There are five major issues that confront the development of economies, in particular, labour markets. These are the climate crisis, economic globalisation, the advent of new technologies, low wage work and underlying these issues, inequality. How we view them will determine the kinds of knowledge and skills needed to provide paid workers with good jobs. The point about these challenges is that they are inextricably linked. This has created, for many, a puzzling complexity that has provoked fierce populist reactions in countries as diverse as the United States, Britain, Brazil and Hungary. These issues can only be signalled in a short introduction but they are likely to be the enduring labour market concerns for the foreseeable future.
The climate crisis
There has been much rhetoric about seeking to create employment through a Green New Deal and there have been some very good analyses and proposals presented by Pettifor (2020), Jung and Murphy (2020) and Monbiot (2016), matched by similar accounts in many countries. But while we look to the future, we need also recognise the fear of the loss of well paid, high-skilled jobs in the carbon producing and downstream industries that have attracted populists. The complexities in the relationship of carbon production to democracy have been captured in Timothy Mitchell’s (2011) magisterial Carbon Democracy, in which he analyses the way that coal production both influenced the formation of democracy in the western world while oil led to dictatorships supported by those same democracies. Bound up with this political economy was the notion of progress through economic growth. The shift away from carbon production to green forms of energy is turbulent and caught in its vortex will be emerging labour markets based on renewable energy.
While it is clear that a focus on green jobs will create new forms of employment, what is not is the proportion of high or intermediately skilled jobs that will be created. It is possible that with careful planning career structures can be developed that will enable a significant proportion of intermedi- ately skilled jobs to be developed. The IPPR report by Jung and Murphy (2020) has listed some of the new areas for investment. These include:
- ‘Low-carbon, home-related investments (energy efficiency, low-carbon heat and zero carbon social homebuilding). Closing the huge gaps in social care and in health care could create up to 700,000 jobs by 2030. Jobs in these areas fulfil pressing social needs and at the same time are in line with a low-emission economy’ (p.4).
- ‘Investing in better public transport – such as rail and electric bus services – as well as sustainable urban transport ‘(p.4).
- ‘Carbon Capture and Storage (CCS) and hydrogen clusters which will have a critical role in delivering a net zero economy’ (p.4).
In addition, they identify areas of social need with low energy consumption such as social and health care.
The majority of these jobs will typically be created within national borders. However, it is most unlikely, even after the current pandemic, for economic nationalism to return to the past as advocated by the outgoing former President Trump. We can begin to see why by noting that what is left out of above list is the production of sustainable energy technology and this raises the question of economic globalisation.
The top 10 wind turbine manufacturers, six were from China, one each from Denmark, Germany, Spain and the United States. In all cases their markets are global.1 Of the leading solar panel producers, six are from China, two from Japan and one each from Canada and the United States.2 These examples serve to illustrate how globalisation relates to the emergence of the green economy. Here we should note that the dominance of these corporations reflects a central element in the structure of the global economy: that is, it is dominated by oligopolies. There are only a few major corporations in every major sector. In terms of the labour market, these corporations have been called by Autor et al. (2017) superstar firms. They have the ability to determine the nature and quality of jobs and where they will be globally located to maximise profit. They can also maintain their advantage in human capital through the rewards they offer, the ability to deploy skilled workers across the globe and to exclude competition from the market by buying up talent and innovative firms (Brown, Lauder, and Ashton 2011). It is not only the location of regional HQs and plants that assure their dominance but their control of supply chains (Brown, Lauder, and Sung 2015; OCED, 2017).
Given the power of labour and the financial resources that they command, the attempt to repatriate the production of goods and services to national locations is likely to be limited. The more so because many of these corporations identify as transnational. The former President Trump did try to encourage repatriation but estimates suggest that were goods, that are currently offshored, to be produced in the United States they would be much more expensive. For example, Jefferson Graham reports in the Financial Review (2018) that it is estimated that an iPhone, now made in China, which currently costs 1,000, USD would cost 2,800 USD to be made in the United States.
The problem is that it is not only low-skilled jobs that are offshored. Apple’s partnership with Foxconn to produce the iPhone has led to the establishment of high-skilled engineering groups in China (Brown, Lauder, and Cheung 2020). The key point to gain from economic globalisation is that segments of the labour market are now global in which workers can bid for jobs, anywhere, while others are nationally located. It is precisely this contrast that Goodhart (2017) captures in his phrase citizens of somewhere and citizens of nowhere: a clear reference to the political conflict caused by globalisation.
This analysis suggests that the challenge of creating good quality jobs, despite Covid-19 and the political impetus to return to economic nationalism, will be balanced between the power of the state to create well-crafted industrial policies and that of transnational corporations (TNCs).
The power of TNCs to operate globally is based on the technologies of the fourth industrial revolution and we now need to consider the impact of new technology on the labour market.
The impact of technology
There has been a significant debate about the impact of technology on the future of work. However, there are three points worth making. The first, is that in this fourth industrial revolution a range of new technologies have been brought together: the digital, the physical and the biological. Their application
has gone through two related phases. In the initial phase, which can be called that of digital Taylorism (Brown, Lauder, and Ashton 2011) complex tasks have been simplified, codified, digitalised and globa- lised: once digitalised, the work involved can be undertaken anywhere. Underlying this process is that of standardisation. It is the means by which the benefits of technological innovation have been dissemi- nated through industrial production and training (Bessen 2015). The second concerns the introduction of the technologies associated with artificial intelligence (AI). While AI is used on standardised platforms, it can personalise applications to an individual’s character and tastes. A defining characteristic is that consumers are also producers; in engaging with AI platforms they become inadvertent producers because they provide the data from which the digital superstar corporations make profit. Zuboff (2019) has argued that this has produced a new form of capitalism, surveillance capitalism.
However, the surveillance strategies of superstar firms is only one aspect of contemporary capitalism. The application of this new array of technologies can be applied across economies, including areas that have hitherto been seen as uniquely needing human interaction, as in the use of robots in care homes.
We have noted that Brown (this issue & 2019) has emphasised the importance of rejecting technological determinism. There are further reasons in support of this view. At root, this is because how new technologies are employed will depend on a range of social, political, economic and organisational factors. At the most abstract level, how a society views the nature of paid work assumes importance in this context. It will be assumed by many in liberal market forms of capitalism that work is fundamentally instrumental, it is the way to make ends meet, to acquire security and status. In contrast, if we look at the view of paid work in Germany, we see that alongside the instrumental, there is another strand that relates to identity formation. In Britain, training for sales in an electrical store can take a morning, in Germany, it may take three and a half years because it is assumed that a person who takes pride in their work and identifies with it, will be more productive. We should not be too romantic about this comparison, it exists but the numbers being trained in the vaunted German dual system has declined. At the same time, the structure of work in Germany has been highly patriarchal (Rosenfeld, Trappe., and Gornick 2004). This discussion shows that how work is understood will differ, it follows that the balance between using technology and labour will also be weighed differently in different forms of capitalism.
Whatever, the future outcomes of the application of technology, Brown (this issue) emphasises the changes that are already underway. As he puts it, technology is ‘unravelling, unbundling and recombining’ jobs, and will continue to do so. It is this insight which leads to the significance of LL, as jobs and tasks are reconfigured, as James (this issue so clearly illustrates) so new forms of learning and practice will be needed.
Low wage work
In the liberal market economies of Britain and America, the dominance of short-term instrumental- ism means that the weighing of the balance between investment in technology and labour will always be tipped in favour of technology unless, labour is so cheap that it is not worth the investment. When we consider all forms of capitalism, we observe that most countries have a sizeable low wage sector. This includes Germany and the coordinated market economies as it does Britain and the USA. In part, this is due to the development of low wage service industries which have never been able to reproduce the high wages of workers in Fordist factories. That said, there are differences in the conditions of low wage workers, depending on the nature of the society and government policies. When countries’ low wage sectors are compared, we find that there are considerable differences, depending on the degree of ‘inclusive labour relations’ that country policies exercise (Salverda and Mayhew 2009). This is another case where how paid work is viewed will determine working conditions.
When low wage work is considered, it is important not to conflate it with low skill work. Low wage work can be highly skilled and central to the working of capitalist economies as we have seen during this pandemic, yet if it is not recognised as such then the incidence of low wage work will remain. This provides part of an explanation as to why raising individual skill levels alone, cannot solve the problem of low wage work.
The consequence of these combined factors is that while there are significant differences between countries, inequality has risen in most. And it is a not only an acute social problem but economically dysfunctional (OECD, 2018). As Piketty (2014) has shown, much of the inequality has been created by what he calls supermanagers, who have arrogated to themselves, the surplus created by workers’ productivity. The consequence is that while they have become unimaginably rich, so workers wages have with some variation, stagnated. As he convincingly argues there is no justification for the wages of supermanagers in terms of orthodox economics’ view of marginal productivity, simply because the productivity of such managers cannot be established, while the wages they receive differ between countries, implying that their wages are a function of their power and the norms that deem such wealth acceptable.
This analysis suggests that raising skills on its own will not solve the problem of inequality. The central problem is that in contrast to orthodox views of human capital, labour markets are riven by social class, gender and ethnic/racial inequalities (Brown, Lauder, and Cheung 2020). The question, we started with is how good jobs that provide a living wage can be created. Skills that can be employed in future labour markets will be necessary part of the answer but only within a policy regime that recognises that skill is only one determinant of wages and that governments need to set the context in which good jobs can be created.
As we have surveyed the future of paid work so it will be apparent that we have ranged some distance from the fundamental problems that Geoff Mason and the contributors to this issue were addressing. We need to bring this discussion together. A central claim in Mason’s paper concerns the demand for intermediately skilled workers. As we emerge from the pandemic, that demand may change but there are good reasons as to why it will become a more important policy focus. When we survey the key challenges above, the search is on for jobs that are either complementary to new technology or cannot be substituted by it. Here the sectors identified by the Jung and Murphy (2020) appear to fit the bill. The jobs they identify cannot be offshored or easily substituted by technology.
There is, however, a problem. It is that while estimates can be made about projected employment in these sectors, as noted, little is said about the quality of the jobs and the skill levels required. What both employment areas need is the construction of career ladders so that workers may start at the bottom rung but will have the opportunity of gaining the skills to increase their wages: there are pilot initiatives for care workers in this country but what is required is nationwide planning that incorporates FECs, Apprenticeships and LL. This is not a novel concept there are Nordic countries where such career ladders apply to care workers and early childhood educators.
Reference to the Nordic countries does, however, signal two points. The first is that the construc- tion of such career ladders, typically, have not taken place in liberal market economies where wages in these areas have been low. Of course, orthodox economists might object that wages are low because productivity is low, although they have continued to apply the concept of marginal productivity to justify the incomes of supermanagers, despite evidence to the contrary. In the fourth industrial revolution the orthodox concept of productivity is clearly problematic (Lauder, Brown, Cheung, 2018). We need a wider conception of productivity that encompasses contribution to society and the economy (Brown, Lauder, and Cheung 2020). In the case of care workers, we might say it is the productivity of a smile that is important. As the discussion of the training of German shop assistants illustrates, productivity in areas of the service industry are intimately related to professional self-identity. If workers are to be effective in the service economy then training and identity construction need to be linked.
The second point is that both the initial education and subsequent upskilling of workers in such areas will not come cheaply. Their wages will have to increase to reflect that education and training. It will inevitably mean higher taxes in the service of redistributing the gains of rent seeking and greater equality in enhancing the quality of life, including our environment.
It is here that the nature of the policy regime assumes importance. In co-ordinated market economies the means for the construction of career ladders, certainly in initial training, exists. The tripartite construction of ‘professions’ in Germany is one example. In liberal market economies, there are examples that we can learn from, as in the case of nursing becoming a degree profession but there is no organising principle which typically involves all the stakeholders: unions, employers and the state, largely because unions have, until this pandemic, been excluded. It may be that the Conservative government’s consultation with unions augurs well for new forms of tripartite cooperation.
The bedrock for these proposals are the institutions that will provide the education and training that is needed. Given their current fragility there are two imperatives: that they are properly funded after years of underfunding and that the development of the kinds of programmes envisaged, although they have existing foundations will take years to develop. It is not only the creation of the programmes but the recruitment of highly qualified teaching staff. This suggests they should be given time to develop. There will, no doubt, be much government rhetoric that the funding for programmes will be all but instantaneous but this is a time when short-term political advantage should give way to careful consultation and planning.
It should be emphasised that providing career ladders out of low pay is just one strategy, there need to be others, from the establishment of long-term industrial strategies to the recognition that the advent of new technologies will entail periods of unemployment for workers whatever their level of skill. Alongside the retraining that should be offered by LL, this pandemic has highlighted the need for some form of universal basic income.* This would give unemployed workers the time to retrain and to consider how their skills fit available jobs. In contrast, meagre social security incomes means that unemployed workers have to take the first job offered, creating a wastage of skills. These are political choices and will not be enacted without struggle; it is up to those that think the state should have a limited role in the structuring of labour markets to advance an alternative position.
Chosen excerpts by Job Market Monitor. Read the whole story @ Full article: The roles of higher education, further education and lifelong learning in the future economy
* JMM editor’s note : we couldn’t let that one … The real need is for an adequate support from a personnal training account while training, not a minimum basic income … a “meagre social security incomes” to use the authors’ terms.