How the internet is transforming employment

July 31, 2012

Free Market Foundation

The Internet has profoundly affected labour markets, according to a study by Harvard University economist Richard B. Freeman.

Using U.S. government data from 1998 through 2001, Freeman found that workers who used the Internet on the job worked 5 percent longer hours than those who didn’t although he could not state whether the extra hours worked were productive.

He also found that people who use the Internet at work get paid more although that advantage will probably decline as more workers go on line.

In 1997, only 17 percent of workers ages 18 to 65 used the Internet at work but by 2001, the proportion had jumped to 41 percent.

A person in Russia or India has the same access to American job listings as someone in the United States and since the Web allows workers to do business from their homes, there is little to stop foreign workers from taking an “American job” without even moving there.

Freeman also sees the Internet transforming how labour unions operate making it easier to entice new members and sell workers on their services.

Source: Margaret Popper, Economic Trends: Doing a Job on Labour, Business Week, October 28, 2002.

For more on Technology and Productivity http://www.ncpa.org/iss/eco/

FMF Policy Bulletin \7 November 2002