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.