The Future of Work

Accelerating technological innovation disrupts the job market and people’s routines.

At the turn of the 20th century, the United States underwent tremendous economic and technological change. Transitioning from an agrarian to an industrial economy created disruptions, and leaders worked for decades to prevent new business models and policies from prolonging social upheaval. At the start of the 21st century, America faces another massive transition: from an industrial to a digital economy. Facing a society polarized by inequality and poor governance, the country risks squandering opportunities to revise the social contract and redefine work.

Automation with robots threatens jobs in low-paying sectors such as retail, food service and truck driving. In just one year – 2015 to 2016 – robot sales doubled to 10 million units worldwide. Costs per unit dropped as robots became an affordable choice, especially given their efficiency and reliability. Increasing low-skilled workers’ minimum wage will drive the cost differential wider, putting many jobs at risk of full automation.

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Today, as the United States moves from an industrial to a digital economy, poor governance poses a serious barrier to expanding the definition of jobs, revising the social contract and extending models of lifetime learning.”

Some critics lament the slow maturation of the digital age. In the 25 years since the internet became ubiquitous, people haven’t gained greater power nor have their daily lives changed significantly. Access to health care, better education and reducing poverty require a coordinated and expansive approach. In many sectors, technology contributes to rising inequality and increased intolerance.

AI and machine learning are infiltrating business and infrastructure, which will impact society.

Artificial intelligence (AI) and machine learning will become more ubiquitous in more and more sectors as processing power and speed increase. AI can augment human capabilities and optimize decision-making and operational capacities with sophisticated algorithms. Space exploration, finance, transportation and defense systems all incorporate AI, which can monitor and manage resource allocations and automate temperature and humidity systems in smart buildings. China uses AI-trained facial recognition software for surveillance.

“We don’t have to bring the structural inequalities of the past into the future we create.”

AI is based on probabilistic models that sort and filter enormous amounts of data to tackle large, complex problems. AI only works as well as its programing permits, yet with deep learning systems much decision-making is opaque. Biases and inequities in society find their way into algorithms because humans design them. Such biases may, for example, favor men over women in historically male professions or discriminate against people of racial minorities.

Everyone should have access to technology, or inequality and social unrest may result.

There’s no way to separate technological innovation from its impact on the workforce. Advances aren’t beneficial if they reduce economic freedom among consumers. The Internet of Things (IoT), will transform communications, transportation and health care but will disproportionally benefit people in developed countries. For example, fifth-generation (5G) networks will connect 50 billion devices and 212 billion sensors by 2020. Machine-to-machine communications will automate processes with no need for human intervention.

“The Internet of Things will bring together faster connectivity, cloud-based storage, and billions of connected devices and digital services.”

Using sensor data in multiple applications, the IoT can enhance public safety with, for example, body cameras on police officers. It can manage water supplies with smart meters and pricing structures based on availability and use, it can detect dangerous chemicals in mines, and it can help reduce traffic congestion and pollution. However, the IoT endangers personal privacy because the billions of devices won’t have the highest levels of protection.

Emerging technologies will replace millions of jobs once performed by humans.

As more and more tasks automate and human lives improve, industrialized society is on the cusp of a world with less work. People may have more time to pursue personal goals in education, personal development, volunteering or creative pursuits. What constitutes work might change as more and more people work less. For example, Apple in 2017 had only 116,000 US employees but achieved a market value of $800 billion. To make this apparent imbalance work, Apple invests in an external supply chain, independent contractors and offshore labor.

While this phenomenon may make venture capitalists wealthy, it creates gaps in the US labor force, particularly among men between ages 25 to 54 with only a high school education and among all African-American men. Technological advances are reducing workers’ share of income, depriving them of bargaining power. There are new and better – but fewer – jobs for educated middle-class workers. Experts at Yale University and Oxford University predict a startling future: “There is a 50% chance of AI outperforming humans in all tasks in 45 years and of automating all human jobs in 120 years.”

“If current trends continue, it could well be that a generation from now a quarter of middle-aged men will be out of work at any given moment.” (former US treasury secretary Lawrence Summers)

New and better jobs exist in health and social services, hospitality, construction and the trades, state and local governments, and finance. Manufacturing will shed the most jobs – followed by agriculture, fishing, forestry and the federal government. Ironically, IT jobs will decline. Up to 375 million livelihoods may disappear due to emerging technologies. To be competitive, young people should consider educations that lead to STEM (science, technology, engineering, math) careers. Currently, there aren’t enough graduates to meet the demand. Without the skills to match employment needs, young people are more prone to crime and social disruption.

The definition of work needs expansion to include part-time labor, volunteering, parenting and mentoring.

Companies rely more than ever on a network of contracted employees dispersed across the globe. This creates what Brandeis University professor David Weil calls a “fissured workplace” that features intermittent and unreliable employment with few benefits as companies seek the cheapest labor possible. More than half of new jobs since 2010 have been temporary or contract jobs. Meaningful commitment to protections for workers remains elusive.

“It is not that new jobs won’t be created, but it is likely that older positions will be eliminated faster than new ones are created.”

Expanding the definition of work may alleviate the number of job losses to automation. The Shift Commission on Work, Workers and Technology identified four future scenarios:

1. “More work, mostly jobs (similar to the current situation)”
2. “Less work, mostly jobs (a recession scenario)”
3. “More work, mostly tasks (a sharing economy situation)”
4. “Less work, mostly tasks (a shift to volunteering, parenting and mentoring).”

Younger people, especially millennials, embrace the fourth scenario as they seek jobs that contribute to the greater good. Quality of life is important to them. In the United Kingdom, people on social assistance can receive job training credits for volunteer work. Compensating parents for staying home would have long-term benefits for society. With more leisure time, people will maintain better mental and physical health.

A new social contract to support essential services would protect workers displaced by the digital economy.

People have accrued fewer benefits in the new economy due to fewer well-paying full-time jobs. There hasn’t been enough discussion about how to protect society from disruptions that could cause social havoc. Essential services such as health care, pensions and employment insurance must adapt to a world with less work. Four approaches to redress the imbalance are:

1. “Citizen accounts with portable benefits” – Not tying benefits to jobs grants workers more protection when unemployed and more control over their segment of the social safety net. A new category called “independent worker” would pool resources with peers in a workplace instead of demanding benefits directly from employers. Employers could contribute 5% to these so-called exchanges.
2. “Paid family and parental leave” – The United States is the only Western country without comprehensive coverage for caregivers. The health and economic benefits of such policies already exist in other countries.
3. Revamping the earned income tax credit for the working poor – Raising this tax credit by even 8% would substantially reduce poverty, increase employment and offer more educational opportunities to the working poor.
4. Universal basic income (UBI) – Currently, people can only receive benefits if they are unemployed. The monetary amount for which they are eligible often keeps them in poverty. If they find part-time or freelance work, they lose their benefits. A UBI would guarantee a base income – in one model, around $2,000 a month – to every adult, with no penalties for holding a job.

“In today’s world, workers need…benefit flexibility to survive in a working environment that is turbulent and chaotic.”

These changes require large public investment; the UBI alone could double the amount currently paid out in social assistance programs in the United States. Pilot projects, as in Finland and in Canada, provide data on whether such wide-scale investment is feasible. Imposing a “robot tax” on companies that automate or increasing income taxes on the top 1% would raise capital and redistribute wealth. Reducing taxes on the wealthy in anticipation of a trickle-down effect concentrates wealth in the upper 1%.

Rapid technological change means more lifelong learning.

An estimated 65% of kids in school today will be doing jobs that don’t yet exist. Economic dislocation will be the norm in the coming decades, even in sectors that resist innovation – such as medicine and education. Sectors that don’t require higher education, such as hospitality and transportation, will experience even more disruption. Continuous learning must become the norm.

Community colleges and workplace training can help workers attain new skills quickly, but training won’t be sufficient for long-term, systemic change. Jobs will become obsolete sooner than workers can attain them.

“It is frustrating that our primary education system is doing a pretty good job at turning out the kinds of workers we needed 50 years ago.” (economist Andrew McAfee)

Worthy distance-learning options for students interested in longer-term goals exist. Popular among university students is having access to smaller packets of information disseminated and tested frequently. The Khan Academy, for example, offers 12-minute videos that students can study at their own pace. Some 54 million people learn through the Khan Academy – with improved student grades in STEM subjects.

But teamwork, critical thinking, data analysis and communication matter, and school curricula fall short in those areas. Tech-savvy students want more stimulation and assignments tailored to their learning needs and abilities. This transformation must happen soon to forestall the expansion of the gap between workforce qualifications and worker abilities.

Polarization and poor governance threaten adapting to the tech revolution.

Governments must create what former US president Barack Obama calls a “runway” to transition to the new economy. Political discontent will rise with rapid and disruptive change in business and industry. Polarization and political gridlock hamper dealing with impending structural change.

Economic inequality remains an intractable problem in the United States. Increased productivity among workers translates into fewer benefits. The wealthy consolidate power through their political involvement. The biggest donors – more than 60% – give to the Republican Party. In return, these donors want tax cuts for the wealthy and service cuts for the working poor and middle class.

“Political activism matters because the super-rich, as a group, hold policy views that are significantly different from the views held by ordinary citizens.”

US president Donald Trump’s 2016 election revealed cleavages in American culture. Most US wealth derives from dense urban areas. Those counties reprepresent only 15% of the population, produce 64% of GDP and voted for Hillary Clinton. The remaining 85% of counties produce only 36% of GDP and overwhelmingly voted for Trump. The latter group favors less globalization, less free trade, less immigration and fewer open economies.

The world and the United States are at “major inflection point” in which government intervention – long forestalled by political infighting and inertia – will become increasingly necessary. Technological advances will push more and more unskilled labor to the margins and widen the gap between the rich and poor. Strengthening the social safety net to offset the disruption will prevent social upheaval. The wealthy should learn about the dire threat to their stability posed by their wealth hoarding. Everyone must look beyond self-interest and embrace more socially responsible actions to create a more sustainable future.