Labor In The Age Of Robots

Guy-Ryder-244x300By Guy Ryder

Mr. Guy Ryder is Director-General of the International Labor Organization.

The original article is published in the Social Europe Journal

Fears about the impact of technology on the labor market are nothing new. In the early nineteenth century, a group of English textile workers known as the Luddites worried that new technologies like power looms and spinning frames would cost them their jobs. They protested by smashing the machines.

Today, anxiety that new technologies could destroy millions of jobs is as high as ever. In the midst of a major employment crisis, technology continues to reduce the labor needed for mass production, while the automation of routine legal and accounting tasks is hollowing out that sector of the job market as well. The science of robotics is revolutionizing manufacturing; every year, an additional 200,000 industrial robots come into use. In 2015, the total is expected to reach 1.5 million. Adapting the labor market to a world of increasingly automated workplaces will be one of the defining challenges of our era.

Yet no country can afford to ignore the transformation. Globally, some 200 million people are unemployed, up 27 million since 2008. There is a critical need to anticipate coming technological changes and provide the global workforce with the education and skills needed to participate in the modern labor market.

Worldwide, one-third of employers surveyed complain that they are unable to find workers with the right skills for existing vacancies. Efficient paths from training and education programs to the world of work must be built, so that skills can be matched to market demand. Government programs must be strengthened, and employers and trade unions must assume greater responsibility for investing in skills. They also must consult more closely with educators and policymakers – discussions that should be informed by labor-market information, performance reviews, and the availability of employment services.

Whatever a country’s development level, investment in education and skills will increase the ability of its workforce to innovate and adapt to new technologies. Such investment can determine whether a country’s economic growth is broadly inclusive or leaves large segments of society behind. An abundant supply of workers who have been appropriately trained and can continue to learn boosts investor confidence and thus job growth.

In addition to training the labor force for an age of further automation, sustainable economies must offer protections for workers in good times and bad. The nature of a worker’s relationship with his or her employer is changing. People entering the labor market are increasingly finding only short-term or temporary contracts; often, they are forced to take informal work or emigrate for a job. These trends are exacerbating income inequality.

As a result, mitigation policies are necessary. Along with a robust system of unemployment benefits, social protections such as healthcare and pensions are essential for overall worker security and to ensure a healthy economy. And yet only 20% of the world’s population has adequate social-security coverage; more than half lack any coverage at all.

That is why the work of the International Labor Organization, which was established in 1919, is still relevant today. In a world of increasingly automated workplaces and eroding employee-employer relationships, the values encoded in the ILO’s labor standards are more necessary than ever.

The complex challenges facing workers worldwide will require complex solutions. In 2013, the ILO launched its Future of Work initiative, which seeks to identify and analyze incipient trends and provide a forum for discussion about what must be done to adapt to rapidly changing labor-market conditions.

Our world has changed vastly over the past century – and not only because of technology. By 2050, the global population will surpass nine billion. The number of people aged 60 years and over will have tripled. Three-quarters of the elderly will be living in what are now developing countries, and the majority of them will be women. These demographic shifts will further revolutionize the labor market, social-security systems, economic development, and the world of employment.

For all of the progress human society has made since the era of the Luddites, a simple truth persists: machines must strengthen, not weaken, our prospects for inclusive growth and broadly shared prosperity. We must ensure that the modern economy is a sustainable one, built on the principles of human dignity and the opportunity for decent work.



How Globalisation And Technology Drive Insecurity

Paul SweeneyBy Paul Sweeney

Paul Sweeney was Chief Economist with the Irish Congress of Trade Unions. A graduate of Trinity College, Dublin, Paul has worked as a tax inspector and as an economic consultant.

This article was originally published in Social Europe.

People are insecure. Young people worry about getting a decent job, finding a secure home and having to pay off the vast debts run up in the decade of uber-liberal economic policies of European governments to 2007. Elderly people worry about their security in old age, access to decent health care, about their children getting jobs or being forced to emigrate.

A recent Eurofound study concluded that 14% of jobs in Europe are high-paid good jobs; 37% are well-balanced good jobs; 29% are poorly balanced jobs; and 20% are poor quality jobs. Thus almost half of all those at work are not in good jobs.

Yet we have never had such high incomes or wealth. This is in spite of the six years of the Great Recession. Total national income is substantially higher than what it was a generation ago. Yet only a generation ago too, jobs and pensions were more secure, homes were easier to find and health care was not such a big worry.

What has led to today’s insecurity? The big drivers of insecurity are globalisation and technology. They have shifted low skilled jobs and now even middle income jobs offshore, created intense competition, change and uncertainty. They give great power to large corporations, while undermining the power of states and of organised labour. Crucially, they have also changed the nature of politics.

Globalisation and technology have been key drivers in the three-decade-long (a generation) decline in the share of national income of workers and the self-employed and its corresponding shift to wealthy people and corporations A few countries like Ireland witnessed the boom of catching up with the rest of Europe for 20 years, when overall earnings rose so the seismic shift in income was not so evident, but thanks to the Great Recession, it now is.

Both globalisation and technology have reduced labour’s bargaining power through offshoring, through sectoral shifts in employment from manufacturing to services, from large units to smaller ones and to autonomous, self-employed working. It has facilitated the massive decline in corporate governance – in the way firms are run and what their objectives are. It boosted the pay of the elite to extraordinary levels that have nothing to do with performance. Both have also facilitated financialisation – where finance rules the real economy.

Globalisation has also reduced financial disclosure, blurring our knowledge of the real ownership and control of business. It has led to the privatisation of swathes of public services, and these privatised public services are increasingly run by big, non-competing oligopolies. It has facilitated increased tax evasion and tax avoidance on unprecedented scales by the wealthy and by large companies. The Luxleaks and HSBC exposures are only the tip of this iceberg of tax cheating on an industrial scale in some countries.

There has been a decline in job security, with the growth in precarious employment hitting the young and older people hardest. Increasingly, workers are hired as self-employed within firms seeking to minimise permanent staff because of intense competition from outside. Jobs will become precarious and poorly paid for many except the most highly educated. But even professionals are forced to work endless hours, always on call by phone and, while free to set their own hours, they fear to take that ‘choice’.

Globalisation and technology are drivers of insecurity according to Paul Sweeney.

Globalisation is hard to tame. But it has brought huge benefits from trade including much cheaper goods – the price of clothing has fallen dramatically in the past thirty years when overall prices rose; the variety and quality of goods and services has improved immeasurably.

The level of foreign investment has grown immensely, much of it into and within Europe, and it has helped bring many economies up to world standards in productivity, with well-paid, high-skilled jobs and substantial benefits for the rest of the economy, including public services.

Thus we do not want to stop globalisation. We do, however, want to control it and to make it work better for citizens, to get hugely profitable firms to start paying taxes and reduce the power of finance.

The control of technology is difficult because in spite of the rhetoric of empowering people, it is firmly in the hands of big business. The big tech firms have increasingly privatised privacy. At one time it was the public sector which held our photo and details of our passport and driving licence. Today, the private Internet giants, GAFA – Google, Apple, Facebook and Amazon – hold remarkable and detailed information on all aspects of our lives and interests which they use for their own monetising interests.

Many multinational firms can be powerhouses of innovation, employment and of wealth creation. We need governments to tame them, tax them and use the tax to pay for health care and make jobs decent and secure so that we ourselves can again pay for our pensions.

While obviously such huge firms are a part of the economy, it seems governments in Ireland and beyond go to inordinate lengths to court them. This includes engaging in tax wars. Tax wars are zero sum wars – citizens lose and corporates win.

Governments seem to have less power to act in the globalised world. However, acting together, they can manage trade, intense competition and needless job destruction. In the past few years, they have shown what they can do when working together. They stabilised the Euro (for now), are finally getting companies to pay some tax with OECD and G20 initiatives and are rooting out, and may actually tax, the trillions hidden in offshore accounts.

These actions on evasion and avoidance and tax havens could lead to greater security for us all, if they were pursued vigorously, because we would then have the money to pay for health, welfare, education and pensions. Populist politics will not solve this dilemma of growing insecurity in the midst of so much progress and plenty. It will take hard analysis of what is going wrong to address it, not opposition without solutions.

In some European countries there is a populist analysis to which, regrettably, some once progressive political parties subscribe. This populist national discourse is “better public services and lower taxes.” It has to end. Politicians have to become leaders and cease to be blind followers of focus groups and the like.

To address the seismic shift in power that globalisation and technology has given to the few, there has to be an equally radical shift in politics. We need governments which genuinely seek to redress the power imbalance, not exacerbate it with tax wars, tax avoidance schemes, further de-regulation, outsourcing and privatisation.

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Apple and Tesla: Strategy and Love

William LaraqueMr. William Laraque is an advisor to governments, financial institutions and enterprise for economic development and job creation Top Contributor

Apple doesn’t need to buy Tesla. Apple’s credo is to bring design excellence to digital products that consumers use everyday. Like cars! The car is a digital product until such time as teleportation becomes practical. It not only gets you where you are going, but helps determine where that is and now tells you how to get there. You can tell your loved ones where you are using the car’s communication functionality while listening to beautiful music, or the music you like whether or not it can be characterized as beautiful. Apple improves the quality of life. So will the Apple car.

Consumers love the beautiful and the well designed, the well functioning. This is the point. Consumers love Apple products and as Tim Cook has said, love determines relevance.

Continue reading Apple and Tesla: Strategy and Love