Employment Lessons from the Electronics Industry

By Alic, John A.; Harris, Martha Caldwell | Monthly Labor Review, February 1986 | Go to article overview
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Employment Lessons from the Electronics Industry


Alic, John A., Harris, Martha Caldwell, Monthly Labor Review


Employment lessons from the electronics industry In the U.S. electronics industry, competition--domestic as well as international--has led to increases in labor productivity through changes in product design and automation and to transfers of manufacturing operations to low-wage developing countries. For example, in the consumer electronics industry, annual output of color television sets per production worker in the United States increased from 150 in 1971 to 560 in 1981. Total output nearly doubled, from 5.4 million sets to 10.5 million. At the same time, domestic employment in color television manufacture dropped by half--a result of greater foreign value-added, redesigned televisions with fewer parts and less need for assembly labor, and automation. The example is not atypical, the implications are clear: new technoloy can cutinto job opportunities even though output rises substantially.

In two other sectors of the electronics industry--microelectronics (which includes semiconductors) and computers--employment has grown rapidly. (The 1985 layoffs will, as in earlier business slumps, prove temporary.) Microelectronics technology made redesigned color television sets possible, and far more Americans now work for semiconductor manufacturers than were ever employed in consumer electronics. Skilled and professional jobs predominate in microelectronics, accounting for nearly 60 percent of employment, compared with about 30 percent in consumer electronics. Similar patterns exist elsewhere in high technology electronics: continuing advances in both products and processes leave relatively fewer openings for unskilled and semiskilled workers. Indeed, jobs for production workers in U.S. computer firms declined slightly during 1984, although overall employment in the computer sector rose.

American consumer electronics firms have faced stiff foreign competition since the latter part of the 1960's. But only in the last few years have U.S.-based microelectronics and computer manufacturers found competitors from Japan able to match their product offerings. Given declining advantages in product technology, and Japan's proven capabilities in process technology, American manufacturing companies have been forced to change their priorities. Within any manufacturing organization, quality and productivity, hence costs and competitiveness, depend on the integration of workers and machines into an eficient and effective production system. highly automated plants will demand new ways of using skills, resolving conflicts, and making decisions. The emphasis on shared responsibility and decision-making in Japanese organizations appears to give them a head start in integrated production systems. Japan's manufacturers are more adept at utilizing the skills and capabilities of their work force, and are further along at integrating workers and machines--an important source of competitive advantage.

In a given industry, job opportunities change with demand for the industry's products, with shifting patterns of international competition, and with increases in labor productivity. The latter stem not only from automation and work reorganization, but from products redesigned for easier, cheaper manufacture. Rising worldwide demand for the output of a given industry will create new jobs only if demand rises more rapidly than productivity. From the perspective of a national economy, net job creation also depends on trends in imports and exports and on foreign and domestic investments. Imports may displace domestic production; overseas investment by domestic companies may do the same.

In any economy, new jobs are continually being created, old jobs eliminated. At the level of the firms, jobs are created as companies are established or expand, and jobs disappear as companies atrophy and die or move production overseas. Over time, automation, work redesign, and organizational change help fewer workers produce more.

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