What does automation mean for employment?
It’s no secret that the world of work is heading for a major disruption that could reshape it totally over the next couple of decades. Automation is expected to make vast swathes of middle-income jobs redundant across the world, while the emerging ‘gig economy’ is rapidly reconfiguring the labour market. What might this mean for workers, business, the economy, well-being and sustainability?
Hundreds of articles already discuss this topic: you’ve probably read at least one in the past year wondering if robots are going to take our jobs. However, you might also have noticed that most of them share a similar unspoken perspective, and come to similar conclusions, which tend to be presented as inevitable. We might call this the ‘official future’ — of which more shortly. Other possibilities for the future tend to be overlooked, even though there are actually several very different ways in which these trends might play out — with very different outcomes for well-being and sustainability depending on the choices we collectively make. Here at Forum for the Future, we are currently creating 15-year scenarios that explore some of the possibilities for the world of work.
The ‘official future’
First, let’s consider the ‘official future’. If you extrapolate directly from current trends and mainstream thinking around work and automation, you get to a world where many formerly middle-class jobs are automated, or fragmented into discrete tasks and outsourced; the productivity gains from automation are pocketed, as income by the elite, and inequality mushroom further; precarious work patterns become the new normal, and most economies become two-tier as the historical middle-classes are hollowed out; more risks are pushed down onto individuals from governments and business; and welfare nets are cut to the absolute minimum. This world feels familiar, if rather depressing, with a stressed populace mostly stranded in an ultra-capitalist gig economy and competing in the ‘human cloud’ for piecemeal, insecure, underpaid, heavily monitored work.
Precarious working patterns are evident in signals of change today. For instance, updated data on US incomes from 2009 to 2012 show the top 1% of earners captured 91% of the GDP growth following the 2007–2009 financial crisis and recession . In the UK, the jobs recovery has been characterised by a growth in self-employment. Since 2010, 40% of the rise in jobs has been in self-employment whilst average incomes amongst the group have fallen. Although some would consider this to indicate entrepreneurialism, there is an increase in those saying they are searching for another job for more hours — indicating a rise in precarious, insecure work. The US has also seen a rise in the self-employed, with recent studies finding 34% of US workers are engaged in freelance work of some sort.
For those in work, heavy monitoring is becoming par for the course. In 2013, Channel 4 News reported on worker testimonies that Amazon used GPS devices fitted to workers for tracking parcels to also track the movements and speed of workers. Reports detailed a strict monitoring of worker time in which travelling to and from the canteen and going through search points for stolen goods was carried out during the 30 minute lunch break in a 10−hour shift, leaving workers with just 10 minutes. Penalties were issued to workers for talking to colleagues, taking sick leave or spending too long in the bathroom. The company was also criticised for its use of zero hours contracts — which require employees to be available for work but provide no guarantee of hours or work on any particular day. Amazon’s statement said: “We do not use GPS to track associates’ movements. We use technology to facilitate the efficient flow of customer orders through the fulfilment process.”
The gig economy
Next, consider a world where the gig economy is a more positive experience for workers and is structured to make peer-to-peer collaboration and innovation easier. Network effects are better understood and policies are in place to mitigate the ‘winner takes most’ tendency and restrain large peer-to-peer providers from monopolising access to the market place or becoming rent seekers. Work for most people is more self-directed and entrepreneurial — which suits the young but can be a difficult shift for those who need more security, such as families. Automation in this future tends to augment rather than replace most work, and to facilitate new forms of employment. This world is disruptive to big business and favours agile SMEs — small and medium-sized enterprises.
Again, elements of this world are emerging today. A London start-up is crowdsourcing knowledge work by breaking up complex projects into discrete tasks, called HITs (human intelligence tasks), that previously were done by a single person. For companies, the Smarties platform offers “instant access to a distributed, scalable and on-demand network of over 1,000 young experts in science, engineering, technology and innovation that can respond rapidly to solve a range of problems”. The company claims that the separation and distribution of knowledge tasks leads to dramatic results, with multiple problem-solvers completing projects faster and drawing on a wider pool of ideas.
Demand for such jobs is evident: a report on the transformation of UK graduate career aspirations found freelancing is now seen as a highly attractive and lucrative career option by 87% of students with first- or second-class degrees. Other platforms for HITs include Amazon’s Mechanical Turk and the global freelancing marketplace Elance. Smarties aims to provide consultancy services that indicate a step towards more ‘guilded’ knowledge industries for the ‘on-demand’ economy.
The well-being economy
Finally, it’s worth considering another world again, where this time the productivity gains from automation are not pocketed as income by the elite or used for innovation but taken as leisure by the masses instead. This is a world of short working hours, less frenetic innovation, more cultural participation, shared jobs and a universal basic income (UBI) in many countries — a version of a well-being economy. Interestingly, there are several signals pointing to this world, even though it feels distant from the present mainstream.
What signals are we seeing of this world? Results of a trial in six-hour working days at a retirement home in Gothenburg, Sweden, suggest staff are happier and more energetic, and the quality of care has increased. Nurses report that whilst they used to be exhausted, they are now more alert and have more energy for their work and for their family life. Conversely, young associates at investment banks told Bloomberg about the detrimental impact of 70–90 hour work weeks on their health and relationships.
The president of the UK Faculty of Public Health, Professor John Ashton, cited inequality as the biggest public health challenge, and recommended a reduction of the working week from five to four days to combat work-related stress and to redistribute work from those who are working too much to those who are unable to find employment. He said: “When you look at the way we lead our lives, the stress that people are under, the pressure on time and sickness absence, [work-related] mental health is clearly a major issue. We should be moving towards a four-day week … the problem we have in the world of work is you’ve got a proportion of the population that are working too hard and a proportion that haven’t got jobs.”
And what about not working at all? Last year, the Dutch City of Utrecht announced trials of an unconditional payment to the unemployed of €900 per month, as part of an attempt to simplify complex welfare systems and explore the best way to support people to find employment. In December, news emerged of Finland investing €20 million on an even more comprehensive and rigorous trial. This is not limited to the unemployed, and will capture the effect the payment has on those in work. It’s likely to include a sample of 100,000 people across the country and begin in 2017. It’s hoped a UBI might better respond to changes in the labour market, where there has been an increase in those in part-time, self-employed and temporary work who are ill-served by means-tested benefits. It’s also suggested that a UBI could overcome disincentives for the unemployed to take work either because it’s casual or part time or where benefit withdrawal results in a high effective marginal tax rate. The research ques — tions for the trial include: How much people on a basic income want to work? And what is their level of well-being and happiness?
Which world do we want?
These three worlds are of course not the only possibilities — there are infinite others. But these particular worlds are interesting as a related set because many of the differences between them will result from the societal decisions that we take together over the next few years, both consciously and unconsciously. With this in mind, what insights can we gain from these imagined futures?
What’s immediately clear is that the ‘official future’ of work is terrible for well-being for almost everyone. In this world, even the fortunate few in secure employment suffer from the stress of constantly competing and staying up to scratch for the scarce plum — and heavily monitored — jobs. Anxiety and poor mental health are widespread at all levels of society. Most people are surplus to requirements from the point of view of the labour market, which does not incentivise employers to treat them well or invest in them. This world is also politically and economically unstable, as the class of under-employed people with little to lose swells in industrialised countries. Bearing all this in mind, it is extraordinary that few alternatives to this ‘official future’ seem to be considered.
The next insight is that a great deal hinges on what happens to the gains for productivity that are expected to accrue from automation. The ‘official future’ assumes that these will go almost entirely to the owners of the automated systems or platforms, but this is not inevitable and is, in fact, a political choice. Sharing these gains more widely across society opens up two further options — to use them for innovation, or for leisure. Both of these seem more promising for well-being and sustainability than the current trajectory.
Using them for innovation involves thinking more creatively about automation than simply using it to replace jobs. It means using automation and networked systems to enable or augment new ways of working, new modes of organisation and new ways of adding value.
This is already starting to happen — for example, the new platform Smarties aims to provide a way for businesses to reliably crowdsource complex knowledge work from a pool of select graduates — a sort of Uber for intellectual labour that gives workers the flexibility to work in their own time. Like Uber, if this model works, it is likely to be highly disruptive — but it doesn’t necessarily have to lead to the same rent-extracting, monopolistic place. The complex nature of knowledge work may provide more fertile ground for multiple competing platforms that specialise in different areas and have varied strengths (e.g. more diverse perspectives versus more Oxbridge students) and the workers themselves are likely to retain greater bargaining power if platforms want to secure access to the ‘best’ ones.
While some knowledge work can be outsourced and automated, a great deal is culturally specific and reliant on experience, tacit knowledge and relationships. So, there are some grounds for optimism that a ‘winner takes most’ dynamic can be avoided as knowledge work becomes augmented by automation, but this tendency still has to be recognised, and guarded against. A world that is dominated by ‘gig economy’ working patterns needs to find ways to prevent gatekeepers to the marketplace becoming too powerful.
This might also mean thinking seriously about facilitating access to new forms of production such as local digital fabrication. Peer-to-peer production, distribution and sharing models have still yet to reach their potential, and could lead to a much more decentralised world where people access and produce much of what they need themselves, and have less need for traditional patterns of employment.
However, the real potential game-changer happens if most of the productivity gains from automation are taken as leisure, as in the third scenario. This would mean sharing and redistributing the diminishing quantity of socially necessary work by moving to a 30− or even 20−hour work week. If automation lives up to the hype and does automate nearly half of jobs all away, there is an opportunity to fundamentally rethink our relationship with work, and share the gains from automation via mechanisms such as a UBI.
Although often superficially dismissed as utopian, the UBI is an idea that is gaining traction. The few UBI schemes that have been piloted so far seem to have interesting and counterintuitive effects. A recent 18-month pilot in India among the rural poor was found to boost health and educational outcomes, equity and emancipation, and to increase local economic activity and work. The Alaskan Permanent Fund dividend — while not considered a ‘true’ UBI as it is far below subsistence level but, nonetheless gives each resident an unconditional annual grant of around $2,000 — is credited with moderating inequality, strengthening social stability and boosting the local economy. Finland is now reported as planning to undertake a major UBI experiment in 2017.
If universal income is available at or near subsistence level, work then becomes a more voluntary activity to top-up income — and more time is freed up for people to do such things as pursuing personal projects, starting their own enterprises and spending time with the family. The real purpose of work becomes a much more interesting question in such a world. Do we need it for personal fulfilment? Expert opinion seems to agree that purposeful, self-directed work is important for mental health — but it certainly doesn’t have to be full time. Perhaps there can be different ways of sharing such work so that many more people can have access to it, in ways that fit around their lives.
In terms of well-being, the conversion of productivity gains to reductions in working hours could be the step-change that is needed to deal with the serious mental health crisis that is currently building globally. More people now die globally from suicide than from all wars and natural disasters combined, and depression is the leading cause of disability worldwide. Rising levels of stress, anxiety, alienation and social isolation are thought to be contributory factors. A move to reduce working hours while maintaining income would reduce stress and allow more time for investing in the family and social relationships that are crucial to well-being. The president of the UK Faculty of Public Health recently recommended a move to a four-day week to combat work-related stress and redistribute work away from those who are overworked and towards the unemployed.
It may also be the step-change that is required for long-term sustainability. If 50% of jobs are displaced by automation, creating new jobs for those workers at full-time hours implies a doubling of global GDP. Although this sounds positive, GDP does not actually measure wealth or social progress — instead it measures the monetary value of all goods and services produced in a period, largely extracted from natural resources and dumped as waste and pollution in environmental ‘sinks’ such as rivers and oceans. As such, global GDP has been a reasonable proxy indicator for environmental damage, and is likely to remain so over the next two decades. Instead of producing an ever-increasing amount of such goods and services by working the same hours indefinitely as productivity increases, we need to find intelligent ways to limit the natural resources we extract, and distribute and consume them more equitably. Using productivity gains to work fewer hours could be an important step in this direction.
While we don’t expect any of the scenarios described here to fully materialise, it’s clear that many positive and interesting possibilities are still very much open for the future of work. To make the most of these possibilities, we need to open up the debate about what happens to the expected productivity gains from automation. How can we share these gains widely, and translate them into leisure time? How might organisations and businesses enable new working patterns to emerge that serve both the well-being of workers and the needs of business and society?
Leaders need to carefully consider the values and principles they use to guide their organisations through this time of disruption, so that increasing automation in the workplace is used to serve and benefit humanity, rather than the other way around.
Joy Green is a Futures Researcher at Forum for the Future. Additional research by Ben Irvine.
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With digital capabilities revolutionising the world of work, can we work in ways that enhance our health and wellbeing — and even that of the planet?
Emmanuel Saez (2015) Striking it Richer: The Evolution of Top Incomes in the United States, University of California, Berkeley
De Stad Utrecht (16 June 2015) ‘Utrecht to start experiment with basic income’
Originally published at thefuturescentre.org on February 22, 2016.