Off the Waterfront: The Long‐Run Impact of Technological Change on Dockworkers
| DOI | http://doi.org/10.1111/bjir.12224 |
| Date | 01 June 2017 |
| Published date | 01 June 2017 |
British Journal of Industrial Relations doi: 10.1111/bjir.12224
55:2 June 2017 0007–1080 pp. 225–273
Off the Waterfront: The Long-Run Impact
of Technological Change
on Dockworkers
Zouheir El-Sahli and Richard Upward
Abstract
We investigate how individual workers and local labour markets adjust over a
long time period to a discrete and plausibly exogenous technological shock,
namely the introduction of containerization in the UK port industry. This
technology, which was introduced rapidly between the mid-1960s and the late-
1970s, had dramatic consequences for specific occupations within the port
industry. Using longitudinal micro-census data, we follow dockworkers over a
40-year period and examine the long-run consequences of containerization for
patterns of employment, migration and mortality. The results show that the job
guarantees negotiated by the unions protected dockworkers’ employment until
the guarantees were removed in 1989. A matched comparison of workers in
comparable unskilled occupations reveals that, even after job guarantees were
removed, dockworkers did not fare worse than the comparison group in terms of
their labour market outcomes. Our results suggest that job guarantees provided
a safety net which reduced the cost to workers of sudden technological change.
1. Introduction
Technological change can have dramatic and long-lasting eects on the
labour market.Some industries, occupations or locations decline, whileothers
expand as a result. This restructuring causes job loss and the displacement of
workers from the declining industries or occupations, with consequent losses
of employment and earnings for those whoare displaced. Studies of displaced
workers’ earnings confirm that these losses are considerable. For the UK,
to which this article refers, Upward and Wright (2015) find long-run losses
(10 years after displacement) in wages and employment which amount to a
Zouheir El-Sahli is at Aix-Marseille University. Richard Upward is at the University of
Nottingham.
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2017 John Wiley& Sons Ltd.
226 British Journal of Industrial Relations
permanent reduction in earnings of about 10 per cent.1As well as the financial
cost, there are also long-lasting eects on other worker outcomes, such as
morbidity (e.g. Black et al. 2012), mortality (e.g. Eliason and Storrie 2009)
and family break-up (e.g. Eliason 2012).
Until recently, the literature on job loss did not consider the underlying
cause of the displacement. It is therefore dicult to evaluate the adjustment
cost of specific technological developments which may simultaneously
aect many firms, an entire industry or occupation. This is because such
technological changes often occur relatively gradually, or because they are
dicult to isolate from other changes which are occurring at the same time,
or because the shocks may be themselves determined by the structure of
the labour market. A recent exception is the work of Autor and co-authors
(e.g. Autor et al. 2014), which considers the eect of increased imports from
China on workers’ patterns of earnings and employment. Autor et al. show
that workerswhose industries were subsequently exposed to increased import
competition from China experienced large and long-run losses in earnings,
as well as greater rates of job loss. They argue that labour market rigidities
prevent workers moving to new labour markets, industries or occupations,
and this rigidity prevents the cost of the trade shock from being disbursed
across workers more generally. This article follows a similar approach. We
consider a group of workers who were exposed to a sudden, well-defined
and arguably exogenous technological shock, namely the introduction of
containerization to UK ports. We follow those workers over a long period
of time (eectively their entire working lives) and examine their patterns of
employment, unemployment and other labour market outcomes relative to a
matched control group.
Containerization changed the UK port industry profoundlyin the space of
only a few years, starting in the late 1960s. Figure 1 shows the percentage of
all containerizable UK trade that was transported in containers from 1966
onwards.2Within just 10 years of the appearance of this new technology,
80 per cent of all relevant UK trade was being movedin containers.3The new
technology was massively more capital intensive, and its introduction led to
a sudden decline in the use of port labour, in particular those workers who
loaded and unloaded cargo, known as stevedores, dockers or longshoremen.
Containerization also brought increased economies of scale and a greater
concentration of port activity (Hall 2009). Older ports which were unsuited
to the requirements of the new technology (such as deep water, road and
rail networks) declined while new ports expanded quickly in more suitable
locations. London was one of the largest ports in the world before the
advent of the container, and suered a particularly dramatic decline.The port
districts in East London lost some 150,000 jobs between 1966 and 1976 due
to the closure of the London Docks, around 20 per cent of all jobs in the
area.4
Beyond the eect on the port industry itself, containerization also aected
other industries which were traditionally located near ports. Hoare (1986)
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2017 John Wiley& Sons Ltd.
O the Waterfront 227
FIGURE 1
Containerization Penetration in UK Trade.
Measured as TonnageMoved in Containers as a Percentage of Total ContainerizableTrade.
[Colour figure can be viewed at wileyonlinelibrary.com]
0
10
20
30
40
50
60
70
80
90
100
% containerised trade
1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980
Source: Adapted fromBernhofen et al. (2016).
claims that, in 1964, 40 per cent of all UK exports originated within 25 miles
of their port of export, and two-thirds within 75 miles.5Containerization and
the associated development of rail and road networks meant that warehouses
and manufacturers no longer needed to locate near ports.
Our approachin this article is to measure the cost of the technological shock
to incumbent workers. Weuse district-level and individual-level census data to
follow dockworkers (and various comparison groups) in England and Wales
over a 40-year period from 1971 to 2011 to measure the long-run eect. We
also consider the likely spillover eect on local labour markets, rather than
just those workers directly aected. Our study bears some similarity to, and
uses the same data as Fieldhouse and Hollywood(1999), who study the eects
of the collapse of the UK mining industry during the 1980s.6They find that
only one-third of men in mining occupations in 1981 were in employment in
1991. In contrast, half of men in the same age group who were not in mining
occupations in 1981 were in employmentin 1991. Their results suggest that an
industry-level collapse in employment can have extremely large employment
eects even after 10 years.7
As well as allowing us to follow workers over a very long time period,
the census data also have the advantage that they track workers regardless
of their labour market state. Typically, administrative data which come from
social security records (such as that used by Jacobsonet al. 1993) only contain
C
2017 John Wiley& Sons Ltd.
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