Today is Labor Day in the United States, and many workers have the day off. It is also a good time to pause and consider the future of the worker in the world.
In the most recent past, the future of work over the next 10–20 years is dismal. According to a now very famous and often quoted study, 47 percent of all jobs in the economy could be eliminated as a result of computerization and algorithims. This report, completed by two esteemed academics, Carl Benedikt Frey and Michael A. Osbourne has been quoted often and is used by politicians, social activists, economists and writers to justify a need to explore a guaranteed basic income for all in the coming years. Some European nations such as Switzerland and Finland are already having a vigorous and healthy debate over the matter, and this is a good thing. Finland has gone as far as to plan to implement such a initiative in 2017 on a pilot basis.
Yet, this past week some good news perhaps appeared on this topic: a policy brief that asserts that perhaps automation will not be so comprehensively societal changing as once asserted. According to the brief by the Organization of Economic Development and Cooperation (OECD) in its policy brief, ‘Automation and Work in the Digital Economy,’ the danger of many jobs being eliminated totally due to automation still exists but it is more likely that only 9 percent of jobs on average will be eliminated. The OECD took a different approach in its study as it focused upon the “task content of individual jobs instead of the average task content of all jobs in each occupation.” Even before the OECD report, another study by academics David H. Autor and Michael J. Handel asserted that the approach taken by Frey and Osborne did not consider the variability in the tasks within each occupation.
Using this task approach, the OECD report did find significant automation looming for many jobs but nothing to the level seen in the report by Osborne and Frey. Once again, education (“tertiary degrees”) appeared to be the key to being more insulated from changes in manner of work and being less exposed to displacement.
The OECD study also commented heavily on the new “platform economy” where workers enjoy more flexibility in their work and independence but possess few social benefits from the society in which they live (via the company). For example, in 19 of the 34 countries studied by OECD, workers in the “platform economy” are not eligible for unemployment benefits. In other words, the new economy might be providing more freedom but it is not necessarily leading to an easier life economically.
The dismal news from the policy brief is obvious from that analysis. Inequality will continue to grow in societies across the world unless steps are taken mostly because labor’s share of GDP will continue to decline. The report concludes by asserting that tax and benefit schemes should be adopted that will promote skill adaptation. In addition, the fact that the report acknowledges that the labor market is splitting into highly skilled and low skilled is indicative of the notion that the labor market overall is being polarized. This in and of itself suggests more inequality.
The neoliberal loyalists and politicians must like this report. It likely puts the larger public at ease and it provides data that suggests that whatever they have been doing politically, it is working very well. Good jobs are being eliminated (mostly to save on labor costs), benefits are shrinking, and no one is in an uproar, especially in the United States. Happy Labor Day, everyone.