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Volume 5,
No.4 |
The New Ice Age REVOLUTIONS OLD AND NEW In the mid-18th century England began to experience what the British economic historian Arnold Toynbee referred to as the Industrial Revolution. This phenomenon combined labor with steam and water-powered equipment in factories using assembly line methods of production. The application of scientific principles served to mechanize production processes greatly enhancing the productivity of labor and providing more goods for expanding markets. Textile production was an important example of industrial expansion in this new era of capitalism. The U.S. textile industry expanded in both domestic and foreign markets. This industry was also the first to employ women outside the home in relatively large numbers. By the end of the 18th century the new technology and "secrets" of the Industrial Revolution had been brought to the United States. Manufacturers and government officials in England had attempted to prevent the spread of this knowledge to other nations, realizing that significant economic advantage could be gained by monopolizing it. However, these efforts were unsuccessful as "enterprising" persons sought private gain in new ventures elsewhere. Further motivation was provided by foreign governments offering remuneration for new technological knowledge. The Industrial Revolution began the age of industrial capitalism arising out of the application of science to the production of goods. Today’s economy is experiencing a new revolution, and is expanding based on new scientific applications to the production of information and related services in the new age of:
This new ICE age will truly be of glacial proportions. It will cover the globe, and pervade every home and every industry. And increasingly, it will be the persons possessing the necessary skills to implement and relate new functions and processes who will be in the greatest demand. These are Peter Drucker’s "knowledge workers." Workers already are or soon will be performing tasks which involve information, communications, and require overall higher levels of education. Just as the technology of the Industrial Revolution greatly enhanced worker productivity in mills and factories, the new technology, information technology (IT), will change the very nature of how business is done. It will make business more efficient, faster, and will expedite all aspects of business transactions. The productivity of workers will soar. The problem is that we are not able to adequately measure productivity gains in the area of interrelated services. Obviously, word processing, and using and sharing information, is done much faster and more efficiently with computers compared to the days of typewriters and traditional mail. With typewriters, a letter would be typed, mailed, received and read within, say, 72 hours. With capital equipment in the form of computers and e-mail, the elapsed time between typing and reading might be just minutes. A 72 hour process has now been reduced to just a few minutes. And in case background information needs to be gathered, the Internet is immediately available, saving time which formerly would have been spent in a library or other research facility. How is this increase in productivity to be measured? Who or what is to be credited with the increase? We know that communications systems get faster and more efficient every day, and that education must be continuous in order to keep up with change. However, the measurement of the gains and to whom or to what to attribute them is a problematic issue. Wages will increase, but to determine their appropriate rate of increase to match productivity gains requires more adequate measurement techniques. Projections made by the Bureau of Labor Statistics of the 10 fastest growing occupations from 1998–2008, are the very areas which are based on information, communications, and education. See the table below.
Overall employment is expected to grow by 14.4 percent between 1998 and 2008: from 140.5 million persons to 160.8 million. (The share of women in the labor force is projected to rise from 46 to 48 percent between 1998 and 2008.) Employment by education and training categories is expected to grow by 31.2 percent for those having Associates degrees. In the Bachelor’s degree category, growth is expected to be 24.3 percent and in the Work experience plus bachelor’s degree category by 17.5 percent from 1998–2008. Occupations in the Postsecondary vocational training category are expected to increase by 14.3 percent, in the Work experience in a related occupation category by 11.8 percent, and in the Long-term on-the-job training category by 8.7 percent. Grouped in this way, these occupational categories represented 43.4 percent of all occupations in 1998, and are projected to represent 44.5 percent by 2008. THE EARNINGS OF WORKERS 1998 Median hourly earnings of all wage and salary workers 16 years of age and over was $9.11. White workers, both male and female, earned more than Black and Hispanic workers in their respective categories. However, Hispanic female workers earned the highest percentage (87.6 percent) of what Hispanic male workers earn, followed by Black females (86.9 percent), and White females (81.8 percent). This measurement is the earnings ratio: $W/$M (Women’s Earnings divided by Men’s Earnings) as shown in the following table.
MEDIAN USUAL WEEKLY EARNINGS (MUWE) OF MEN AND WOMEN In the U.S. in 1998, median usual weekly earnings (MUWE) of full-time wage and salary workers 16 years and over were $523. Women’s earnings were 76.3 percent of those of men, $456 and $598, respectively.
In Illinois, women’s earnings were 76 percent of those of men, $487 compared to $641. Illinois ranked thirteenth, with Washington, D. C., topping the earnings list for women at $582. For men, Alaska and Connecticut tied for the earnings leadership at $766. Illinois was seventh, with earnings for men at $641. Turning to occupational categories in 1998, we find the MUWE currently for all workers was the highest for those in the Managerial and professional specialty area at $759. In the Technical, sales, and administrative support group, median earnings were $477, and in the Service occupations, earnings were $327 as shown in the next table.
As noted, earnings are highest for all workers in the Managerial and professional specialty category. The difference is that men have the highest earnings in the Executive, administrative, and managerial category ($915), while women’s earnings are the highest within the Professional specialty classification ($682). This classification includes physicians, scientists, and engineers. At 90.8 percent, the earnings ratio is highest for women in the Service, except private household and protective classification which includes health, food, and cleaning services. The Bureau of Labor Statistics (BLS) expects that employment in the period 1998–2008 will increase most rapidly in the Professional specialty category (27 percent), followed by Technicians and related support (22.2), Service occupations (17.1), Executive, administrative, and managerial (16.4 ), and Sales (22.2 percent). In 1998 these jobs represented 55 percent of total employment, and by 2008 they are estimated to represent 57.5 percent. THE EARNINGS RATIO OVER TIME If we look at earnings changes over time, we find that women’s earnings have improved both absolutely as well as relative to those of men. The earnings ratio improved by nearly 19 percent between 1980 (64.2 percent) and 1998 (76.3 percent) as shown in the next table. Over that time period we see that women’s earnings continually increased, while overall those of men declined. From 1980 to 1998 across different age groups, the earnings ratio for women also increased. The largest gains were made in the 35–44 age group where the ratio improved by almost 26 percent, and in the 45–54 age group where the ratio improved by almost 24 percent. This information is shown in the following table.
Can we expect these observed changes to continue? Will women continue to improve their earnings ratio relative to men? We must wait to find out. But all workers can better prepare themselves for the new ICE Age. Education and training are the essential requirements in an age shaped by a technology dominated by information and communications. In this time, workers’ productivity will increase, and value will be found in what people know rather than specifically what they do. References:
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| Dr. Lee F. Sundholm is a professor in the School of Business at North Park University in Chicago. In addition to the changing role of women in business and management, his areas of interest include the application of economic analysis to business management and the management of knowledge and information. |
Last update: May 1, 2001