Looking at the shorter-term impacts, then, it’s possible to see a range of approaches to this turbulence in the world of work. Government have options, largely about whether to intervene in labour markets to influence work outcomes, or not. But employers are also moving to new strategies not out of goodwill but through self-interest.

These options, highly simplified, are shown in the matrix (Figure 2), which contrasts laisser-faire approaches with interventionist approaches.

Figure 2

fig2

Source: Andrew Curry/The Futures Company

The race to the bottom: This laisser-faire option operates on the principle that labour market flexibility is the secret to increased employment in a globalised labour market. In practice, nearly all countries have increased flexibility and permitted more casualised work over the past decade – even somewhere with a strong tradition of labour protection such as Germany. The evidence increasingly suggests, however, that the pursuit of low value jobs leads to a vicious cycle of low productivity, low investment, low growth, and low tax and social contribution from business.

This policy approach also involves government subsidy to employers, as low-paid workers are supported by state payments. In the United States, a study showed that the fast food sector was effectively subsidised to the tune of $6 billion because its low paid workers were dependent on food stamps and subsidised housing. Increasingly this looks like a political choice that is no longer supported by economic evidence.

Enlightened self interest: It appears that employers who pay better and create better working environments do better financially. Walmart is a relevant case. Over the last decade, its share price has been broadly stagnant, while Costco has outperformed it “by a considerable margin”, in terms of sales, earnings or stock market returns. One reason: according to HBR, far lower staff turnover means knowledge is kept in the company – and drives customer engagement. Such employers also invest in technology to enhance the performance of their staff, using each to complement the other. The Spanish retailer Mercadona similarly invests heavily both in training and stock management systems.

Wages and labour performance are also becoming part of businesses’ reputational capital. See, for example, the increasing success of the UK Living Wage campaign in signing up large companies as “living wage employers”. The public sector can encourage this, for example by giving tax breaks or other forms of support to companies who deliver such commitments, and sharing evidence of business benefits.

Keeping the market honest: Turning to more interventionist approaches, the state can take the view that it wants to drive unscrupulous low-wage employers out of the market as a way of driving up standards and investment (because low-wage, employers are unlikely to commit to training, and have little incentive to invest in capital equipment, which reduces productivity.) This leads to approaches such as enforcing (and increasing) minimum wages, both through regulation and legal frameworks, and also through public procurement rules.

Such a policy complements the “enlightened self-interest” approach by removing free-riders from the market. Although conventional wisdom has argued in the past that minimum wage legislation costs jobs, this seems to be a weaker effect than claimed.

Re-imagining work: Much of our intervention in the labour market is driven by a view that it creates social goods, both from an economic perspective and also from a social perspective (over a long period studies have shown that worklessness produces adverse psychological and physical effects). But it is possible that such findings are linked to a set of “modernist” social values that are rapidly giving way to “post-materialist” values. Certainly, people with some income and a degree of social capital who do not have to work find worthwhile things to do, including volunteering. This is part of the argument for the Basic Income: that as we move to the “post-industrial” world envisioned by Daniel Bell, in which skills are more embodied in personal knowledge, that encouraging traditional work is no longer the only, or the best, way to get the social benefits from productive engagement.

The rise of the basic income: Until very recently, the idea of a basic income, a minimum sum paid to all people regardless of their work status, was right of the fringe of political discourse. But it has been moving rapidly towards the mainstream. The idea has deep roots:  George Bernard Shaw promoted it as “a vagabond’s wage” a century ago.

The analysis in this provocation helps to explain why. It is a policy idea that helps to improve outcomes whether the technologists or the sceptics turn out to be right. And in the meantime it helps to shore up economies, and individuals, that are struggling in the slow readjustment of labour markets.

If the “robots” hypothesis is right, we’ll need a basic income to make the economy work (markets need people who can afford to buy products). If the market power argument is right, then basic income keeps employers honest, by ensuring they have to pay good enough wages, in good enough conditions, to attract and keep their workers. One interesting side effect is that it would mean that our fundamental notions of the value of paid work could be about to shift, for the first time since the Industrial Revolution. A recurring feature of the ICT era has been that questions of power and politics have frequently been diagnosed as issues of technology. The future of work is just the same.

  • andrew_curry
    • Patrick Harris

      Thanks Andrew. In the Alan Winfield piece, I note in his closing that what he actually likes the sound of is a Basic Income, but that this is rather more utopian in his eyes at present. That said, I’ve heard of the concept Basic Income in more conversations lately than ever before. It feels more ‘sticky’, less politically motivated and when you consider increased automation, perhaps it is also more achievable – and more necessary – than ever before.

  • andrew_curry

    At Boundary2 there’s a provocative review of Brynjolfsson and McAfee’s book The Second Machine Age, by Frank Pascale. A couple of extracts:

    “What’s missing from the book are the new wave of conflicts that would
    arise if those at very top of the value chain (or, less charitably, the
    rent and tribute chain) were to be replaced by robots and algorithms.”

    Or again:

    “B&M appear to assume that such data will be owned by the
    corporations that monitor their own workers. For example, McDonalds
    could train a camera on every cook and cashier, then download the
    contents into robotic replicas. But it’s just as easy to imagine a legal
    regime where, say, workers’ rights to the data describing their
    movements would be their property, and firms would need to negotiate to purchase the rights to it.”

    http://boundary2.org/2015/01/20/to-replace-or-respect-futurology-as-if-people-mattered/

  • Caroline Jones

    Interesting take in this article from BBC on part time working – I wonder if attitudes to part time working really are changing or whether actually companies actually say one thing (that they support it) but practically do another (don’t support it)

    http://www.bbc.co.uk/news/business-30655926

  • Caroline Jones

    Sunday Times 22.02.2015 http://www.thesundaytimes.co.uk/sto/newsreview/features/article1521787.ece
    Andrew Keen’s book “The Internet is not the Answer” was highlighted in the UK Sunday Times this week. In it he suggests that we are on the edge of catastrophe and cites Carl Frey and Michael Osborne of the Martin School in Oxford who warn that 47% of all jobs in America and the UK are at risk because of computerisation. He suggest that Big Data may well to be to blame for the destruction of livelihoods as we know it. This is “automation anxiety” on a big scale. Frey and Osborne are not lone voices – Stephen Hawkins, Bill Gates, Eric Schmidt all warn that there will be a race between computers/artificial intelligence and human endeavour is the in the next 25 years. Some are predictions are pretty negative for example Oxford’s Future of Humanity Institute suggested that the probability of artificial intelligence bringing the world to an end is as high as 10%. Thankfully the threat however does not seem to be immediate – think 1,000 years. What is certain is that connected data and synchronisation of information will dramatically impact the work place. Traditionally stable professions like accountancy, the legal profession even doctors may well be vulnerable to computerisation and white collar workers will have to create new ways to fill their time/make a living. These ideas however are not new – after all John Maynard Keynes was predicting technological unemployment as far back as 1930. Andrew Keen may well be right however in suggesting we have to think differently about what we, or our children, will do in the future.

  • http://johnJsills.com John J Sills

    Nice (12 minute) TED talk on the workforce in 2030, and the growing mismatch in labour force supply & demand…

    http://www.ted.com/talks/rainer_strack_the_surprising_workforce_crisis_of_2030_and_how_to_start_solving_it_now?language=en

  • andrew_curry

    Good piece on a recent US debate in which Larry Summers and David Autor challenge the “evidence” of large scale disruption by robots. The effect of the behaviour of owners of capital (and successful rent-seeking behaviour by firms) may be a bigger part of the story.
    http://www.nextnewdeal.net/rortybomb/one-where-larry-summers-demolished-robots-and-skills-arguments