Tech-Driven Changes in Job Markets Threaten Social Contract with Workers

“Technology has a major, if not the most important, role in shaping the continuing future of work,” said C. Vijayakumar, President and CEO, HCL Technologies, on day two of the World Economic Forum’s Jobs Reset Summit 2020.

In the next five years, machines will displace around 85 million jobs but create around 97 million new jobs across 15 industries and 26 economies, based on the Forum’s Future of Jobs Report 2020. The global recession driven by COVID-19 has accelerated this trend and created a highly uncertain outlook for global labour markets.

“The actual fact that technologies potentially allow us to work anywhere, anytime sounds extraordinarily attractive,” said Guy Ryder, Director-General of the International Labour Organization (ILO). “But if it similarly allows you to definitely tell me that I have to work anywhere, anytime, irrespective of my very own choice, it’s somewhat less attractive.” Ryder added that the gig economy - as revealed by the pandemic - has created “extraordinary vulnerability in the wonderful world of work, not simply in the developing world, but also “in the attics of Manhattan.” Freelancers aren't clear about their employment status and will end up falling through the gaps of social protection systems. “The 21st-century employment model…looks nearly the same as the 19th century,” he said, adding: “it took us a hundred years to build the institutions to place some decency into that business design.”

Sharan Burrow, General Secretary of the International Trade Union Confederation, warned that “Internet-mediated platform jobs are absolutely wearing down wages and conditions.” Burrow needed a fresh social contract between workers, employers and governments to make certain that every working person enjoys a satisfactory minimum wage for a maximum number of hours worked, universal social protection and occupational health insurance and safety as a simple right. She called for a finish to employer impunity, with “mandated homework around staff and their rights”, including adequate grievance procedures and remedies. Collective bargaining has collapsed, with 75% of men and women reporting that their incomes have stagnated or gone backward since the late 1980s. Unless we rebuild those commitments, we won’t have a good economy, said Burrow, concluding: “Flexibility doesn’t mean exploitative work.”

What's needed is massive investment in people, workplaces and jobs in growth industries. People need skilling and reskilling. Specifically, governments and companies must “spend money on social protection - the most effective lubricant of change,” according to Ryder. He remarked that change has been bad for too many people, so they will embrace change if they're reassured they won’t fall through the cracks in the process. Meanwhile, workplaces need re-engineering, where Ryder means better regulations to protect workers. And more investment must go into areas with the best prospect of job growth, including green technologies, the care economy, infrastructure and the rural economy.

Increasing public investment by 1% of GDP in advanced and developing economies would create up to 33 million new jobs, said Burrow, citing the International Monetary Fund. “We are able to double that by buying care,” she added. Vijayakumar embraced the potential of low-carbon technologies, saying: “The 21st century will be marked by the sustainable economy - tech companies have a huge role to play to create these new jobs in the intersection of climate change and public services, together with consumer products.”