Over the last decade there has been an increasingly vibrant debate about the changing nature of work, its impact on people’s opportunities for well-paid jobs, the economic viability of the communities in which they live and how best countries can structure their economies, as well as their place in the global economy, to address the challenges and opportunities as we move forward.
These discussions have taken a broad view of the challenges by looking at not only the impact of technology and innovation in shaping future labour markets but also growing concerns over income inequality, the hollowing out of middle-class jobs, the rise of new forms of work and policies that have put downward pressure on wage growth and job creation.
The Director-General of the ILO, Guy Ryder, has taken a leading international role by creating a special initiative to address the Future of Work as part of its priorities as the organization approaches its centenary anniversary. Under his leadership, over 150 national consultations have already taken place that has brought together a diverse range of stakeholders to analyse and think through some of the key issues and responses.
As an important part of the UN system, the ILO has recently convened an important discussion at the United Nations during the newly formed Multi-stakeholder Forum on Science, Technology and Innovation for the SDGs (STI Forum) on the future of work.
The STI Forum is a central component of the Technology Facilitation Mechanism (TFM), created by the 2030 Agenda for Sustainable Development, in order to support the implementation of the Sustainable Development Goals (SDGs). The TFM facilitates multi-stakeholder collaboration and partnerships through the sharing of information, experiences, best practices and policy advice among Member States, civil society, the private sector, the scientific community, United Nations entities and other stakeholders.
The event, hosted by the ILO, brought together several key thinkers on the subject of the future of work for an open and challenging discussion on critical issues that are important for the success of our efforts in creating a better roadmap for the future of work. Below you will find a general outline of the discussions. For a more in-depth understanding of the issues, we encourage our viewers to watch the video of that meeting.
Moderator: Mr. Matthew Bishop - US Business Editor and NY Bureau Chief, The Economist• There is a growing divide between the work we want to do and the work that’s available in the future;
• The debate about what’s going to happen to work is only accelerating and becoming more intense over the last few years. “It does seem like we’re on the threshold of a dramatic shift through technology where a lot of the application learning will dramatically change what jobs are available and what new jobs need to be created.”
• Artificial Intelligence (AI) is increasingly replacing people from their work. From an economist’s perspective, it’s easier to imagine jobs that are destroyed than what will be created;
• Question to panellists: What is your vision in the next 10 or 15 years? How work is going to be changing?
Steven Berkenfeld • Right after the great recession, large corporations laid off tens of thousands of workers. The cuts were permanent. This was to rationalize their workforce based on productivity created by technology. Technology means automation;
Managing Director, Investment Bank, Barclays:
• We’re seeing companies do much more with much less (“continuous trend downward”). Many of them will require fewer and fewer workers;
• There will be a shift from full-time jobs to contingent work. From that, people will figure out a way to make a living. It will be very different than in the past when people had full-time jobs. These are reasons why we should be concerned about the future of work;
• Corporations are running under the “agency theory,” which prevents them from managing for a broader group of stakeholders. (“cultural incentive of laying off thousands of workers based on productivity”);
• The U.S. has a tax structure that gives preferential treatment to capital over wages and compensation. Even the ability to get a mortgage is tied to having a job instead of contingent work where you pull together a living;
• There’s a lot of corporate subsidies in the US that allow companies to treat their workers in a way that might be worse than in many countries. We have a minimum wage that results in people living at or close to the poverty line while using a government subsidy program like food stamps to bridge the gap in basic needs. In the U.S., people can be fired with minimal severance creating a great deal of insecurity among workers;
• Some economies are expanding and we’re potentially contracting which might have a big impact on the housing market.
Moderator: Provocative stuff indeed. And that’s the Wall Street view of the labour market.
Andy Stern • Change is inevitable. It’s actually progress that’s optional and it’s leadership that makes a difference. The concerns of massive changes has already risen to highest level of discussion;
Ronald O. Perelman Senior Fellow, Columbia University Law and Business School, and author of “Raising the Floor”
• I believe we are at a strategic inflection point for companies where there is a confluence of events which is forcing leaders to make big fundamental choices in order to move forward;
• So what we do know about the current changes in the economy:
o Uber, the largest taxi company, owns no vehicles;
o Facebook, the world’s most popular media owner, creates no content;
o Alibaba, the world most valuable retailer, has no inventory;
o Airbnb, the world largest accommodation provider, owns no real estate;
• A tsunami of technological change may wash over the entire world;
o When it comes to footwear and textile industries, there is a potential for automation to disrupt 80% of the jobs that exist within the next 15 years;
o In the US, self-driving trucks have the potential of putting millions of drivers out of work.
• Technology will continue downward pressure of pay and jobs, and by degree we’re creating a new normal. Work as a central part of an adult’s life will disappear;
• As countries search for ways to provide economic stability idea of giving everyone cash grants to increase stability and entrepreneurship. Countries are searching for ways to provide economic stability.
• Last major resource controlled: oil (Middle East). Next major resource will be data (US and Western Europe).
• “I’m pleased the ILO is taking on responsibility on discussing the future of work. Change is inevitable. It’s progress that’s really at stake.”
Prof. Sheba Tejani • I will bring a gender lens to the discussion of the impact of change in technology and technological growth on employment and women’s participation in the labour market;
Assistant Professor of International Affairs, The New School:
• The operating hypothesis for some time has been that mechanization will actually help women and reduce gender inequality. It will help by reducing the time women spend doing unpaid work at home and free them to seek paid work.
• However, we see that significant technological change is currently creating mixed outcomes. Women have participated in greater numbers in the labour force but the type of work they do is particular and segmented in nature, like sales, services, apparel manufacturing or labour intensive tasks;
• When we looked at globalization we saw the feminization of exported-oriented work. This was expected to be a long-term phenomenon;
• When we look at the trends in East Asia, production began to be more technologically intensive, using more high tech process which is resulting in the share of women’s participation in these supply chains beginning to nosedive.
• In East Asia and some in Latin American countries there is a strong negative relationship between labor productivity and share of women in the market. As women have been displaced, particularly in rich countries, they have entered the service center;
• Women are segmented in jobs that are low-paid, low value added, and they don’t have much of the share for higher value added jobs. We see that women are segmented in call-centers and long hour work that are low paid unlike jobs in R&D, software development, and other professions;
• Although technology created new types of jobs for women, we have to look carefully at what governance can do to reduce negative impact of segmentation of women in low-paid and low-value added work;
• Developing countries in general are concentrated in the lower end of global value chains. In some sense, developing countries are at a lower risk of having jobs outsourced. Even though routine tasks are potentially automatable, it’s not just a technical consideration but also an economic consideration. Levels of technology tend to be lower. But there are some sectors, like in textiles – like sewing machine operators, hand sewers, and assembly workers – are more likely to be replaced.
Moderator: “Strong case. This problem is not just a rich world crisis, but it will affect the rest of the world.”
Mr. Rick McGahey
Senior Vice President of Programs, Institute for New Economic Thinking
• There’s a lot of dispute about how fast the pace of change is taking place. There’s no question in most economists minds that this is a big issue;
• It’s not about technology per se but about ownership and output of the technology. We want technology, we want productivity. That’s been the trajectory for decades. The issue is one of capital. What’s happening to the output? Who gets it? Who gets a share? How technology works should not be confused with how the benefits of productivity are shared;
• Compensation grew at about the same rate as productivity since WWII (1949’s). Since 1973, productivity has grown about 43% faster than compensation;
• When you think about jobs, you think about tasks. The way we reorder those tasks into different jobs is the main issue;
• “What technology does is transform production process and stretch it in some way.”
• ILO always called for decent work which entails a fair share in the form of remuneration from the level of productivity. From a macroeconomic standpoint that’s a good thing. The real downside is that inequalities lead to slow growth;
• We’ve lost control of the sharing process. I don’t think that it will go to the economic output process. And that is the problem with technology.
Moderator: If we’re thinking about what we can do, what should be the agenda for institutions to grant decent work?
Rick McGahey• Shareholder pressure on supply chain where the gains are shared.
• More ownership shares and profit sharing in addition to wage packets.
Steven Berkenfeld• To paraphrase what Rick is saying, it’s not so much about technology, is about management. I find the construct somewhat misleading. In the US, we had this debate: Is it guns that kill people or people? It’s people with guns;
• I don’t think there’s a debate about whether technology is good or bad, it’s about how it’s manifesting itself in terms of corporate and economic policy to not only mitigate but how we extract the greatest benefit for the most people.
Moderator: Any suggestions on what we do to change the corporate perspective or how we can provide protection for people?
Steven Berkenfeld• We need a stronger and better safety net for people who are left behind. We need to stop focusing so much on skills training and supply of labour and focus more on the demand of workers.
Prof. Sheba Tejani• A standard view of a growing economy is that if labour productivity is higher than economic growth, then the number of jobs will decline over time;
• This trend is getting worse with time. There are sectors experiencing the highest rates of growth which are contributing less and less to total employment in the global economy. As for demand, demand is largely driven by the middle-class who have more purchasing power.
Moderator: What suggestions do you have for the policymakers on this issue?
Andy Stern• I think the time horizon becomes enormously important. There’s an economic and philosophical question here;
o Economic - There are two major choices in a world where there’s not enough work. You either guarantee jobs or guarantee money. As a trade unionist, the answer would be guaranteed jobs. Then all of questions arise on how society organizes itself. Jobs in care industry tend to go to women and people of color. So you give people money like a universal basic income;
- Philosophical - There seems to be more to life: we need more philosophers. The idea that work is the central work of an adult’s life is no longer absolute. What is our life supposed to be about? So far we’re not ready to answer that question.
• In the US, 50% of the population is in poverty. Let’s give everyone $1000/month and we’ll end poverty once and for all. But you have to find the money to redistribute the money.
Moderator: So what about skills training and how do we change the education system?
Steven Berkenfeld• There are two issues here. One is retraining, and second is how do we educate them? You can’t train a 50 year old to become a coder. And also who’s going to hire them? Education is obviously important and always will be. When a CEO says that there are jobs that we need people for and doesn’t follow that with “at the price I want to pay” is not being honest.
Prof. Sheba Tejani• The way to go forward is by rethinking our institutions and governance. This is more of a social issue than an economic issue. Our idea of work will undergo profound changes. We should look at technology as something socially useful.
Moderator: What is the number one priority to help us get through it? What would need to change to get there?
Andy Stern• We have a 20 year horizon to get it right. The philosophical question of greatness to live in the world where virtual reality provides everyone with a tour of the Louvre should be a gift and not a grave threat.
Rick McGahey• We need to look closely at the economy and the care economy in particular, to find new ways of creating jobs or sharing jobs. Envisioning a world where there’s no work is bad economically. So we will need to look at reducing hours of work and an increase in pay where everyone can work a little bit.
Steven Berkenfeld• You have to recognize that as far as the Luddites were concerned, those machines took their jobs. They were right. Maybe the economy will evolve through this, but the transition will be painful. We should be focusing a little more on technology as lifting the bottom than raising the top.
• A lot of this is wealth being concentrated with new technology. We should discuss about how to share the benefits in a more equitable way.
Prof. Sheba Tejani• We’re so wired to think about hard work without thinking about the end goal and without thinking about its importance. For women we view work as liberating. Work is only one part of what we do;
• We have to reimagine the types of work that’s considered productive. If we have some dramatic redistribution, it would be inconceivable to not have dramatic steps to rethink it. Perhaps it’s time now that we invent a system where these social costs are internalized. And one way is by redistributing.