A Social Safety Net for the Impact of Technical Change:An Evaluation of the Myers Committee's Adjustment Assistance Proposal

This paper assesses the ‘social safety net’ proposal of the Myers Committee Report on Technological Change as a programme aimed to ameliorate the losses of individuals adversely affected by technical progress. The point is made that, while the safety net is geared toward retrenched employees moving through the unemployment pool, much of the actual loss from unanticipated technical progress is taken as writ ten‐down capital values by immobile factor owners tied to the old technology. In the end, the safely net amounts to little more than increased unemployment benefits which do not compensate many of the injured parties. Moreover, by deviating from the standard unemployment benefits scheme in having their supplementary scheme internalize some of the costs of such benefits within the firm, the Myers Committee proposal thus hinders the very adjustment to technological change which one might have supposed the scheme would seek to facilitate.