In 19th-century England, a group of textile workers and weavers went on a rampage, destroying industrial equipment and machinery. They were known as the Luddites – allegedly named after the young apprentice Ned Ludd, who smashed two stocking frames in a fit of rage. In response, the government arrested many of them, ran a mass trial, and executed some. Since then, the word “luddite” has become a derogatory term and is used to mock people who are opposed to technology.
But perhaps history has been a little harsh on the Luddites? After all, these were just ordinary people with bills to pay and families to feed and who saw their jobs and livelihoods disappear as a result of technological change. They had no unemployment insurance to fall back on, no access to retraining programs, and no unions to voice their concerns and to defend their interests. Was their reaction not merely human? Would you and I not have done the same thing if put in their shoes?
While technology moved on and government policy become more sophisticated than simply executing people, there are nonetheless similarities between what the Luddites were facing then and what is going on in our societies today. In the same way as weaving machinery was replacing human labour in the 19th century, modern technologies including robots and artificial intelligence are allowing an increasing number of tasks traditionally carried out by humans to be automated. In fact, this has already been happening for some time. A 2018 OECD working paper by Ljubica Nedelkoska and Glenda Quintini shows that over the past two decades, the share of middle-skilled jobs – particularly those that are routine and easily automatable – has been declining in most advanced economies, while the share of nonroutine high- and low-skilled jobs has been rising (a process often referred to as “job polarization”). Looking forward, the OECD estimates that around 14 percent of jobs are at high risk of automation (13.5 percent in Canada).
Does this mean that we need to worry about a jobless future? No – because, if the past is anything to go by, technology creates as many jobs as it destroys. It does so directly – just think of occupations that did not exist 10 or 20 years ago, like social-media managers, internet-of-things architects, data scientists and machine-learning engineers. And it also creates jobs indirectly: By lowering prices and improving quality, it boosts demand and, as a result, the need for workers. Indeed, this is what has happened in the past in the textile, steel and automotive industries, where despite the increased adoption of automating technologies, employment has continued to rise. Employment rates across OECD countries over the past two decades have been rising in most countries, not falling.
Policy-makers need to mitigate the risks and maximize the opportunities
Technological change will nonetheless create significant upheaval, and many people are likely to lose their jobs. The good news is that, unlike the Luddites, many displaced workers today have access to a panoply of rights, protections and services that will help them through this difficult period and find new work. The bad news is that there are holes in the safety net of most OECD countries and, therefore, policy-makers would do well to critically examine existing policies and institutions and ensure that they are still fit-for-purpose. Four areas of policy will be particularly important to get right: skills, social protection, labour-market regulation and social dialogue.
Lifelong learning: moving from rhetoric to reality
While the share of middle-skilled routine jobs is declining, the share of high-skilled jobs is growing. This is a welcome development, as it opens up prospects to move towards a more productive and higher value-added economy. The challenge, however, is that many people – including those whose jobs are at highest risk of automation – do not necessarily have the skills to take advantage of these opportunities. Nedelkoska and Quintini show that nearly 15 percent of workers (10 percent in Canada) do not know how to use a computer. Even more worrying is that nearly 58 percent (55 percent in Canada) know how to use a mouse and a browser, but if you ask them to use them to look for information, they struggle to do so.
This does not bode well for the future. If we want to ensure that the opportunities offered by technology are seized, we will need to move from rhetoric to reality with respect to lifelong learning: People will need to be able to maintain their skills, upskill or even reskill entirely throughout their working lives.
Protecting people who lose their income
When individuals are unable to work – either because of sickness, disability, an accident at work, caring responsibilities or because they have been made redundant – it makes sense for society to provide them with income support. There is a moral imperative to do so. But there is also an economic argument: It provides individuals with the means to look for a new job that matches their skills and experience. Combined with the right incentives and training, providing income support has been shown to be an effective way to fight long-term unemployment and inactivity.
The challenge, however, is that many people – and particularly those in nonstandard forms of employment – miss out on social protection. They are either excluded from such schemes altogether or they fail to meet the eligibility criteria because they do not work enough or do not earn enough, or they work intermittently and have interrupted contribution records. Making sure that all workers, regardless of contract type, have access to adequate social protection is therefore an important policy priority.
Employment status determines whether individuals have access to not only social protection but also to a whole suite of other benefits, rights and protections. If you are a full-time, permanent employee, the law protects you against unfair treatment (including discrimination) from your employer. It often guarantees you minimum pay, and you can join a union and have your interests defended collectively. If, however, you are self-employed, access to these benefits, rights and protections is much more precarious.
Of course, some self-employed people may not need such protections because they have high and stable incomes. However, many are vulnerable, earn little, have no bargaining power, depend for a large share of their income on one client, and/or may have little say about how, where and when they work. They might find themselves in the “grey zone” between dependent and self-employment, and some of them may even be falsely self-employed (that is, when employment relationships are disguised as self-employment to evade taxes and regulations). In such cases, the law either needs to be better enforced or revised altogether. These issues, while not new, have been given new attention with the rise of the platform economy.
Giving workers a voice
Workers who are self-employed have very little bargaining power. Because they are classified as self-employed, they are banned in most countries from joining unions and bargaining collectively because that would be in breach of competition policy. Some governments are seeking ways of strengthening the voice of these workers. Canada is an interesting example in this respect because, for labour relations purposes, the federal legislation includes a definition of “employee” that explicitly includes dependent contractors and therefore allows them to bargain collectively.
A coherent, whole-of-government approach is needed
Technology offers many opportunities and with the right policies and institutions in place, the opportunities are likely to exceed the risks. But it is also important that the various parts of government talk to each other. Indeed, strengthening social protection could be difficult if governments don’t think about how it might be financed. Thinking about improving working conditions for workers will require a careful balance between social dialogue on the one hand, and regulation on the other. In all this, it is important that the key actors – employers and workers – are involved in the discussion about the future we want and how we will get there.
This article is part of the Preparing Citizens for the Future of Work special feature.
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