Endnotes

THE NEW
DIVISION OF LABOR
FRANK LEVY AND RICHARD MURNANE

MASSACHUSETTS BENCHMARKS . . . . 26. . . . 2004 • VOLUME SEVEN ISSUE 1

 The authors of the book The New Division of Labor:
How Computers Are Creating the Next Job Market provide a brief summary of
its analysis and conclusions, and consider changes in the job market due both
to computerization of tasks and to offshoring of jobs.

W
Because the information can be handled by rules, board-
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e are coming out of a slow economic recovery,

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much like the “jobless recovery” of 1992–94. ing passes increasingly are issued by self-service kiosks rather
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As in that recovery, we will eventually return than by desk agents.

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to full employment. But it will be full employment with a In the current economy, there is one more piece to this
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different set of jobs—the jobs lost to computerization and story. When a job can largely (but not completely) be de-
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to other countries are not coming back. That is the essence scribed by rules, it is a good candidate for sending offshore
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of our recent book—how computers are driving long-term because it can be described to another person with minimal
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change in the U.S. job market and in the skills the job risk of misunderstanding. In manufacturing, an extreme
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market now demands. example is Boeing’s design of aircraft modules using CATIA,
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The book begins by explaining where computers sub- computer-assisted design software. CATIA’s output is a set
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stitute most easily for human labor. Begin with the fact that all of instructions, “rules,” for computer-controlled machine
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work involves the processing of information—a financial analyst tools. Some of these machine tools are located in China and
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reading a spreadsheet, a chef tasting a sauce, a sales-person Japan and Italy, because Boeing knows the parts will fit when
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reading the expression on a customer's face, are all processing they are returned for final assembly.
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information in deciding what to do next. Computers excel at Similarly, a call-center interchange is largely described in
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those tasks in which the information processing can be rules when all relevant information can be written down in
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scripts but the interchange requires the flexibility of human

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described as a series of logical rules (“rules-based” processing)

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or as the recognition of simple patterns. An example of a conversation. (If the interchange does not require the flexibility
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rules-based task is the job of issuing a boarding pass to an of conversation, the call can be handled by speech-recognition
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airline passenger: software.) The point is that with notable exceptions—e.g.,

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software programming—offshoring is largely accelerating what

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• Identify the passenger by reading the account technology was already doing.
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number on her credit card. Of course, many jobs require information processing
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that cannot be described in rules, processing that is more

• Does the number on the credit card match a
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accurately described as complex pattern recognition. Surpris-

reservation in the database (yes/no)?
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ingly, these jobs fall at both ends of the wage spectrum.

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• If no, reject the request. The lowest-paid service jobs require processing optical infor-
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• If yes, does the passenger have a seat assignment mation and executing physical movements that are very easy
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in the database (yes/no)? for most human beings but very hard to program—e.g.,
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walking across an unfamiliar room that is filled with furniture.

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• If no, show her the available seats and prompt Similarly, higher-wage sales, professional, and managerial
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the customer to choose one.

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jobs require one or both of a pair of cognitive skills that

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• If yes, complete the transaction. computers cannot replicate.

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2004 • VOLUME SEVEN ISSUE 1 . . . . 27 . . . . MASSACHUSETTS BENCHMARKS

 Figure 1
The U.S. Adult Occupation Distribution: 1969-1999
Occupations listed in order of increasing average pay

One of these cognitive skills is expert thinking, the ability Lower-paid service jobs like janitors require extensive
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to solve new problems that cannot be solved by rules. (If the optical recognition that is very hard to program—e.g., mak-
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problem could be solved by rules, a computer could do it.) ing sense of what you see when you enter a new room. Sales
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New problems run the gamut from doing research to fixing a occupations continue to grow because the act of selling involves
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new problem in a car (not covered in the manual) to creating complex human interaction. But the greatest job growth will
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a new dish in a restaurant. continue to be concentrated in higher-skilled technical, pro-

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The second cognitive skill is complex communication, fessional, and managerial occupations, work where the required
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the ability not only to transmit information, but to convey problem solving and human interaction cannot be described
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a particular interpretation of information to others in jobs in rules. Not all of those higher-skilled occupations will be
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like teaching, selling, and negotiation. If a student gets a immune from competition, but that is where the major job
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calculus lesson from the Internet, the student will literally growth has been and will continue to be.
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have the information. But there is no guarantee that the In educational terms, the evolving job distribution under-
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student will understand the information she is receiving. It lines the need to learn not just facts but the relationships that
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takes a good teacher to present the information in a way connect the facts. When many people have access to Google,
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that allows the student to translate the information into knowing who signed the Declaration of Independence is not
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knowledge she can apply. highly valued. Knowing the Declaration of Independence’s
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Complex communication is equally important in sales. history is highly valued because it enables a deeper under-
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Customers who know exactly what they want can order from standing of governmental institutions. Compared to many
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a Web site without human intervention. But a customer who other states, the Massachusetts MCAS tests are more geared
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requires convincing needs subtle human contact. A good to understanding relationships among facts rather than listing
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salesperson is constantly modifying his argument as he reads facts per se. In this sense, it appears that state educational
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the customer’s facial expression, and listens to the customer’s reforms are moving in the right direction to prepare students
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questions and the tone of voice the customer uses. That kind to work in a computerized world.
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of selling is very hard to express in rules and so it remains a

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human endeavor.
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FRANK LEVY is the Daniel Rose Professor of Urban Economics in the MIT
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When these ideas are put together—i.e., where compu-

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Department of Urban Studies and Planning and is a member of the

ters can and cannot substitute—it becomes easier to under-
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Massachusetts Benchmarks Editorial Board.

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stand why the occupational distribution is being hollowed out

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RICHARD MURNANE is the Juliana W. and William Foss Thompson

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(as demonstrated in figure 1). Professor of Education and Society at the Harvard Graduate School of
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Education.
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The biggest relative losses are occurring in the lower

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middle of the distribution: assembly-line work, clerical jobs THEIR BOOK IS PUBLISHED BY THE PRINCETON UNIVERSITY PRESS, IN
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PRINCETON, N.J.
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typically held by high-school graduates, and jobs that are

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relatively easy to describe in rules.

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MASSACHUSETTS BENCHMARKS . . . . 28 . . . . 2004 • VOLUME SEVEN ISSUE 1