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Creative Innovation 2017 (Ci2017)

The Future of Work is What We Make It

Wednesday, 1 November 2017

There has been an outbreak of public concern recently about the impacts of technological change on employment. Some research suggests that 40 percent or more of all jobs are highly vulnerable to automation and computerisation in coming decades (Frey and Osborne, 2013). Some observers even suggest that work can no longer be the primary means for people to support themselves – leading to all sorts of radical policy responses ranging from taxing robots (Delaney, 2017) to the provision of universal basic income to all people, working or not (Arthur, 2016).

Of course, this general fear of technological unemployment isn’t new. Since the industrial revolution, workers have quite understandably worried about what will happen to their jobs when machines can do their work faster, cheaper, or better. Previous periods of accelerating technological change were also associated with other waves of concern; even relatively recently, futurists were predicting that technology would make work largely obsolete (for example, Rifkin, 1995).

Conventional market-oriented economists downplay these concerns: the magical workings of supply and demand forces should ensure that any labour displaced by technology is automatically redeployed in other, more appropriate endeavours, and people will be better off in the long run. The focus of policy should be to facilitate that transition through retraining and mobility assistance, allowing displaced workers to move more easily into better, alternative occupations.

There are many reasons to question this optimistic theoretical perspective. But actual historical experience gives more cause to doubt ultra-pessimistic forecasts of technological unemployment. In practice, previous waves of technological change have not been associated with mass unemployment, for a range of reasons. The labour-displacing effects of new technology can be offset, in whole or in part, by other factors: including new work associated with the development, production, and operation of the new technology itself; new tasks that become conceivable only as a result of the new technology; historic reductions in average working hours (a trend which has unfortunately stalled under neoliberalism); and the capacity of active macroeconomic policy to boost aggregate labour demand when needed.

So even from a critical economic perspective, there is little reason to conclude that “work will disappear”. This does not mean we should be complacent about the problems and risks posed to workers by accelerating technological change.But it does mean our response to those challenges should be grounded in a more balanced and complete assessment of what technology actually does to work – and where technology comes from in the first place.

Remember, technology is not some exogenous, uncontrollable force. What we call “technology” is actually the composite of human knowledge about how to produce a broader range of goods and services, using better tools and techniques. Humans put their minds to solving certain problems (so-called “mission-based innovation”, as termed by Mazzucato, 2011), based on their particular concerns and interests. And therefore, technology is never neutral: the problems we turn our creative attention to, reflect the interests and influence of the constituencies which get to decide and fund innovation activity.

For example, one nefarious use of modern technology in workplaces is the ubiquitous and largely uncontrolled application of surveillance and performance-tracking technology by employers, to more immediately and completely monitor the work effort of their employees. Increasingly intrusive systems now give bosses minute-by-minute data on the whereabouts, productivity, and even attitudes of their workers. This has wide-ranging impacts not only on privacy and the quality of work. It even affects compensation: when it is so easy and cheap to monitor employees (and sack them if their performance is unsatisfactory), employers have less reason to offer workers positive incentives (or “carrots”) for performance and retention – and are more likely to use a disciplinary “stick” instead. It is no accident that surveillance and monitoring technology has advanced in leaps and bounds: employers have a strong vested interest in using these techniques to intensify work and enhance profit margins. Yet at the same time, easily-solvable monitoring problems – like ensuring that franchise businesses actually pay their employees minimum wages, for example, or are making their legally mandated superannuation contributions – are not addressed with technological solutions. Why not?

This non-neutrality of technology reflects the increasingly lopsided power imbalances in the modern labour market: those with power can influence the direction of technology in ways that reinforce their power. Another example is the one-sided application of digital platforms for assigning work and collecting payment used by “gig”-economy businesses like Uber and Deliveroo. Their technology has not (so far) actually changed the core nature of the work involved in these businesses: passengers are still driven about in a car, and take-away food is still delivered on a bicycle. What technology has facilitated, rather, are big changes in how work is hired, supervised, and compensated. By using digital applications (which they developed and own), platform businesses try to distance themselves from traditional employer functions and responsibilities (like paying minimum wages, or offering any stability or continuity of work). Technology thus allows businesses to shift risk to those performing the work, and minimise their labour costs. These changes in the social relations of workare by no means inevitable – as is being proven as workers around the world fight back against the most exploitive practices of these businesses. (Singapore’s approach was fairly effective in this regard: simply banning Uber from operating altogether). Resisting the mis-use of technology to cheapen and degrade work, is very different from a Luddite-like effort to try to stop technology itself.

Some jobs will certainly disappear as technology replaces some tasks (and employers use it to enhance their ability to control and parcel out work most profitably). Some new jobs will be created: including good ones (like the creative, knowledge-intensive ones developing and managing new technologies), and some less good ones (like the menial digital work associated with many technologies). Many jobs, perhaps counterintuitively, will hardly be affected at all: including a range of caring services, cleaning, hospitality, and other functions which seem to inherently require hands-on human labour.

To be sure, the quantity of work available is always a concern, all the more so given the stagnation (globally and in Australia) which continues to dominate the global economy since the GFC. Governments should put top priority on stimulating job-creation, wielding the whole array of policy tools (fiscal, monetary, industry, trade, skills, and more) at their disposal. Spurring stronger demand for labour will automatically ease adjustment to new technologies and their labour-displacing effects.

But the quality of jobs is an equal concern, and it is in this realm that the impacts of new technology may be most severe. The quality of new jobs created as technology advances, and the quality of existing jobs that are largely untouched by technology, must be targeted for forceful, ambitious policy attention, to arrest and reverse the widespread degradation of work which is being permitted by weak labour market conditions, technology, and the enhanced and largely unchallenged power of employers.

After all, a sustained structural shift in bargaining power in the labour market, in favour of employers, has been a central goal of neoliberal economic and social policy. There has been an expansion of non-standard employment in all its forms: irregular hours, casual work, labour hire positions, precarious forms of contracting and self-employment, and more. This precarity has been facilitated by a combination of persistently weak labour market conditions (compelling desperate workers to take any job no matter how insecure); technologies which make it easier for firms to orient staffing around precarious and on-call work; and regulatory inattention and complacency. On this last point, regulatory levers for protecting workers have not kept up with employers’ efforts to sidestep traditional minimum standards. Even the simplest of standards (like the minimum wage) are widely unenforced.

In short, to address the impacts of technology – and, more importantly, the one-sided application of technology within workplaces – we must modernise and revitalise the concept of a social contract. We need a social contract for the digital age, that re-establishes mutual responsibilities and expectations, that commits to improving both the quantity and quality of work as a central goal of policy, and that actively supports the countervailing forces (like unions, employment standards, and cultural expectations of fairness) that are essential to achieving more security and fairness in the world of work.

The values of NSW Labor provide a solid foundation from which to embark on such a revitalisation. The party’s vision emphasises that ‘prosperity starts with good jobs’ and commits that the ‘benefits of rising prosperity are shared fairly’; working towards such collective prosperity is a stated goal (NSW Labor, 2017). Key to this prosperity from a Labor viewpoint is support for more equal opportunities in the labour market and an effective system for regulating work. These values are constant and are not altered by technology or innovation: they apply whether citizens are engaged to work in full-time, “old economy” jobs or precarious “gigging” in the digital economy. A challenge is posed, though, by the rhetoric of innovation that leads the launch of a shiny new app to distract from the business models that underpin it – often based on underpaid, insecure, or invisible labour. What is needed then is clarity and purpose to create a system for regulating work that is modern, but fair.

Australian governments at all levels have been creative regulators of the labour market since Federation: think of the tax provisions implemented in the early years following federation. The Commonwealth government was constrained by the Labour power [Section 51 (xxxv)] of the Constitution, meaning that it could not intervene directly to set wages and conditions of work. However, it could impose taxes. The Excise Tariff Act 1906 passed by the Deakin government included a provision for manufacturers of agricultural machinery to be exempt from the excise if the workers in that company were paid a ‘fair and reasonable’ wage (Hamilton, 2011). The Harvester judgement that ensued is embedded in industrial relations folklore and has become synonymous with the establishment of minimum wages in Australia. However, what is often overlooked is that the mechanism used to establish this landmark was not a mechanism of traditional labour law – it was, after all, triggered by tax law.

Labor Governments have not been alone in this regulatory innovation to address labour policy concerns. The Howard Government was just as inventive and driven in its determination to use the Corporations power [Section 51 (xx)] of the Constitution to create a national regulatory framework that downgraded collective bargaining and instituted statutory individual contracts. A further legacy of that re-orientation was the whittling away of State industrial relations jurisdictions. This might lead to the conclusion that a State Labor government has little capacity to influence the wages and conditions of workers beyond the public sector. However, this conclusion is too narrow, and underestimates the extent to which creative, ambitious interventions at the state level could contribute to the restoration of a progressive social contract.

Consider, for example, the current Victorian government’s attempts to eradicate the exploitation of workers in industries like horticulture, through the introduction of a legislated licensing scheme for labour hire companies. This is illustrative of the potential for action by a State government to curb the exploitation of vulnerable workers. But legislation is not the only choice; there is a vast array of options on the regulatory spectrum.

Another means of regulating for better outcomes outside the confines of labour law is to support industry-specific multi-stakeholder collaboration. A developing example of this is the Cleaning Accountability Framework. CAF is an independent, multi-stakeholder initiative comprising representatives from across the cleaning supply chain – including institutional property investors, building owners, facility managers, cleaning companies, cleaners (through United Voice) and industry associations. CAF seeks to improve labour standards by encouraging transparency throughout the cleaning supply chain. CAF will recognise stakeholders who adopt better practice in the cleaning industry through a building certification scheme. In doing so, CAF will work to improve the employment conditions of cleaners, support sustainable business models and responsible contracting practices, help building owners and investors manage risk, and assist tenants in ensuring that they are benefiting from quality cleaning services. Multi-stakeholder initiatives have been criticised for lacking enforceability, but CAF overcomes this by using the structure of the supply chain, specifically the power of building owners and managers to drive compliance.

None of these examples are centred in the “gig economy,” nor do they address sectors immediately threatened by automation. But they nevertheless provide an insight into “‘outside the box” efforts to improve the quality and fairness of jobs. Similar ambition and creativity could provide a better regulatory environment for the conduct of all types of work – not least in the digitally enabled economy. This could begin with a comprehensive mapping of State-based regulation to identify potential opportunities to leverage existing laws, regulations, procurement policies and industry codes.

This would be an ambitious project, but given the extent of State influence in major areas of the economy (health, education, transport), it would provide a plethora of policy options.

Alternatively, if changes to work (whether wrought by technology or ‘innovation’ in business models) are left unquestioned, and if we assign the determination of working conditions to algorithms, then the aspirations encapsulated in “Labor values” will remain unrealised and, a chance to re-imagine a social contract based on decent work will be squandered.

References

Original Article

Arthur, Don 2016, “Basic Income: A Radical Idea Enters the Mainstream,” Parliament of Australia, Research Paper Series 2016-17, November 18, http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1617/BasicIncome.

Delaney, Kevin J 2017, “The robot that takes your job should pay taxes, says Bill Gates,” Quartz, February 17, https://qz.com/911968/bill-gates-the-robot-that-takes-your-job-should-pay-taxes/.

Frey, Carl Benedikt, and Michael A. Osborne 2013, The Future of Employment: How Susceptible are Jobs to Computerisation? (Oxford: Oxford Martin School).

Hamilton, R. S. 2011, Waltzing Matilda and the Sunshine Harvester Factory: The early history of the Arbitration Court, the Australian minimum wage, working hours and paid leave (Melbourne: Fair Work Australia).

Mazzucato, Mariana 2011, The Entrepreneurial State: Debunking Public vs. Private Sector Myths (London: Anthem).

NSW Labor 2017, “Our Values,” http://www.nswlabor.org.au/our_values.

Rifkin, Jeremy 1995, The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era (New York: Putnam & Sons).

Sarah Kaine is an Associate Professor at the UTS Business School, and a member of the Advisory Committee of the Centre for Future Work. Jim Stanford is Economist and Director of the Centre for Future Work, part of the Australia Institute.

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