By now, it is abundantly clear that the world of business is rapidly changing under the Fourth Industrial Revolution, simply referred to by human resource managers as “industry 4.0”. In turn, the way work is organized and managed is also rapidly changing.
The big question, however, is – can we have a Fourth Industrial Revolution that works for all, as a Microsoft think paper put it? Or, can we have guaranteed minimum basic income and universal social protection for all, as floated by the World Bank in its 2019 World Development Report on the “Changing Nature of Work”? And yes, can humanity secure social justice in the digital era, a challenge posed by the International Labor Organization (ILO) to its tripartite social partners?
The reality is that these triple issues of inclusion, social protection and social justice in the digital era are somehow relegated to the background by the numerous media accounts on how business and jobs shall be “disrupted” or “displaced”, on what are the new robots invading the work place such as the 7-11 robot cashiers in Korea and the robot waiters developed by Nepal’s techies, and on the stream of estimates on the “automatables” in various countries. A study by McKinsey Global Institute asserts that 40 per cent, out of 50 per cent of all occupations in the United States, are “automatable”.
In Southeast Asia, a 2016 ILO-ASEAN study involving five ASEAN countries (Cambodia, Indonesia, Philippines, Thailand and Vietnam) claims that many sectors in the economy are highly vulnerable to the endless advances in automation, digitization, apps development and cloud computing. In manufacturing, the auto, electronics, textile-clothing and footwear industries are at risk due to robotization, 3D printing and CAD/CAM processes. These industries are witnessing the rise of co-worker robots or “cobots” at the work place, robots that can sew or stitch things together or “sew-bots”, and robots that can do various functions going around the shop floor or “locobots”.
The problem here is that these industries happen to be the major industries that have been fueling ASEAN economic growth under the GVCs of multinationals. These TNCs now have the option to withdraw investments in a labor-intensive facility in the region and bring back low-cost manufacturing to their home country such as what Adidas did when it set up shoe manufacturing plants in Germany and in Atlanta last year. Is the Philippine DTI still bent on pursuing its declared program of scaling up participation in the GVC system of the world? Is PEZA, which has covered most of the call center-BPO firms under its “ecozone” program, coordinating with DOLE and other agencies on how to deal with those to be affected by the likely decline of the voice segment of the call center-BPO sector because of breakthrough innovations in software automation, interactive AI, cloud computing and do-it-yourself technology.
Now back to the inclusion, social protection and social justice issues. What can policy makers, employers, trade unions, CSOs and other stakeholders in society do in the area of social and labor policy? At the moment, there are black holes in the labor policy regime of many countries. For example, there are unsettled questions on the status of drivers in ride-hailing transport companies such as Grab and Go-Jek. Are they “independent contractors” or employees, who deserve minimum basic pay, social security and other benefits due to a wage worker? How about the thousands of online freelancers such as the Filipino “skype tutors” who teach Japanese families English from the comfort of their homes? What is the appropriate compensation rate? And yes, how about the taxes that have to paid to the government?
The questions are endless. But as wisely suggested by the proponents of technology revolution for all, it is important for humanity to reflect on the history of how labor and social legislations developed in the earlier industrial revolutions. In the first industrial revolution, circa 1750-1850, workers’ rights were ignored and the early working conditions were horrific – work hours of 15-16 hours, child workers as young as 5-6 years old, many workers dying in their 20s or 30s, and so on. The situation gave rise to numerous workers’ strikes and uprisings, mostly spontaneous and directed by underground “socialist” labor organizations. But after the bloody Paris Commune of 1871 and the Chicago city-wide strike for eight-hour labor law in 1886, European governments gradually learned the need to lower working hours, raise the working age, recognize unions and develop a system of dispute settlement. A stable capitalist society needed a stable social order based on certain social and labor rules.
In the Second Industrial Revolution, which saw the transformation of the factory system into mass production system (courtesy of the new conveyor belts and the Tayloristic time-and-motion studies), more wage worker were hired, joining the growing army of blue-collar workers. As services and other sectors developed, new collars were added – the white-collar office and service workers. But like in the First Industrial Revolutions, the struggle for higher wages, better benefits and protective labor laws never stopped in virtually all capitalist countries. In Russia, returning peasant-and-worker-soldiers, defeated by the Allied forces, joined the Bolshevik Revolution of Vladimir Lenin to oust the Tsarist regime and establish the “First Workers’ State” in the world in 1917. This prompted the United States and the United Kingdom to include the establishment of a labor-standard-setting ILO as part of the 1919 Treaty of Versailles ending World War I.
Later, western governments learned that investing on workers’ rights and social dialogue helps strengthens the economy and society. This is what Franklin Delano Roosevelt did in the 1930s to help engineer American recovery from the 1929-33 Great Depression through a “New Deal” program recognizing unionism and workers’ bargaining rights as well as massive government stimulus spending on various infra and social projects. This is also what Western Europe, Japan, Canada and Australia/New Zealand did after World War II when they institutionalized “welfare capitalism” and closer union-management partnership, twin measures that were partly a response to the expansion of the “socialist camp” in Eastern Europe and parts of Asia (China, Vietnam and Korea). These also became part of the post-WWII social contract in the OECD countries and the system of tripartism promoted by ILO for all Member States.
The problem is that the social contract and tripartism in the United States, Europe and many countries have been eroding since the 1980s. The 1980s up to the turn of the millennium were decades that saw huge technological advances because of the ICT Revolution, which is the central feature of the Third Industrial Revolution. These decades also happen to be decades of “free trade” thinking, alias “Washington Consensus”, in national and global trade and economic policy. Free trade and the ICT Revolution are considered major factors in the globalization of economies everywhere. But at the same time, they are also blamed for the deepening social and economic inequality everywhere.
Now that humanity is in the cusp of a new era of technology, alias the Fourth Industrial Revolution, can policy makers continue to ignore the exclusion of the many and the lack of social justice in many places? Shall they wait for the Technology Revolution to be transformed into a Social Revolution? A review and institutionalization of appropriate social and labor rules in the digital era are in order.