What are the implications of new types of information technology for organized labor? Should labor unions embrace the use of new information technology?

Introduction

The emerging technology is transforming the work environment in terms of creation of new opportunities and creating a labor market that is more inclusive , innovative and even global. More specifically, the new ICTs are having an impact on employment as an industry where jobs are created and as a way of empowering workers by providing new work forms, in better flexible manner. On the other hand, changes in technologies can disrupt organized labor especially in labor relations management as some workers resist such changes and others accept and even facilitate it. The emergence of the new technology means that machines are replacing human in some areas and this creates a divide between organized labor and such changes. However, the labor unions should embrace the new ICT application in the workplace and work towards benefiting from it.

Implications of new technologies on organized labor

Technology comes with changes in how things are done, and this renders some skills redundant, increases the need for retraining employees, while the workers develop an ambivalent attitude towards the new innovations.  The new technology has been met with resistance from workers and labor unions even though over the long-term, it has led to a rise in wages and productivity.  ICT has faced the same response from the workers and their unions. The unions are have raised concerns on loss or reduced bargaining power associated with mobile capita as workers try to adjust to the  ICT changes.  While insiders have attempt to maintain the status quo, the ICT has opened outside and global sourcing which has labor mobility and access to virtual labor access which matches capital mobility (Seo et. al 2012).

The emergence of new technology has implication on organized labor in terms labor demand, wage distributions and the working environment.  The changes in technology means that changes will have to be experienced in the labor markets, in decisions making and the performance of different tasks in organizations. The emerging computer systems come with new functions that involve regularization of white collar jobs, which are also formed into a routine (Piore & Skinner, 2015). Some tasks considered simple and repetitive are more likely to be regularized or made into routines than idiosyncratic and difficult ones and this means that decision making has been shifting from human to computers in bureaucratic works.  Decisions that that were associated with individual transactions and operational actions have had to be aligned to computerization (Piore & Skinner, 2015). On the other hand, task that need creativity, creativity and exceptions are less likely to computerize that tasks that are repetitive and well-defined. The automated computer technology has seen various tasks such as clerical work becoming redundant. In addition, new technologies means that firms or workers who have been affected have to invest in new equipments or tools and training so as to remain relevant for a specific job or task.  Other than the firms, ICT leads to higher productivity and output and hence, economies of scale to workers in terms of higher benefits and wages (Piore & Skinner, 2015).

With continuous emergence of new technologies, some firms may experience technological shock and this raises the demand for workers with high skills and in turn thus increases demand for such workers relative to the supply in an economy. This means the wages for specialists and high-skilled employees rises relative to unskilled or low-skilled works (Bresnahan, Brynjolfsson, & Hitt, 2002). The effect is an increasing wage inequality in the market between the skilled and low skilled or unskilled workers over the long term.  Other workers will have to retrain or acquire more education so as to have a higher bargaining power and hence, command high wages.  The relationship between workers’ wages and technology depends on the effect of technological change on the industry rent since and the ability of every skilled group to have that rent (Bresnahan, Ifsson & Hitt, 1999). In the organized labor market, also affects the employment dynamics. In a competitive market that has specialized skills, the effect of technological change and ICT depends on the speed at which the skilled labor supply can respond to demand changes. If the wage gap between various skilled groups rises relative to skilled labor supply the skilled labor demand will have decreased relatively slower (Bresnahan, Ifsson & Hitt, 1999).

In addition, technological changes affect the wage and labor structure, and especially in terms of employment. The ICT changes means there will be higher level of automation which affects the manufacturing employment and related wages. The automation leads to a reduction in manufacturing employment and this puts a lot of pressure production workers who are already being paid low wages as their demand reduces.  Another effect is a decreased unionization which makes inequality higher as production workers wages reduce due to lower bargaining powers (Holtgrewe, 2014). In addition , the ICT changes comes with mire globalization of organized labor markets and this means that workers are no  longer measures against local standards of skills and professionalism. The globalizations come with setting of new standards against which the skilled workers abilities and professionalism and abilities are measured across the world. The growth of ICT allows constant information flows and which means that markets have to accept foreign standards on skills which differ for theirs (Holtgrewe, 2014).

The growing professionalism and increased global competition related to constant technological competition provides an environment in which labor unions are not able to meet the needs of firms and workers. The result is a more worker discontent and the related union decline. Unionization becomes irrelevant and just a leftover from the past industrial period so that currently, they are a hindrance to competitiveness of firms and market and the professionalism that defines the labor market.

Labor Unions should embrace use of new technology

This discussion implies a new environment for labor unions, whose main traditional role has been to protect the interest of workers in regard to job security, wage rates, working environment and various social benefits. The new changes brought by technology have led to a constantly deteriorating support for labor unions basically due to uncertainties that organizations will use less costly and more effective technologies to replace jobs (Holtgrewe, 2014).  The unions should understand that firms embrace new technologies in order to gain efficiency, competitiveness and higher profitability.  The new technologies come with a shift in productive capital – production technologies – but the human abilities are normally limited to brain power and also physical strength. The labor unions should embrace the new changes and at the same time, endeavor to restore or improve the bargaining power of their members in terms of wages and working conditions (Edwards & Ramirez, 2016). The labor unions represent a movement whose foundation is bargaining with business owners for higher wages for less or same tasks.

 If the labor unions need to serve the interest of working population, they should change their strategy in order to align with the new changes. They should embrace technology while transforming the organized labor to be participating in ownership of production processes. This means that play their roles that includes making life easier by way of participation in the progress and growth of global economy by facilitating technological changes.  Through this, the labor unions can manage to widen their functions, renew their members and even reverse the unionization decline.  To counter the challenges of wage inequality and loss in employment resulting from emerging ICTs, the unions should encourage their members to acquire improved technological skills to remain competitive and seek to have them participate in the benefits from such changes (Edwards & Ramirez, 2016).

Moreover, the labor unions can use the available social –political institutions and labor policies to get involved in the internal organization structure of a firm (Guppta, 2016). While this may not be easy, the unions can work as negotiation partners in coming up with solutions for challenges arising from new technologies aimed at improve productivity and operations.  They should encourage the involvement of workers in the process of adopting new highly performing work systems (Guppta, 2016). This is based on the premise that employees can be of great help in improving the competitiveness of an organization.  This implies forming relationships in the process of reorganizing production in line with ICT or new technologies (Guppta, 2016). This works to the interest of workers since the new technologies can improve their productivity and organizational profitability. This can be used as a basis for increasing the bargaining power for the workers.

Reference

Bresnahan, T. F., Brynjolfsson, E., & Hitt, L. M. (2002). Information technology, workplace organization, and the demand for skilled labor: Firm-level evidence. The Quarterly Journal of Economics, 117(1), 339-376.

Bresnahan,T.F., Ifsson, E.D., Hitt, L.M.,(1999).Information Technology and Recent Changes in Work

Organization Increase the Demand for Skilled Labor

Seo, H. J., Lee, Y. S., Hur, J. J., & Kim, J. K. (2012). The impact of information and communication technology on skilled labor and organization types. Information systems frontiers, 14(2), 445-455.

 

Piore, M., & Skinner, D. W. (2015). Labor Standards and Worker Organization Strategy.

 

Holtgrewe, U. (2014). New new technologies: the future and the present of work in information and communication technology. New technology, work and employment, 29(1), 9-24.

Edwards, P., & Ramirez, P. (2016). When should workers embrace or resist new technology?. New technology, work and employment, 31(2), 99-113.

Guppta K., (2016).Will Labor Unions Survive In The Era Of Automation? Retrieved from: https://www.forbes.com/sites/kaviguppta/2016/10/12/will-labor-unions-survive-in-the-era-of-automation/#488952c03b22