What should we do about the job problem?
by Isabel Wu
Reporters, statisticians, economists and demographers are predicting the demise of jobs, millions of jobs. According to futurist Thomas Frey, 2 billion jobs will disappear by 2030. Whether you believe all the data or not it is clear that changes, mostly due to technology, in the structure of the labour market have already been significant. In Australia, across Europe and the US, the numbers of jobs lost during the GFC, for instance, have rebounded, however, mostly in lower, entry-level positions and high-level professional positions. The middle class jobs lost have stayed lost.
It doesn’t take much thinking to understand how this has happened. The ‘middle class’ jobs came about through industrialisation. Workers needed managers to manage them, facilities needed controllers to oversee them, professionals needed assistants to administer diaries and type, file and dispatch documents, services needed agents to book and coordinate them. Now, any function that can be performed routinely, mechanically or using an algorithm has been or will be replaced by technology. This will leave many of those in the ‘middle’ to take up work that previously would have been held by unskilled workers, pushing the unskilled or marginalised worker further out of any prospects for economic security.
The significance of the implications of this global workforce restructuring cannot be overstated. With the expectation that by 2030 only 2 billion of the 8.3 billion people on earth will hold jobs of the nature we currently recognise, protecting jobs and industries is not only futile it gets in the way of the vital work preparing for the future. If this lack of urgency continues, the inevitable increase of people living below the poverty line will be one of history’s greatest crimes against humanity.
The 16 years between today and 2030 is only enough time for a person to finish high school, complete a university degree and gain two to four years of work experience. Is this enough time (assuming in the future this method of progressing through education will even be relevant) for us to also understand, develop and regulate new industries? Will it be a fight between the health, biotech and manufacturing unions over who represents the 3D body part printing industry workers, for example?
Space architects, nanotechnology, memory neuroscientists, livestock engineering, robot repairs, virtual ethics lawyers – these are just some of the jobs set to emerge over the next decade. It is easy to think that obsolete jobs will be replaced with new jobs and therefore no need to panic. The problem is that the opportunities favour those who are already practising their specialist field. They will be the ones with enough accumulated experience, training and knowledge to take on these positions. The expected shortage of qualified workers will push up the remuneration they will be able to command, increasing the divide between the wealthy and the poor.
In this scenario it seems incredible that governments are focused on progression from the past rather than preparation for the future. ‘Saving industries’ and ‘creating jobs’ is great for political cachet but the reality is a marketplace that simply does not want commoditised goods and services produced and sold using old industrial/traditional methods (especially due to cost). Government does not have a say in whether these industries or jobs are saved. All we are achieving is a constant state of tension between the desire to cling to the past and the looming approach of the future. In a state of tension action is stymied by the pain of movement and the paralysis from no clear plan of action.
The projected imbalance between the working and the non- or intermittently working must put ‘work creation’ on the priority list. How will the working minority ever be able to pay enough taxes to support the rest?
What should be done? There are many ideas that have been proposed to improve employment such as the reduction of red tape, revision of unfair dismissal laws and removal of penalty rates. Many good ideas are made difficult because they are unpopular. These ideas endlessly argued in parliaments, courts, the media, social media and organisations are only improvements on the master-servant relationship enshrined in English common law.
It’s time to debate some new ideas that will help societies enable more people to work in fulfilling and productive enterprises. Here are mine:
- More people will be working as freelancers and small business operators than employees within the next 5 to 6 years. As more Gen Y and Millennial Generation workers enter the workforce the growth of this sector will continue. Why then, are schools still preparing students for jobs they may never hold? The focus on ‘preparing’ students for the future writing résumés, applying for jobs, career advice are akin to the compulsory subject I was forced into for two years in high school. I am grateful that I can touch type but the chances that it would be how I earned a living was, even then, dubious at best.
How many in the school system still operate, even subconsciously, on the premise that the ‘smart’ ones should be groomed for university, the ‘non-academic’ encouraged to find a trade and the non-conformists to find a job.
- Whatever funds government is pouring into employment should be adjusted so that at least the equal amount is made available for solo and small business operators. Not only are they going to outnumber employees, there will be more opportunities for the at-risk of unemployment in their own enterprise than in jobs. You might even consider self-employment the new entry-level job.
This option will give government far better return on their investment. Companies are increasing their use of outsourced work, while average earning for freelancers and solo business operators have been increasing on average year on year.
- What if governments paid the first five hours per week up to 30 weeks, say, for any worker employed by a micro or small business? How many more people would get a starting chance at work? How many retiring workers could mentor new workers? How many businesses might be encouraged to reconsider their (non-tax paying) unofficial operations?
- What if there was tax incentive for workers to change jobs? A social policy version of Tony Hsieh’s initiative where Zappos’ new hires are paid $2,000 to quit. This would relieve employers of workers who would rather be elsewhere but force them to get serious about providing a decent work environment if they want decent workers to stay.
- With all the smart technology available, payroll administration should become the responsibility of the individual. Payroll administration is an expensive burden for large employers, and a nightmare for small employers. It’s the workers’ money, why don’t they look after its administration? The employee registers once as an individual tax payer, then as they are employed to work, links up their account with the employer’s. It then becomes one tax payment on the employee’s total monthly earnings, one tax return.
- One of the main arguments against employment reform is that workers need protection. Putting restrictive practices in place such as minimum hours and penalty rates to discourage poor employer behaviour disadvantages decent employers and employees while the rogue employers simply flaunt the law. What if employers were required to apply for a licence that comes with basic employer training? When registration and licences are required for rights like driving a car and owning a cat, it does not seem unreasonable to register for rights that give employers so much control over the economic and in many ways physical and mental well-being of their workers. Plus it would be a nice windfall for government coffers
The objective for society must be work, not job, creation. To do this we need to focus on where most of the work will be available, and if this is NOT in employment, then we need to make it easier for independent operators to set up, to operate and to become good employers themselves.
What other ideas do you have?