Is technology destroying jobs faster than it is creating new ones? Is it leading to more inequality?

An interesting tendency was described in recent research studies, showing that the economy is growing but this has not led to a parallel increase in the number of jobs (Rotman 2013; Herzenberg Alic 2019). The reason for this seems to be technology, which ensures productivity growth but weakens job growth. The dark side of technology is that while it still “boosts productivity and makes society wealthier”, it eliminates the need for many types of jobs and leaves the typical worker worse off than before.

How might technology increase inequality?

Historically speaking, this is not a new phenomenon: we saw this in the mechanization process that replaced people in agriculture in the nineteenth century and in the industrial automation of the twentieth century, when workers lost their jobs in the factories. However, this time it is different, the changes are coming fast, they are profound, and the job market is currently failing to adapt to these completely. And this will impact not only simple, repetitive service work, but also broader fields, such as investment banks, law firms, accounting firms and hospitals. The reason for this is that while the old technology was “blue-collar”, the new one is “white-collar”, replacing not only workers in manufacturing, but also increasingly those in offices (Baldwin 2019).

The other aspect is how the platform economy raises the level of inequality. What is evident now is that the platforms create very different work conditions for those with traditional employment relationships and those with consignments and temporary contracts. While the former have good conditions with flexible working hours and additional benefits, such as free food and transportation, the latter have very few benefits in terms of working conditions, quality of life, income, and wealth, especially in western societies (Herzenberg Alic 2019).

An analogy with the past can be found here: today’s digital fabric resembles the initial organization of the textile industry – with one capital owner distributing work to several domestic craft shops, before concentrating the workers in one building to work with steam-fueled spinning machinery. During the first wave of industrialization, workers in the same factory had the opportunity to organize themselves into unions, recalibrating the balance of power between employers and workers. In the 20th century, when the auto industry was young, Henry Ford slashed prices through mechanization and moving assembly lines, sales boomed, and Ford paid his workers well, famously saying that he wanted them to be able to buy the cars they were making. Nowadays it would be much more difficult to shift back to the interests of the many rather than the few, as only a small portion of these platforms’ value is created by digital workers; most of their value comes from the unpaid use of customer data. (Herzenberg Alic 2019).

How is TRIGGER addressing this?

One of the main objectives of TRIGGER is to understand how global governance and emerging technologies interact, and what the EU’s role is as a “regulatory superpower”. Addressing the problems of inequality created by emerging technologies is an important part of TRIGGER’s work.  Through public engagement activities, it aims to prepare the public for upcoming changes, by promoting relevant skills and continuous learning to build a more resilient workforce. In doing this, the project tries to give the communities a stronger voice as technologies reshape the economy and society (Herzenberg, Alic 2019).

References list:

Bearson, Dafna, Martin Kenny, and John Zysman. “New Work and Value Creation in the Platfrom Economy: A Taxonomy and Preliminary Evidence ,” March 2019.

Kenney, Martin, and John Zysman. “The Rise of Platform Economy.” Issues in Sciense and Technology XXXII, no. 3 (2016).

Kenney, Martin, Dafna Bearson , and John Zysman. “The Platform Economy Matures: Pervasive Power, Private Regulation, and Dependent Enterpreneurs.” BRIE, November 2019.

“Towards an AI Economy That Works for All,”, A Report of the Keystone Research Center Future of Work Project sponsored by The Heinz Endowments, Authors: Stephen Herzenberg, John Alic 2019.