The Merriam-Webster Dictionary defines work as “the labor, task, or duty that is one’s accustomed means of livelihood.” In the future, the labor, tasks, or duties that we undertake may well change, but what won’t change is our dependence on work for our livelihood. Thus, when we consider the future of work, what we should focus on is not what we do, but how we can ensure that we—and the other billions who toil each day—are duly rewarded for our efforts.
Janine Berg is a senior economist with the International Labour Organization in Geneva and recently published Labour Markets, Institutions and Inequality: Building Just Societies in the 21st Century. The views expressed in this column are her own.
Work under capitalism is about leveling playing fields—so that workers may bargain over pay and other working conditions on a more equal footing with the business or person who hires their services. The attempt at leveling has been the defining struggle of workers since the Industrial Revolution. Progress was made on this front following the First World War, with the introduction of the first labor laws, establishing the eight-hour day, minimum age for work, and prohibiting the use of noxious substances such as white phosphorous. But the greatest achievements took place in the 30 years following the Second World War, or what the French refer to as Les Trente Glorieuses (The Glorious Thirty). Labor regulation, either in the form of national laws or collective agreements, governed a vast array of areas that affected workers’ well-being, including wages, weekly hour limits, overtime and leave policies, occupational safety and health, maternity protection, and retirement and other social security benefits. Wages grew in tandem with productivity growth, creating a strong middle class in industrialized countries, and a smaller, though stable, industrial class in many developing countries.
Yet many of these protections began to wither away beginning in the 1980s. As financial markets were de-regulated, tariff barriers were reduced or eliminated, and publicly owned industries were privatized, governments across the world felt pressure to de-regulate their labor markets. The prevailing view was that the labor protections of the past were not well-suited for globalization, as they stymied the movement of workers from declining to emerging sectors, and hampered competitiveness. Legislation protecting workers from unjust dismissal and providing for severance in the case of job loss came under attack as a restraint on adaptability. Minimum wages were held down in many countries, including Mexico, where, in 2014, that wage’s real value was nearly 30-percent lower than its value in 1994, and at one-third of the level reached in 1980. Unionization and collective bargaining coverage rates fell in many parts of the world, precipitated by job losses in manufacturing, an increased use of temporary workers who were less able to unionize, and legal reform policies directed at weakening unions’ influence. As a result, average real wage growth has not kept pace with productivity growth. International Labour Organization data indicates a nearly 20-percent differential during 1999–2013 between the growth of average real wages and productivity in the United States, and an 11-percent differential in Germany.
The economic model of globalization coupled with advances in communication have made the world more interlinked than could have been imagined. And while extreme poverty has fallen in China and other parts of Asia that were able to benefit from the shift in manufacturing to their countries, the world, both among and within countries, has become highly unequal, with the middle classes of the ‘‘glorious years’’ wading into uncertain times.
Yet the response of policymakers to these trends remains the same: Labor markets need to be further de-regulated and workers need to improve their skills in order to keep up with technological advances. In Greece and other countries of Southern Europe affected by the financial crisis of recent years, bailout loans have been conditional on labor market reforms including reductions in the minimum wage, de-centralization of collective bargaining from the sector to the enterprise level, and reductions in pensions and other social programs. That the crisis originated from poor lending policies of the banks brought about by cheap credit and unregulated financial markets seems to have been forgotten.
In other parts of the world afflicted by rising levels of wage and income inequality, the prevailing mantra is to improve education, as part of a grand “race against technology,’’ to borrow from the title of the Harvard economists Goldin and Katz’s book. In policy debates, technology is presented as an uncontrollable force for which societies and workers must prepare. While education can allow individuals to improve their well-being by moving to a more lucrative profession, the overwhelming majority of jobs—in developed and developing countries alike—will not improve by having a more educated workforce. Of the current top 10 occupations in the U.S., only one is highly skilled—registered nurses. Retail salespersons and cashiers, fast-food workers, general office clerks, customer service representatives, waiters and waitresses, laborers, and janitors are the other top occupations, accounting for more than one of every five jobs in the U.S. in 2014, and not predicted to disappear anytime soon. The average annual earnings in most of these jobs in the U.S. lies just under $20,000. More education may help a fast-food worker to leave the sector, but it will do little for the person remaining in that job. In Denmark and France, where retail and fast-food workers are protected by collective agreements, these jobs provide living wages and other social benefits including paid annual and sick leave.
As we look to the future, we shouldn’t forget to reflect on the past and learn from the struggles and decades of institution building that ensured that workers’ incomes kept pace with productivity growth and that social policies provided for a minimum standard of living. Shared prosperity didn’t happen by chance; it was constructed. Thus, if we want shared prosperity in the future, we will need to act collectively to design, adapt, and establish laws, policies, and institutions that address the many changes and challenges that lie ahead.
For the Future of Work, a special project from the Center for Advanced Study in the Behavioral Sciences at Stanford University, business and labor leaders, social scientists, technology visionaries, activists, and journalists weigh in on the most consequential changes in the workplace, and what anxieties and possibilities they might produce.