The future of employment

So what is the future of employment? Is new technology going to deliver a jobless world, or will there be plenty of new jobs to replace the ones that will disappear? This debate is sometimes described as if there are two opposing sides to the argument.

On the ‘jobless world’ side of the argument we might locate Scott Santens:

An ever decreasing percentage of the population is employed, and for a majority of those left in the labor market, incomes decrease, hours worked increase, monthly income variance grows more extreme, time between jobs grows, jobs themselves become more akin to tasks, employer-provided benefits become more rare, and the bonds that hold society together begin to fray as inequality grows ever more extreme.

Santens provides evidence that suggests that we have already entered this world, and that we entered it in 1990, which is the year in which the number of routine manual jobs and routine cognitive jobs flatlined at the same time as the number of other kinds of job continued to rise. So yes, there is still job growth. The number of high-wage nonroutine cognitive jobs continues to rise, as does the number of low-wage nonroutine manual jobs: but everything routine is increasingly done by robots. This process isn’t going to stop, and it has consequences. As a report from the National Bureau of Economic Ressearch shows,

one more robot per thousand workers reduces the employment to population ratio by about 0.18-0.34 percentage points and wages by 0.25-0.5 percent.

And OECD research suggests that 14% of all jobs across the thirty-two countries that they analyse have a high risk of automation, and a further 32% of jobs might experience significant changes to the way in which they are carried out.

On the ‘plenty of jobs’ side of the argument, Barry Eichengreen suggests that jobs will be transformed, and that

transformed is not the same as threatened. Machines, it is true, are already more efficient than legal associates at searching for precedents. But an attorney attuned to the personality of her client still plays an indispensable role in advising someone contemplating a messy divorce whether to negotiate, mediate, or go to court. Likewise, an attorney’s knowledge of the personalities of the principals in a civil suit or a criminal case can be combined with big data and analytics when the time comes for jury selection. The job is changing, not disappearing.

But perhaps neither of those two sides of the argument capture the reality. Branco Milanovic suggests that as tasks previously undertaken by full-time employees working for large organisations are increasingly carried out by ‘amateurs’, and our lives are increasingly commercialised – he mentions Airbnb as an example – we might find that ‘no one would be unemployed and no one would have a job’. Somewhat less optimistic is a draft of the World Bank’s 2019 World Development Report. It finds that in developing countries ‘informality’ is persistent even though economies are growing; that in more developed countries permanent employment contracts are becoming rarer; that new technology is fuelling growing inequality; that employment markets are generally becoming more fluid; and that there is wide variance in the estimates as to how new technology will affect employment. Recent research by the European Commission finds that 39% of employed individuals in the European Union are now self-employed or working with non-traditional employment contracts. It looks as if the future of employment will be characterised by diversity, fragmentation, and change, and it might be constituted by rather more different kinds of employment status than Matthew Taylor envisages.

We can draw two conclusions: 1. We don’t know what the future of employment will look like; and 2. Current evidence, and a growing consensus, suggest that whatever employment does look like in the future, employment patterns will be more diverse, fragmented and changing than they are now.

These two conclusions have important consequences for the Citizen’s Basic Income debate: 1. We should hesitate before suggesting that we shall need a Citizen’s Basic Income because technology will destroy jobs; 2. A strong argument for implementing a Citizen’s Basic Income is that individual and household employment patterns will be increasingly diverse, fragmented, and fluid, that no means-tested mechanism to maintain household net incomes will be able to cope with that, and that the only viable response is a Citizen’s Basic Income.