.
Weelll, thereby hangs a tail. What you’re referring to as the “Agricultural Revolution” took place over an even longer period and included developments in Classical Antiquity and what have been termed “the Dark Ages”. But the notion that important things happened and invented during the “Dark Ages” runs counter to the Protestant narrative so it’s ignored.
Water-driven mills were invented in Classical Antiquity. The wheeled plow and three-crop rotation were invented in the “Dark Ages”. Not to mention the cuckoo clock.