Future in the labor market: With work but no job?

The phrase “Future of Work” has become a buzz term.  The International Labor Organization (ILO), which is observing its centenary in 2019, has organized numerous conferences and studies on the topic. The techies and futuristic academics have a grand time imagining work done by robots and/or facilitated by artificial intelligence and big data analytics. The HR specialists, trade unionists, economists and sociologists have all joined the discourse and have been debating about technology and the changing work organization in the 21st century.

For those analyzing the jobs market, the main concern is whether technology-driven changes on how work is done at the firm and industry levels are contributing to job creation and improving the quality of jobs.  The pessimists tend to outnumber the optimists.

History tells us that jobs tend to be “disrupted” by the introduction of any new technology in the work place.  If automation can do the work of five or more people, then workers get displaced.  However, if the innovation spurs new job-creating economic activities, then society ultimately benefits and jobs eventually grow in quantity and quality.  Proof of this is the great advances of civilization under the three Industrial Revolutions – first, the rise of factories in the 18th-19th centuries; second, the surge towards mass production in the 20th century; and third, the widespread application in various fields of the ICT tools at the turn of the millennium.

The optimists cite the specific case of the banking industry, a big user of innovation and technology.  The adoption of automated teller machines, do-it-yourself banking and online banking have not reduced the workforce in the banking industry worldwide. Instead, more bank employees with higher skills have been hired.

The pessimists are a multitude. Job decimation is palpable and massive when robots and automated processes, which can do the work of hundreds and even thousands, are deployed.  In fact, industrial engineers and HR managers in many countries are grieving over the end of the factory and mass production systems. There is now a global shift towards mass digitization, which spells troubles to the traditional way factories and businesses are established and organized, complete with a huge army of blue-collar and white-collar workers.  Robert Reich, Bill Clinton’s Labor Secretary, wrote in Saving Capitalism (2016) on the job contrasts between digital Instagram and pre-digital Kodak as follows:

“…When Instagram, a popular photo-sharing site, was sold to Facebook for about $1 billion in 2012, it had 13 employees and 30 million customers.  Contrast this with Kodak, which had filed for bankruptcy a few months before. In its prime, Kodak had employed 145,000 people.” (pp. 206-207).

Will the digital age be able to create more and better jobs?  The answer to the quantity is still uncertain.  But what is clear, based on studies by the ILO and other labor research institutes, is that precarity is surging.  Paid wage work is becoming scarce and contingent labor is becoming the norm.  This is clearly illustrated in the uberization of work, with Uber and Grab claiming that their drivers are “independent contractors”, not employees.

Apps and sensors are making work less dependent on humans.  The latest smart phone has, at least, six embedded sensors – temperature, GPS, accelerometer, humidity, ambient sound, magnetometer and so on.  The engineers of IPhone and Samsung are now busy designing devices that listen to voice, monitor heart beat, give reminders on meetings and other interactive services.

John Deere and other agri-machine companies are also able to use drones, cameras and sensors to tell “farmers” when to plow the farm, plant seedlings in the right place, place just enough water, add the right amount of fertilizer for each plant and when to harvest based on the color of the plant.

The problem is that these advances in technology benefit mainly the elite consumers and the elite job holders, not the many in society.  As the ILO’s labor force studies show, only one in four workers worldwide has a stable job.  More and more people are holding part-time, contingent and low-wage replaceable jobs.  To put it more bluntly: majority have work, but have no regular jobs.

The ILO’s World Employment and Social Outlook (2015)  found  that three-quarters of workers are “employed on temporary or short-term contracts, in informal jobs often without any contract, under own-account arrangements or in unpaid family jobs.”  And among those who earn wages or salaries, less than half – only 42 percent  — are employed on a permanent or regular basis.  In short, the “endo” and “contractualization” complaints of the Philippine trade unions are global or universal concerns for workers around the world.

This is true not only for developing countries but also for the advanced economies.  According to the ILO, increases in part-time jobs are accompanied by losses in regular of full-time jobs for workers in France, Italy, Spain, Japan and others.

There is also a trend towards less legal protection for stable jobs.  This is illustrated by what is happening in France, where newly-elected President Emmanuel Macron is pushing for greater “freedom” of employers to hire and fire employees based on the swings in the economy and the labor market.  Macron even called the trade unions opposing his “reform” as “slackers”.  President Rodrigo Duterte, who promised to end “contractualization”, will not use such a strong language against Filipino trade union activists who are pushing for a law guaranteeing “security of tenure”.

So what does the future hold for the labor market of the world?  More jobs?  Uncertain.  Better jobs? For a few, not the many.  Is this equitable?  No.  Is this state of affairs sustainable?  No.

What then is the alternative? A new architecture of globalization, where the advances in technology are mobilized to serve, not penalize, the working women and men of the 21st century.