What we are seeing now are probably some of the biggest changes in labor markets we have seen for a very long time. Of course, if you put it into historical perspective, they are not quite as big as 200 years ago, when the economy was urbanizing. Those were much bigger changes. But if we take the period since the World Wars, since the 1950s, we’re certainly seeing more changes now than at any period before.
The reason, I think, is not that something peculiar happened in labor markets. The reason is the change in structure of the economy—that we are moving away from traditional manufacturing, even away from traditional services. New technologies, especially digital technology, computerization, and the internet, are enabling us to work from home, us to work from different locations, and closer international cooperation and collaboration. Labor markets are responding to those changes by creating a lot of atypical jobs—the gig economy, the zero-hours contracts—jobs that, although they look full time, don’t have as many hours of work as they did traditionally.
The composition of employment, of course, is changing, with many more women coming in and men withdrawing from the labor force. It’s a good change because it’s bringing more inclusiveness, more gender equality. That’s one of the causes of change in labor markets.
To cap it all, the new technology is, I believe, of a more disruptive kind across the skills distribution in labor markets. Whereas traditionally, new technology eliminated jobs low down on the skills distribution—the automated assembly lines and that kind of thing—now we’re seeing technology that might replace quite well-trained expertise, even in the service sector, not only in the manufacturing sector.
The changes we’re seeing in labor markets will adapt to different kinds of jobs in existence. What we have to make sure of is that, first of all, those jobs are the kind of jobs that at least a section of the population that is in the labor market is willing to do. Maybe they fit their lifestyles better. A few years ago, we were saying that part-time jobs were not good jobs; they didn’t have promotion prospects as good as full-time jobs. Then, suddenly, we realized that there was a section of the population that actually preferred to have a part-time job rather than a full-time one, and now they are fully integrated into labor markets. The expectation is that the new types of jobs that we are seeing will develop in the same way—that they will be integrated into types of jobs that different types of workers want to perform.
Chosen excerpts by Job Market Monitor. Read the whole story at How can we make labor shifts work for people? | McKinsey & Company