Table of Contents
Statement of the Problem
With the growing speed of information technologies revolution, the issue of technologies and their impacts on social inequality is becoming much more urgent. Most economists agree that the United States is facing the growth in wage inequality (Steelman & Weinberg, 2005). According to Steelman and Weinberg (2005), “average and median wages have changed little since the mid-1970s, but real wages in the bottom 10 percent of the wage distribution fell sharply during much of this period” (p.4). New technologies replace low-skilled workers as organizations are striving to increase their profits by all means. Information technologies facilitate organizations’ transition to a new level of productivity and performance and at the same time greatly contribute to the expansion of the so-called “digital divide.” Eamon (2004) describes the digital divide as the growing disparity between those, who can access and use information technologies and those, who have no such an opportunity. These inequalities in the access and use of information technologies accompany the well-documented patterns of social stratification in the United States and the rest of the developed world (Eamon, 2004).
The recent trends in the digital divide suggest that those, who are more affluent and better educated, are more likely to acquire the latest technologies (Haan, 2003). Not surprisingly, technologies are claimed to further exacerbate the existing social and class inequalities. However, the lack of access to IT by marginalized social groups is not the sole factor of rising social inequality. Today, the growing social and wage inequality is also associated with other factors including, changes in the value of minimum wage (Card & Dinardo, 2002). At the same time, computer skills are believed to play a far greater role in social inequality than the simple presence of computers at home or at work. These differences in skills are never absolute; they are gradual (Haan, 2003). Thus, are there technologies truly responsible for the rise in social and wage inequality and how can these problems be solved?
The relationship between computer technologies and social inequality, including wage inequality, is one of the most popular topics in contemporary research. It has become quite popular to analyze computer technologies impacts on various social processes and patterns. Researchers develop different theories to explain the rise on social and wage inequality at the end of the 20th century. According to Aghion, Howitt and Violante (2002), many theoretical papers identify technological change as the primary basis for the rapid expansion of social and wage inequality in the developed world. One possible explanation to the technology mediated social and wage inequality is that new technologies generate a skill bias (Aghion et al., 2002). In other words, new equipment and technologies benefit the workers with predetermined skills (those, who have better skills and are more educated), thus increasing their wages and generating an even greater wage divide. Another possible explanation to the relationship between computer technologies and wage inequality is that businesses naturally strive to increase their productivity and profits (Aghion et al., 2002). As a result, they purchase new technologies and equipment that complements workers’ skills and abilities in the most important occupations (Aghion et al., 2002). These technologies further increase the demand for skilled workers, which also benefit from the growing wages against the lack of growth and development for those, who do not possess such skills.
These assumptions are further supported by Steelman and Weinberg (2005): the researchers argue that it is technology development that should be held responsible for the growing inequality in wage structures.
Computer technology substitutes for workers in performing routine tasks that can be readily described with programmed rules, while complementing workers in executing non-routine tasks demanding flexibility, creativity, generalized problem-solving capabilities, and complex communications. (Steelman & Weinberg, 2005, p.5)
Simply stated, technologies replace those workers, who perform routine tasks that can be easily performed by computers and new equipment, while strengthening the workplace and social position of those, whose skills and abilities cannot be replaced. This is why technologies account for almost 90 percent of increase in demand for college-educated workers (Steelman & Weinberg, 2005). The demand for skilled workers outpaces the availability of skilled labor force – the trend, which is also explained by technical and technological changes. Greenwood (1999) writes that information technologies streamline corporate structures by reducing the number of workers engaged in information processing. Firms want to maximize their profits, which is not possible without effective information processing and management (Greenwood, 1999). Modern technologies can successfully cope with most information processing tasks, thus eliminating the need to keep dozens of administrators, supervisors, clerks and secretaries (Greenwood, 1999). Firms no longer need dozens of sales agents and representatives (Greenwood, 1999). Information technologies can easily unite dispersed organizational units around their core tasks and capabilities. Most likely, the use of new technologies instead of human labor will enable firms to substantially increase their productivity in the long run (Greenwood, 1999).
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It seems that no occupation or profession is fully secured from technology-mediated inequality risks. Aghion et al. (2002) suggest that technologies are becoming more general, thus increasing the transferability of skills across different economy sectors. Individuals, who can use computers for programming or data processing, can find a well-paid job in almost any sector of economy, while also replacing the workers, who do not have such skills (Aghion et al., 2002). At the same time, technologies are becoming much more compatible and organizations find it easier to build novel information processing systems using the existing technological capital; as a result, more unskilled workers face a risk of unemployment (Aghion et al., 2002).
Modern researchers keep to different beliefs as to the relationship between computer technologies and income and wage inequality. Haan (2003) provides an overview of two different strands in the IT-inequality research. On one hand, information technologies are governed by and further contribute to social inequality, because those, who are richer and better educated, will always be first to acquire and use the new IT. In addition, the patterns of computer use are influenced by gender and age, as well as by size and type of households (Haan, 2003). On the other hand, the social inequality that grows from the computer technologies’ use is not eternal (Haan, 2003). Haan (2003) assumes that with the growing diffusion of new technologies, social inequality will first increase but later decrease. Considerable disagreements exist as to the way technology-mediated inequalities develop and evolve, but most researchers agree that the digital divide does exist and greatly contributes to wage and social gaps.
Attewell (2001) writes that poor and minority populations are less likely to have computers and access to the Internet at home, compared to their counterparts. Between 1994 and 2000, the race gap in the access and use of technologies considerably widened (Attewell, 2001). Today, more families can afford to own and use a computer; and race is no longer the chief factor of the social inequalities in computer use. The digital divide is shifting to the lower fifth of the income distribution ladder, making families with less than $15,000 annual income particularly vulnerable to the risks of computer deficits (Attewell, 2001).
Still, not all researchers agree that computer technologies are responsible for the growing social and wage divide. Card and Dinardo (2002) suggest that only some of the early trends in social inequality could be attributed to technologies, whereas the latest changes in the social and wage structure have been driven by other, relatively mundane factors. Card and Dinardo (2002) criticize the popular theories of technological develop and wage inequality, because they divert professional attention from other, no less essential factors. For example, changes in the real value of the minimum wages and their implications for wage inequality should not be ignored (Card & Dinardo, 2002). Reallocation of labor and the decline of unionization also can help to explain these changes (Card & Dinardo, 2002). Despite these disagreements, an emerging consensus is that information technologies are relatively unimportant in everything that relates to social and wage inequality. It is not computers but skills that play a crucial role in closing the existing social divide, and modern researchers support widely this claim.
Greenwood (1999) writes that skills greatly facilitate the adoption of new technologies. Eamon (2004) claims, that only skilled students and workers can expand their computers learning and workplace potentials. Steelman and Weinberg (2005) are confident that increased emphasis on skills acquisition and education is the best response to computer-generated social inequality. Based on Attewell (2001), it is naive to expect that the computer technologies provision will automatically eliminate the risks of the second digital divide. Recent experiences with the development and implementation of various computer-based projects confirm the importance of skills. Attewell (2001) writes that the modern society is excessively optimistic about the value of hardware and software in schools and in the workplace. Most schools and many employees fail to benefit from the use of computers, because they do not possess even the basic knowledge. In schools, teachers often do not have time to train themselves on computer technologies (Attewell, 2001). Many schools find it too expensive to hire a computer technician, who would teach children to use the benefits of information wisely (Attewell, 2001). Employees, who do now know how to use computers, will hardly improve their workplace productivity. This is why Haan (2003) says that the success of the technological revolution cannot be measured only in terms of possessing a personal computer and having access to the Internet. What matters is the level of digital skills (Haan, 2003). Eventually, computer proficiency will define who is ahead and who is bound to stay at the very bottom of the information society (Haan, 2003). All these findings suggest that state policies should provide both computer technologies and trainings to ensure that these technologies are used properly and for the society’s benefit.
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The current state of research provides compelling evidence that the developed world is undergoing a profound change in its wage and social structures. However, these changes have not been uniform. The wage and social gap is growing. Steelman and Weinberg (2005) claim that the real wages at the very bottom of the wage structure have fallen sharply since the end of the 1970s. Most researchers support the fact that the rapid rise in the use of technologies has led to so-called skill bias, when skilled workers have better chances to benefit from technologies and new equipment than the workers, who do not possess a good level of education and skills (Aghion et al., 2002; Card & Dinardo, 2002; Greenwood, 1999; Steelman & Weinberg, 2005).
There is no better situation with the use of computers at home and for education. Affluent individuals and households are much more likely to obtain and use the newest technologies than individuals and households at the very bottom of the social hierarchy (Haan, 2003; Eamon, 2004). Although the IT-induced gap between students with low and high income was slightly reduced, major inequalities in IT access and use by adolescents continue to persist and parallel those of adults (Eamon, 2004). About 15% of adolescents in low-income families do not have an access to computers, compared to only 3% of adolescents in affluent families (Eamon, 2004).
Still, the main finding is that computer ownership by itself is of minor importance. It is computer skills that generate and can be held responsible for the growing social and wage gap. Computers alone may even exacerbate the existing social inequalities, if they are not accompanied by the development of adequate information technology skills (Attewell, 2001). Eamon (2004), Greenwood (1999), Attewell (2001), and Haan (2003) support the need for the development of better computer skills in all individuals and population groups. These skills will increase children’s and adults’ education, employment and earning opportunities, thus reducing the scope of social and wage inequality in the long run (Eamon, 2004). Individuals, who can use information technologies and benefit from them, will have greater chances to become a part of the country’s civic and social life (Eamon, 2004). State policies should be based on skills acquisition and not be limited to the provision of computer technologies in education and workplace. This is the main recommendation local and state authorities should follow in their striving to minimize the existing social inequities.
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The evidence that computer technologies contribute to social inequality is quite compelling. No less compelling is the assertion that skills are much more essential than technologies. In other words, and according to Attewell (2001), it is naive to believe that computers alone will help eradicate social inequality. Based on these findings, the proposition that governments and authorities should implement programs to advance individual computer skills sounds particularly valid. Such investments will bring considerable economic and social returns in a long-term perspective, through better productivity, improved quality of labor force and reduced unemployment (Eamon, 2004). Individuals, who possess excellent computer skills, will have better chances to find a decent employment and apply their efforts in more than one industry sector (Aghion et al., 2002). Skill-based policies and practices will limit the risks of inappropriate use, mainly among children and adolescents; without appropriate skills, the use of computer by children and adolescents is likely to be limited to gaming and unsupervised Internet practices (Attewell, 2001).
However, not all researchers agree with the crucial role of information technologies as a driver of social inequality. The relationship between computer technologies and social inequality is quite complex and can be moderated by more than one factor. Card and Dinardo (2002) may be right, when they say that the growing consensus over the relationship between computer technologies and social inequality diverts public attention from other phenomena. Therefore, the ways in which computer technologies impact social and wage inequality should be thoroughly reviewed. Future researchers will have to account for all major and minor influences that could have contributed to the present-day digital divide. The success of the proposed skills-based policy solutions will greatly depend on the outcomes of the future research. Researchers need to have a complete picture of the current wage and social inequality and its relation to the digital divide; and only future studies can help resolve the existing dilemmas.
The basic intent of this research was to explore the relationship between computer technologies and social inequality. The body of evidence that computers contribute to social and wage inequities continues to expand. Technologies replace unskilled workers in low-paid occupations, while those who have excellent education and computer skills strengthen their workplace positions. More affluent households have better access to the newest technologies, which also increase the social gap between them and the poorest population groups. Still, computers cannot be held responsible for what has happened to the social and wage structures; rather, it is the lack of appropriate computer skills that further expands the existing social cleavage. Future policies should help individuals to develop better computer skills. Such programs will greatly reduce the risks of the second digital divide. At the same time, future researchers should explore other drivers of social inequality and factors that can moderate the relationship between computers and social inequity.
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