1. William H. Bowers – whb108@psu.edu Ethics for the Information Age Chapter 8 – Work and Wealth

2. William H. Bowers – whb108@psu.edu Topics Introduction Introduction Automation & Unemployment Automation & Unemployment Automation and Job Creation Automation and Job Creation Working Less, Making More Working Less, Making More Effects of Increase in Productivity Effects of Increase in Productivity Workplace Changes Workplace Changes

3. William H. Bowers – whb108@psu.edu Topics Telecommuting Advantages Telecommuting Advantages Telecommuting Disadvantages Telecommuting Disadvantages Temporary Work Temporary Work Monitoring Monitoring Multinational Teams Multinational Teams IT Sector Unemployment IT Sector Unemployment

4. William H. Bowers – whb108@psu.edu Topics Foreign Workers in the IT Industry Foreign Workers in the IT Industry The Digital Divide The Digital Divide The “Winner-Take-All” Society The “Winner-Take-All” Society Access to Public Colleges Access to Public Colleges

5. William H. Bowers – whb108@psu.edu Introduction Overseas outsourcing Overseas outsourcing Cost of Indian technical service representative about 1/6 of US Cost of Indian technical service representative about 1/6 of US Simultaneous overseas telephone capacity now about 2.5 million calls Simultaneous overseas telephone capacity now about 2.5 million calls

6. William H. Bowers – whb108@psu.edu Introduction Cost savings can be overestimated Cost savings can be overestimated The economy is becoming globalized The economy is becoming globalized Digital divide Digital divide Unequal distribution of benefits Unequal distribution of benefits

7. William H. Bowers – whb108@psu.edu Automation & Unemployment Job Destruction Job Destruction –1979 -1994 43 million US manufacturing jobs lost –1947 manufacturing jobs were 35% of US workers –2002 manufacturing jobs accounted for 12% of US workers

8. William H. Bowers – whb108@psu.edu Automation & Unemployment Job Destruction Job Destruction –Manufacturing output has doubled since 1970 –1977 – it took 35 person hours to produce one automobile –1988 - 19.1 person hours per automobile

9. William H. Bowers – whb108@psu.edu Automation & Unemployment Lost white collar jobs Lost white collar jobs –Secretarial and clerical positions disappearing –Circa 1980 pharmacies filled about 8,000 prescriptions per day –Merk-Medco currently fills 8,000 per hour through a robotic, web-accessible pharmacy

10. William H. Bowers – whb108@psu.edu Automation & Unemployment Working harder, making less Working harder, making less –Between 1970 and 1990 average American working hours increased by 163 hours per year –Downsizing leaves fewer people to do the same amount of work

11. William H. Bowers – whb108@psu.edu Automation & Unemployment Working harder, making less Working harder, making less –Technology allows us to take work with us –We are coming full circle from cottage industries to home or partially home workers

12. William H. Bowers – whb108@psu.edu Automation and Job Creation While technology eliminates some jobs, it creates others While technology eliminates some jobs, it creates others Our economy is shifting from manufacturing to service and information Our economy is shifting from manufacturing to service and information

13. William H. Bowers – whb108@psu.edu Automation & Job Creation

14. William H. Bowers – whb108@psu.edu Service vs. Manufacturing Jobs

15. William H. Bowers – whb108@psu.edu Working Less, Making More Compared to 1900 we Compared to 1900 we Work fewer hours Work fewer hours Produce more Produce more Earn more Earn more Have access to a greater variety of jobs Have access to a greater variety of jobs

16. William H. Bowers – whb108@psu.edu Effects of Increase in Productivity US productivity doubled between 1948 and 1990 US productivity doubled between 1948 and 1990 We work more hours than in any society at any time in history We work more hours than in any society at any time in history –Mid 4th century Romans had 175 public festivals per year

17. William H. Bowers – whb108@psu.edu Effects of Increase in Productivity We work more hours than in any society at any time in history We work more hours than in any society at any time in history –Medieval English holidays totaled 4 months per year –Protestant work ethic –Time versus possessions

18. William H. Bowers – whb108@psu.edu Workplace Changes Technology has changed how we work Technology has changed how we work Organizational changes Organizational changes –Early automation of back office procedures such as payroll required no changes –Later integration of functions such as sales and inventory helped flatten organizations

19. William H. Bowers – whb108@psu.edu Workplace Changes Organizational changes Organizational changes –Information paths are no longer linear –Supply chain automation reduces paperwork and the need for people to process it

20. William H. Bowers – whb108@psu.edu Telecommuting Advantages Increased productivity Increased productivity Decreased absenteeism Decreased absenteeism Improved morale Improved morale Widens employee pool Widens employee pool

21. William H. Bowers – whb108@psu.edu Telecommuting Advantages Decreased overhead Decreased overhead Improves resilience through dispersion Improves resilience through dispersion Good for the environment through decreased commuting Good for the environment through decreased commuting Employees save money Employees save money

22. William H. Bowers – whb108@psu.edu Telecommuting Disadvantages Threatens control and authority of managers Threatens control and authority of managers Decreases or eliminates face to face interaction Decreases or eliminates face to face interaction Decreased information security Decreased information security Harder to schedule team meetings Harder to schedule team meetings

23. William H. Bowers – whb108@psu.edu Telecommuting Disadvantages Decreased employee visibility Decreased employee visibility Decreased contact with off site employees Decreased contact with off site employees Isolation of remote employees Isolation of remote employees Teleworkers work longer hours for the same pay Teleworkers work longer hours for the same pay

24. William H. Bowers – whb108@psu.edu Temporary Work Modern business environment changes rapidly Modern business environment changes rapidly Companies once boasted of no layoffs Companies once boasted of no layoffs Currently business environment relies on subcontractors and temporary employees Currently business environment relies on subcontractors and temporary employees Workers no longer rely on longevity, but on "knowledge portfolio" Workers no longer rely on longevity, but on "knowledge portfolio"

25. William H. Bowers – whb108@psu.edu Monitoring Tracking Internet usage Tracking Internet usage Monitoring telephone usage Monitoring telephone usage Checking email content Checking email content Computer file monitoring Computer file monitoring Keystroke capturing Keystroke capturing

26. William H. Bowers – whb108@psu.edu Monitoring 25% of UK companies have fired employees for improper Internet usage 25% of UK companies have fired employees for improper Internet usage A recent study showed that 30 - 40% of office Internet usage is not work related A recent study showed that 30 - 40% of office Internet usage is not work related

27. William H. Bowers – whb108@psu.edu Monitoring Monitoring can indicate need for training to improve quality or productivity Monitoring can indicate need for training to improve quality or productivity Can tailor information to a person's location Can tailor information to a person's location

28. William H. Bowers – whb108@psu.edu Multinational Teams Allows for around the clock operations without requiring multiple shifts Allows for around the clock operations without requiring multiple shifts Provides diversity and multiple viewpoints Provides diversity and multiple viewpoints

29. William H. Bowers – whb108@psu.edu Globalization Worldwide network of businesses and markets Worldwide network of businesses and markets Made possible by decreasing cost of IT Made possible by decreasing cost of IT

30. William H. Bowers – whb108@psu.edu Arguments for Globalization Increases competition Increases competition Increases employment in developing countries Increases employment in developing countries Poor countries become more prosperous through exports Poor countries become more prosperous through exports Interdependent countries are less likely to go to war with each other Interdependent countries are less likely to go to war with each other

31. William H. Bowers – whb108@psu.edu Arguments Against Globalization US should not be subordinate to the WTO US should not be subordinate to the WTO American workers are forced to compete with foreign workers who do not receive fair treatment, such as child laborers American workers are forced to compete with foreign workers who do not receive fair treatment, such as child laborers

32. William H. Bowers – whb108@psu.edu Arguments Against Globalization Causes loss of American jobs Causes loss of American jobs US subsidized businesses, such as farms can operate below cost and undercut foreign farmers unfairly US subsidized businesses, such as farms can operate below cost and undercut foreign farmers unfairly

33. William H. Bowers – whb108@psu.edu IT Sector Unemployment 1990's dot-com boom and speculation led to unnatural expansion 1990's dot-com boom and speculation led to unnatural expansion Early 2000 the bubble burst Early 2000 the bubble burst Silicon Valley lost 13% of non agricultural jobs, highest since the Great Depression Silicon Valley lost 13% of non agricultural jobs, highest since the Great Depression

34. William H. Bowers – whb108@psu.edu Foreign Workers in the IT Industry H1-B visas valid up to six years H1-B visas valid up to six years Hiring company must certify that no qualified Americans are available Hiring company must certify that no qualified Americans are available Foreign workers must be paid prevailing wage Foreign workers must be paid prevailing wage Prevalent in IT Prevalent in IT Quota reduced to 65,000 for FY 2004 Quota reduced to 65,000 for FY 2004

35. William H. Bowers – whb108@psu.edu Foreign Workers in the IT Industry L-1 visas L-1 visas Allows companies to bring current, foreign employees to US Allows companies to bring current, foreign employees to US Does not requirement of prevailing wage Does not requirement of prevailing wage

36. William H. Bowers – whb108@psu.edu The Digital Divide Disparity between those with technology and Internet access and those who do not Disparity between those with technology and Internet access and those who do not Exists between countries Exists between countries Social divide is between rich and poor within a country Social divide is between rich and poor within a country

37. William H. Bowers – whb108@psu.edu The Digital Divide Global divide Global divide –Poorer countries with little individual wealth –Inadequate telecommunications infrastructure –English language is not prevalent –Low rate of education and literacy –Country's culture does not make it a priority

38. William H. Bowers – whb108@psu.edu Internet Access by Region

39. William H. Bowers – whb108@psu.edu Social Divide Disparity in Internet access within a country Disparity in Internet access within a country 2000 survey of Internet use 2000 survey of Internet use –18 – 29 year olds – 66% –Age 65 and older – 13% –College degree – 74% –High school drop outs – 18% –Whites – 50% –Hispanics – 46% –Blacks – 35%

40. William H. Bowers – whb108@psu.edu Models of Technological Diffusion New technology is expensive New technology is expensive Price drops as technology matures Price drops as technology matures First VHS VCR cost $1,000 in 1977 First VHS VCR cost $1,000 in 1977 Price dropped 98.5% between 1976 and 2003 Price dropped 98.5% between 1976 and 2003 Normalization model Normalization model Stratification model Stratification model

41. William H. Bowers – whb108@psu.edu Critiques of the Term Digital Divide Promotes the idea of ‘haves’ versus ‘have nots’ as simply one of access Promotes the idea of ‘haves’ versus ‘have nots’ as simply one of access Ireland produces a great deal of IT products Ireland produces a great deal of IT products They are not high consumers of IT They are not high consumers of IT 1997 – Ireland’s telecommunications company held a contest to select and fund an “Information Age Town” 1997 – Ireland’s telecommunications company held a contest to select and fund an “Information Age Town” Winner was Ennis, a town of 15,000 Winner was Ennis, a town of 15,000

42. William H. Bowers – whb108@psu.edu Critiques of the Term Digital Divide $22 million prize ($1,200) per resident $22 million prize ($1,200) per resident Every business was provided with Every business was provided with –ISDN line –Web site –Smart-card reader Every family received Every family received –Smart-card –PC

43. William H. Bowers – whb108@psu.edu Critiques of the Term Digital Divide 3 years later, most IT was unused 3 years later, most IT was unused Benefits not fully explained or understood Benefits not fully explained or understood Formerly, unemployment claims filed in person, which also served social function Formerly, unemployment claims filed in person, which also served social function After new IT, applications filled online After new IT, applications filled online Many PCs later sold on the black market Many PCs later sold on the black market

44. William H. Bowers – whb108@psu.edu Critiques of the Term Digital Divide Social systems must support IT change Social systems must support IT change “Digital Divide” implies binary division “Digital Divide” implies binary division Access is actually a continuum Access is actually a continuum “Digital Divide” implies that lack of access is a disadvantage “Digital Divide” implies that lack of access is a disadvantage

45. William H. Bowers – whb108@psu.edu The “Winner-Take-All” Society The Declaration of Independence declares that “all men are created equal” The Declaration of Independence declares that “all men are created equal” We are not equal in society We are not equal in society What if we were all guaranteed the same income? What if we were all guaranteed the same income? “From each according to his abilities, to each according to his needs.” “From each according to his abilities, to each according to his needs.”

46. William H. Bowers – whb108@psu.edu The “Winner-Take-All” Society IT and efficient transport makes it easier for products to dominate world markets IT and efficient transport makes it easier for products to dominate world markets Network economies encourage people to use the same product Network economies encourage people to use the same product English has become the dominate language of business English has become the dominate language of business Business norms have changed Business norms have changed

47. William H. Bowers – whb108@psu.edu Harmful Effects of Winner-Take-All Increases the gap between rich and poor Increases the gap between rich and poor Attracts many people to lucrative, but socially unproductive work Attracts many people to lucrative, but socially unproductive work Creates wasteful investment and consumption Creates wasteful investment and consumption Competition for elite schools increases Competition for elite schools increases Less well known but good schools suffer Less well known but good schools suffer

48. William H. Bowers – whb108@psu.edu Reducing Winner-Take-All Effects Societies can enact laws limiting business hours Societies can enact laws limiting business hours Businesses can form associations with their own rules Businesses can form associations with their own rules Progressive and luxury taxes remove some incentives Progressive and luxury taxes remove some incentives Campaign finance reform reduces influence of the wealthy Campaign finance reform reduces influence of the wealthy

49. William H. Bowers – whb108@psu.edu Access to Public Colleges It is proven that in general more education equates to higher salaries It is proven that in general more education equates to higher salaries State’s funding of higher education has decreased since 1980 State’s funding of higher education has decreased since 1980 Tuition must make up the difference Tuition must make up the difference Tuition rise has outpaced income growth Tuition rise has outpaced income growth 63% of Americans believe education should be paid for by students and families 63% of Americans believe education should be paid for by students and families

50. William H. Bowers – whb108@psu.edu Ethical Analysis Should states make college available to all qualified high school graduates? Should states make college available to all qualified high school graduates? Requires state funding of difference between cost and ability to pay Requires state funding of difference between cost and ability to pay

51. William H. Bowers – whb108@psu.edu Utilitarian Analysis Goal of state is universal access Goal of state is universal access Cost to state may average 50 – 75% of actual Cost to state may average 50 – 75% of actual Average college graduate makes $20,000 per year more than a high school graduate Average college graduate makes $20,000 per year more than a high school graduate Difference over 35 years is almost $750,000 Difference over 35 years is almost $750,000 At a tax rate of 12%, this means $84,000 more in taxes paid At a tax rate of 12%, this means $84,000 more in taxes paid Graduates less likely to be jailed, unemployed, etc. Graduates less likely to be jailed, unemployed, etc.

52. William H. Bowers – whb108@psu.edu Utilitarian Analysis More graduates can lower the value of a degree More graduates can lower the value of a degree Other consumers of state resources can not pay their way Other consumers of state resources can not pay their way A degree does not guarantee success A degree does not guarantee success

53. William H. Bowers – whb108@psu.edu Kantian Analysis Perfect duty is fulfilled in all cases Perfect duty is fulfilled in all cases Imperfect duty is general, but not applicable in all cases Imperfect duty is general, but not applicable in all cases Is providing access to higher education a perfect duty, imperfect duty or neither? Is providing access to higher education a perfect duty, imperfect duty or neither?

54. William H. Bowers – whb108@psu.edu Social Contract Theory Analysis Rawl’s second principle of justice states that inequalities of income and wealth must be to everyone’s advantage and all qualified must have equal access to positions of responsibility Rawl’s second principle of justice states that inequalities of income and wealth must be to everyone’s advantage and all qualified must have equal access to positions of responsibility Greater education leads to positions of greater authority Greater education leads to positions of greater authority Children from poorer families have unequal access to education, therefore power Children from poorer families have unequal access to education, therefore power

55. William H. Bowers – whb108@psu.edu Questions & Discussion