They also prompted the introduction of a social security net with unemployment benefits and disability allowances. However, these policies of the 19 th and 20 th centuries will be difficult to replicate. Through the introduction of social security, the alternative to work today is not malnourishment and destitution like it used to be for peasants in the 19 th century, thus the reservation wage below which an employee will not work, is high in historical terms. Thus, if the government implements even more measures to stop standards of living from falling too far, this reservation wage will rise steadily.
And the higher the reservation wage rises the higher the probability that companies will invest in capital that substitutes for labor. In the education sector improvements might be largely incremental and innovative solutions such as massive open online courses MOOCs might mainly benefit the students that are already motivated The Economist, Thus, effective solutions to make sure that the ones that offer mainly low-skilled, replaceable labor can participate in the new innovation-driven ecosystem will be hard to come by. The challenge of overcoming the structural shift contributing to inequality within countries as well as globally and making sure that the year-old Walmart worker and the worker in Bangladesh do not suffer from automaton is not easily overcome.
Even if high-skilled workers become more productive this level of education is not easily obtainable by a displaced factory worker. Thus, many low-skilled people will compete for the same jobs, pushing down wages and widening inequality Avent, , p. If this happens, we need a way for people to get health care, pensions, and education while not fully employed and the possibility for people to be better prepared for the future.
There are multiple approaches to tackle the topic including basic incomes, expanding corporate profit-sharing, providing benefit credits for volunteerism, rethinking the school curriculum in order not to train children for inexistent jobs and encouraging life-long learning for adults West, , p.
In this chapter, we will take a closer look at some of these options to avoid the evolution of a permanent underclass with limited prospects. These measures can be split into three categories: education- and welfare-related measures, and new incentives. The topic of lifelong learning will be relevant for people whose jobs will be transformed and for those whose jobs will disappear. Thus, they will need to demonstrate flexibility and continue training throughout their lives.
However, those who have the lowest initial training also tend to receive less further training. This could be attributed to a lack of motivation and openness, which will both be important qualities in the future.
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Thus, young people should already be made aware that lifelong learning will be essential for them. It is an individual responsibility, however there are ways for the state to help Deloitte, , p One approach to alleviating the effects of job displacements and fast disruptions is the establishment of activity accounts for lifetime learning so employees can learn new skills throughout their adult life. This money could be used tax-free and the owner could rely on it to pay for learning and job retraining expenses.
The fund would not be tied to a job but would move with the person if they switched jobs or got displaced. In the future, it will be essential for adults to keep developing their skills and this fund would provide an incentive to do so West, , p. Another measure to motivate those with low qualifications is reducing the barrier to seek training. For example, retraining could be tailored more to the individual and trainings for career-changers could be different from the basic training received by school-leavers Deloitte, , p.
Switzerland has one of the lowest youth unemployment rates world-wide. One reason is that they have an education system comprised of two pillars: vocational and academic training. This provides with young people with career-focused training and specialization.
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The Swiss system has a high permeability level between the two pillars. Someone who has completed an apprenticeship or vocational training can still attend university years later after completing a vocational school diploma Deloitte. Even in the science, technology, engineering, and math STEM fields a third of students do not find positions that make use of their background. Thus, the answer is not more but different education Ford, pp.
There is a need for schools to concentrate more on the skills of the future identified in Chapter 3. Young people are the ones whose professional lives will be most affected by robotics and artificial intelligence and few are acquiring the relevant expertise West, , p.
In Switzerland, a first step in this direction was made with the Lehrplan 21 , which included media and computing into the curriculum as separate subjects. However, it is also important not just to teach how to use digital devices but also how data is organized and structured and to understand how digital technology works, fostering skills such as systems understanding and creativity Deloitte, , p. The current education system is also often geared towards turning out worker that were needed fifty years ago with a premium placed on reliably performing and repeating tasks, not focusing on social intelligence and creativity enough.
This makes students develop skills that are becoming more important such as creativity, team work, and innovation. The plan is to shift the schooling system in Finland to the phenomenon-based approach until Strauss, It is important to align the curricula and future-proof skills more closely. In a world in which less emphasis is placed on work, people might be freed up to do other things. Thus, credits and incentives for volunteering activities could prove to be valuable, since it would increase the incentive for community contributions West, , p.
Another approach is a national online marketplace of work in which people could engage in projects they are interested in such as tutoring, childcare, culture work, or disaster response West, , p.
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Additionally, there might be new jobs that are more geared around self-expression and artistry. Since people would have more leisure time, it might be good for governments to patronize the arts and culture. Additionally, they might spend more time with family and friends and strengthen social ties West, , p. This would require a radical rethinking of values and structures and might allow a lifestyle similar to hunter-gatherers before the agricultural revolution, who worked just thirty-five hours a week, even in the inhospitable conditions of the Kalahari desert, and used the rest for social interactions Harari, , p.
In a situation where a lot of people are under- or unemployed, it will be necessary to provide them with health care and other benefits outside of employment.
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The idea would be to separate the provision of benefits from employment West, , p. One approach that gained in awareness in past years is the introduction of a Basic Income Guarantee BIG. This concept was first proposed by Martin Luther King in and has gained momentum in recent years. The British economist Robert Skidelsky argues that if robots increasingly replace human labor, alternative incomes will be needed to replace wages West, , p. The objective here is to establish a safety net that also supplements low incomes without deterring people from working altogether. Multiple approaches are possible, among them an unconditional basic income paid to everyone or the guarantee of a minimum income e.
The idea behind the BIG is to protect against the negative effect of automation and decreasing the risk of innovation and entrepreneurship. It would also decrease bureaucracy and empower humans to seek the work they find valuable and empowering. That is why BIG has managed to gain supporters from both ends of the political spectrum and has gained momentum in countries such as Switzerland, the Netherlands, and Canada Santens, Even though a full basic income has never been implemented, multiple countries are currently experimenting with it.
Once again like with the education system, Finland is pioneering this idea with an experiment that started on January 1, The goal is to compare their future unemployment rate with that of the control group Manyika, et al. Of course there are many critics of this concept.
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There are two prevalent arguments. The first is that it would create a disincentive to work and a significant share of the population might decide to leave the workforce. The second is that a lot of people derive a large portion of their self-esteem from working, and a basic income might undermine this effect of employment and clash with the protestant work ethic.
However, if the basic income is structured well it should be possible to use it to lift people out of poverty without disincentivizing work.
For example the basic income could be tied to volunteer activities or some work requirements. It is likely that the percentage of people effectively dropping out of work would be low, however the absolute number would of course be quite visible. Additionally, this would be a self-selection, where the individuals remaining in the workforce are the ones that are industrious and ambitious Ford, p. So the question is whether these people should be forced to do effectively pointless work, when basic income could free them up to enjoy their lives and raising the pay for productive workers.
So actually this disincentive to work might be the point. With time, more of the workforce might find it attractive to abandon the work-by-necessity system to engage in leisurely pursuits. It could be the way to a utopia fueled by advances in labor-saving technologies Avent, , p. Some of the most vocal critics of the basic income actually include workers and trade unions because they do not want the link between work and compensation severed.
This is understandable, since even just a rise in the minimum wage would benefit many worker on the one hand, but would discourage companies from using previously cheap labor on the other hand Avent, Probably, there will not be a widely implemented BIG anytime soon. But it took the chaos of the first half of the 20 th century to improve the inequality that had previously developed, with war, inflation, and the depression disrupting the status quo.
A new era of taxation and the welfare state was introduced, which led to unparalleled economic growth. This was not an easy or inevitable process and neither will future measures to improve society be easily implemented Piketty, A lot of experts are quite fatalistic when discussing a jobless future.