The future of work — anxiety or optimism?
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The future of work — anxiety or optimism? |
I have always loved a good debate about the world, policy issues and even politics. However, these days when I get together with friends and family, this seems a lot less fun — largely because most of what we are talking about leads to pretty polarized discussions. Whether it’s about the rise of a new nationalism, Brexit, free trade and globalization, recent acts of violence and terror in places like France and Turkey, or the fact that 230 million migrants are on the move across the world, conversations can turn tense pretty quickly. All this points to a world that is undergoing major transitions. And there is more to come.
One such transition likely to impact millions of people in coming years is the change in how work is structured and how labor markets work. Already, the impact of technology is profound and particularly felt at a time of heightened anxiety over rising inequalityacross both the developing and developed worlds.
As with other topics, there are those who are intensely concerned about the future of work and others who are equally optimistic.
On the more pessimistic side, Thomas Friedman wrote in June in The New York Times: “We have globalized trade and manufacturing, and we have introduced robots and artificial intelligent systems, far faster than we have designed the social safety nets, trade surge protectors and educational advancement options that would allow people caught in this transition to have the time, space and tools to thrive. It’s left a lot of people dizzy and dislocated.”
The economic angst over increasing job losses is ever prominent. Over the last few months, continental Europe has seen nationwide strikes and violent protests in France against the government’s proposed labor laws and has highlighted workers’ fears for the future. At its core, the pending “loi travail” will make it easier for companies to fire people, which its backers say will make employment in France more flexible and create new jobs. But French unions and their supporters are convinced that “bons boulots,” or good jobs, will be lost forever. Under siege — not just in France — are hard-won protections for workers, such as five-day workweeks, health benefits, and insurance against workplace injuries and unemployment.
Former U.S. Treasury Secretary Lawrence H. Summers recently recalled that — several decades ago — only “stupid people” believed that technological progress could reduce employment. “If there’s more productivity, then people are going to have more money,” the “smart” argument went. “And if people have more money, they are going to spend it and then everybody’s going to be employed.” But now Summers says: “Suppose the stupid people were right. What would it look like?” In his view, it turned out, “that’s kind of what we did see.”
The gig and machine economies are starting to disrupt and displace the labor market as pointed out in EY’s The upside of disruption: megatrends shaping 2016 and beyond. With sharing platforms like Uber, Airbnb and TaskRabbit, the gig economy’s workers are just freelancers on temporary assignments. While in the machine economy, artificial intelligence, virtual reality and robotics have the capacity to flat-out eliminate jobs. Just think what driverless cars will mean to human employment.
Even highly skilled white-collar roles once considered immune to new technologies will be impacted. Algorithms have uprooted jobs in financial services with high-frequency trading and are starting to move into health care with robotic surgery.
The estimates of how many jobs will be lost in the gig and machine economies vary. Oxford University professors Carl Benedikt Frey and Michael A. Osborne have predicted that about 47% of total U.S. employment is at risk, with wages and educational levels mattering little. Meanwhile, a recent Organisation for Economic Co-operation and Development study argues that only 9% of all Americans face “high automatibility.” And for measure, the 2016 World Economic Forum report, The Future of Jobs, predicts that by 2020 a net total of 5.1 million white-collar jobs will be lost to disruptive labor trends.
Of course, these are all mere projections. But no matter what the final tally turns out to be, there’s no avoiding that business, government and society will face seismic shifts. Already, the gig economy is challenging government regulations covering hotels, restaurants, insurance, taxis and many other sectors.
The optimists about the future of work argue history shows that automation will surprise us by creating whole new industries and previously unimagined forms of work. In the early days of the computer revolution, for example, few saw the opportunities for web designers and app developers.
As Rana Foroohar, an assistant managing editor at TIME and author of Makers and Takers: The Rise of Finance and the Fall of American Business (2016), and others have argued, the platform technologies of the “sharing economy” might speed the transition from shareholder capitalism to a system that empowers labor and democratizes the workforce. Already, there are a growing number of digital cooperatives, like the new ride-sharing service Swift, which is owned and run by drivers themselves.
One idea attracting attention in the U.S. and Europe is the creation of a universal basic income (UBI) for all adults and children, regardless of their work status. As Sam Altman, president of the iconic start-up incubator Y Combinator, recently wrote: “I think it’s good to start studying [UBI] early. I’m fairly confident that at some point in the future, as technology continues to eliminate traditional jobs and massive new wealth gets created, we’re going to see some version of this at a national scale.”
In fact, UBI was on the ballot this summer in Switzerland. Despite the overwhelming vote against it, the idea is far from going away — with pilot UBI programs planned for Finland, Canada and the Netherlands.
Whether you are an optimist or a pessimist in the future-of-work debate, dramatic change is coming, faster than ever. There are many aspects — convenience, flexibility, lower cost, choice — that are benefiting consumers. But there are also some risks involved for society. Klaus Schwab of the World Economic Forum writes in his influential text The Fourth Industrial Revolution that “to prevent concentration of value and power in just a few hands, we have to find ways to balance the benefits and risks of digital platforms by ensuring openness and opportunities for collaborative innovation.”
What we need is less polarized debate and more constructive action. People in business, government and civil society must work together to deliver and exploit the many upsides of disruption, including creating whole new industries in the long term.
As Jamie Dimon, chairman and chief executive of JPMorgan Chase, said just this summer in his announcement of pay raises for 18,000 of the company’s employees: “We face many challenges. But they can be overcome by government, business and the nonprofit sectors working together to build on models of success that advance economic opportunity and create more widely shared prosperity.”
Source: Uschi Schreiber Chair, Global Accounts Committee & Global
Vice Chair, Markets at EY
Vice Chair, Markets at EY
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