Social impacts of technology and unemployment trends in the automobile industry

Social Impacts Brought by Technology and Unemployment Trends in the Automobile Industry

Over the last several years the auto industry has went through a tremendous contraction, as some of the established names of the past are struggling just to remain in business. In the United States the situation has become more traumatic, as the auto industry is a staple of the local economy for a number of communities. This is because one manufacturing plant will require an entire network of parts suppliers. In most cases, these companies are located within close proximity to the plant (either in the same community or possibly another city / state nearby). Once the economy begins to slow or there are some changes in the industry (such as technological innovations), this could mean that the plant will be forced to have layoffs. This will have ripple effects on the local economy, where many parts suppliers will be forced to engage in their own round of layoffs. Once this occurs, it will have an impact on many businesses, as they will feel the effects from declining consumer spending. At the same time, this can have an impact upon the local government. Where, they will begin to experience declining tax revenues and increasing demand for social services. (Jones, 2010) This is significant, because it shows the consequences of changes in the economy or how the introduction of new technology could have an effect on unemployment levels. As a result, this is causing changes to society, with persistent levels of high unemployment having psychological and sociological outcomes on many communities. To fully understand the impact of these changes requires: examining the consequences and if they are bringing new opportunities or threats to the sector. Together, these different elements will provide the greatest insights, as to the underlying impact that unemployment in the automobile industry is having upon society.

The Consequences of High Unemployment

Like what was stated previously, the auto industry has an interworking relationship with many of the different parts suppliers. This is because one organization will have a connection with various automobile companies. (Marinellini, 2008) if a single manufacturer begins to have some kind of a slow down and there are layoffs, the parts suppliers will be forced to engage in cutbacks as well. (Marinellini, 2008) When you introduce changes to the industry (such as: technological innovations), this will increase productivity. However, it will have a negative impact on the unemployment rate, as it will mean that a certain amount of workers will be laid off. A good example of this can be seen during the 1980's, with the Japanese implementing robots to improve productivity. This would place pressure on the American automobile manufacturers, as they were forced to layoff employees who were being replaced by robots. Over the course of time, this would have a negative effect upon the community. As the jobs that were lost cannot be replaced and the individual will more than likely have to be retrained. When you combine this with the possible effects of a recession (such as: a severe contraction in consumer spending), this will mean that many communities will see an exodus in the number of residents. While at the same time, experiencing a slowdown in business activity. Once this takes place, it can cause the standard of living in an area to go into a downward spiral. In this aspect, this kind of activity will have a negative impact upon society, by forcing large numbers of under skilled workers into the labor force. To effectively tackle this problem, some kind socially responsibly program that addresses the skills that are in demand will be required. At the same time, these people would need to have careers that they can go into after completing such training. (Marinellini, 2008)

Threats

The challenges of high unemployment facing the auto industry are having a ripple effect upon society. As far as threats are concerned, the changes that are occurring highlight how everyone must be prepared for sudden shifts in the marketplace. Where, many once thriving communities face the possibility of becoming ghost towns. A good example of this can be seen with Flint, Michigan. This was once a thriving middle class city of hard working General Motors employees. As the company slowly lost market share, the face of the town would change from middle class to one of cautionary tale. Where, homelessness and urban blight would become increasingly common. This is because the levels of unemployment would slowly eat away at the standard of living in the community, to the point that it would become an economic wasteland. In this aspect, Flint is a cautionary tale of underlying social threats that many cities and towns are facing. (Gerke, 2007) as a result, communities need to diversify in other sectors that can provide them with growth outside the production of automobiles such as: pharmaceuticals or green technology.