The Future of Work

"The advocates for the adoption of new technologies and new ways of working highlight the opportunities that this will bring.  However, as this article makes clear, we must proceed with caution, for the changing working practices can also bring greater income inequalities and lower standards of living. "

The Future of  Work

 Introduction 

Throughout the world, the way in which we work is changing - technology, social media and ways of communicating are evolving – and new industries and business models are emerging. Traditional career models could become extinct and people could work in a variety of roles and for different organisations throughout their career. These developments will have a fundamental impact on how employers attract, retain and motivate a talented workforce. If a patchwork of employment represents the future, what will that future look like?  This article will explore this key question with a primary, though not a sole focus on the UK.

 Fluidity in the job market 

Today, driven by tremendous transparency in the job market, we often change jobs. The average baby boomer in the USA will be looking for a job 11.7. times in their career, according to the United States Bureau of Labour Statistics, and millennials change jobs every two years or less. Many of us work on a contingent basis, which has been made easier by the rise of the gig economy – an economy where employers contract with independent workers for short-term engagements through platforms such as Uber, Task Rabbit and Deliveroo. In June 2015, the FCSA (the UK trade association for professional employment services) reported that over one fifth of the UK’s workforce are individuals working on a contingent basis, with people from the youngest and oldest age cohorts making up the largest proportion of workers engaged in temporary employment and self-employment. 

These changes in the labour market have lead to structural reforms in many organizations.  With employers looking at ways to flatten their hierarchical structures, make jobs more dynamic, and further leverage contingent and contract labour, key questions arise: will less hierarchical structures make people more productive as they have more ownership over their work, as some people argue; what is the definition of a job and what roles do people vs. machines play?  These questions are based on the changing concept of a "job," where a ‘’job’’ that has protections like job title, level, and job description, is being eroded. What is its replacement? People being hired to "do work," get a project done, lead a team, and be ready to move on as business needs change?

 Already we are starting to see trends which will continue into the future, where salaried careers in hierarchical organizations are being replaced by an economy based on low wages and weak collective-bargaining rights - the poor working conditions for Deliveroo or Uber riders and drivers epitomize this. However, the fluidity of work can also be an opportunity and perhaps a necessity. This is crucial: for most people, driving on Uber is not even a part-time job… it’s just driving an hour or two a day, here or there, to help pay the bills.

 Furthermore, the economic and social theorist, Jeremy Rifkin, believes that the shocks that have been felt in the workforce, will soon become universal. He points to the millions of people in Europe and now in China producing their own electricity from solar and wind power at zero marginal cost and then selling some back to the grid. He suggests that a comparable revolution is about to happen in transport “with driverless, 3D-printed, fuel-cell powered, shared cars”. What he hopes the emerging platforms will inspire – and he sees no boundary to them in any industry or service – is a new openness and flexibility of ideas and career paths. BlaBaCar and Airbnb for example, exploit assets and skills that exist outside the company and this is a profound shift in what delivers value.  

 Robin Chase, the co-founder of Zipcar, also sees the changes in the way we work as an opportunity, and argues that “it seems strange to me that we would always recommend to companies that their revenue streams are diverse, yet for individuals, the smallest and most fragile economic unit, we say: you must only do one thing all your life’’.  Instead, Robin argues that a lot of the change in working practices, has to do with a transformed idea of freedom. When the older generation thinks of freedom it imagines it as autonomy, self-sufficiency, personal choice. Freedom is exclusivity.  But when the younger generation thinks of freedom, it is no longer about exclusivity, it is about inclusivity as the more networks they are in, the more social capital they establish, the more free they feel. To join social networks, people need to be trusted and vouched for to be accepted as part of the sharing economy. If they behave badly they are excluded - hence the importance of the review on Airbnb.  However, whilst on the whole I agree with Robin, I would also argue that in developed countries, that generational difference about ideas of freedom is also a glaring generational inequality in assets and opportunities.

 Automation of the labour market

 

 Way back in the 1930s, John Maynard Keynes prophesied that the term “technological unemployment” would become a familiar part of the language. The phrase described “our discovery of the means of economising the use of labour outrunning the pace at which we can find new uses for labour”. Or in other words, how technology could put us out of a job. Technology is automating work at an unprecedented rate, as artificial intelligence, sensors, and robotics become mainstream and boost productivity and convenience. There are for sure benefits to such technological changes.  Technology could improve diversity in the workplace, where technological accommodations could raise employment numbers for workers with disabilities for example; or by absorbing the routine aspects of our jobs, machines could free us up for more creative work and greater leisure time.  Yet, whilst this may be true, a very large fraction of the workforce is involved in more routine jobs, which are already being put at risk, for example by having driverless cars and trains and automated supermarket check outs.  A study by the McKinsey Global Institute predicted that by 2025, robots could jeopardize between 40m and 75m jobs worldwide.

 One issue that will loom ever larger, as the prevalence of automation increases, is inequality. Automation is fundamentally the substitution of capital for labour. The problem is that the people who already have the capital wealth are the ones who will benefit most, because they are the ones who will invest in the new automation. In other words, the rich will get richer without the rest of us partaking in this wealth.

 Income inequality vs the changing demands of the workplace

 Although there have always been differentials in income inequality, it has increased over the last 30 – 40 years and this issue is now part of mainstream political debate.  This raises the question of how policy makers encourage businesses to provide well paying jobs and benefits in the light of automation, contingent work, and restructuring of companies? 

 Today’s wave of technology has provided the lowest productivity improvement of any technology era.  So work has not gotten easier. Economists are quite worried about this, because a productivity decline reduces income growth, economic growth, and long term improvements in the standard of living.  However, whilst many economists believe the way we measure productivity is out of date, I think we really aren't more productive, we just feel like we are – where work (and home) have become more dynamic, disruptive, and somewhat overwhelming, with people spending more time on social media or on answering emails for example, which do not always have direct productivity outputs.

 The past five years have also seen a proliferation of online platforms that match employers (known in cloud-speak as “requesters”) with freelancers (often referred to as “taskers”), inviting them to bid for each task. The benefits for companies using these sites are obvious: instant access to a pool of cheap, willing talent, without having to go through lengthy recruitment processes. And no need to pay overheads and holiday or sick pay. For the “taskers” the benefits are less clear cut. Champions of the crowdsourcing model claim that it’s a powerful force for the redistribution of wealth, bringing a fresh stream of income and flexible work into emerging economies, such as India and the Philippines (two of the biggest markets for these platforms). But herein lies the problem - by inviting people to bid for work, sites such as Upwork, inevitably trigger a “race to the bottom”, with workers in Mumbai or Manila able to undercut their peers in Geneva or London thanks to their lower living costs. 

 The advocates for the adoption of new technologies and new ways of working highlight the opportunities that this will bring.  However, as this article makes clear, we must proceed with caution, for the changing working practices can also bring greater income inequalities and lower standards of living. This highlights the importance of ensuring that the benefits brought by these technologies and working practices must be implemented in a way that leads to greater equality, and employers, the government and the wider society must all play a part in ensuring this occurs.     

 

Amrita Rose is a Young Fabians member

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