Skip to content

Good jobs, bad jobs

August 12, 2013
by Brian Keeley
There's bad jobs everywhere these days

There’s bad jobs everywhere these days

If you’re relaxing on the beach – and we hope you are – work may be the last thing on your mind. But once you shake the sand off your feet and head back to the “real” world, you may be struck by the flurry of depressing stories about jobs.

Take, for instance, “zero-hours” contracts, which are causing controversy in the United Kingdom. Workers on these contracts receive no guarantee of regular work or pay; instead, says the BBC, they “only work as and when they are needed by employers, often at short notice”. According to some estimates, as many as a million workers may be on zero-hours contracts in the UK, employed by everyone from Buckingham Palace  to McDonald’s.

Some workers undoubtedly like the flexibility of these contracts; others feel exploited, especially when their contract bars them from working for anyone else, a point acknowledged by British business minister Vince Cable: “Where it is a problem is … where there is an exclusive relationship with a particular employer who actually cannot provide stable employment, or indeed any employment, that stops the worker going to another company.”

Concerns about job quality aren’t restricted to the UK. Late last month, thousands of U.S. fast-food workers went on strike to protest against low wages and there have been similar actions in New Zealand. Nobody ever flipped burgers to become a millionaire, but in the past that didn’t matter so much: Fast-food jobs were mostly for teenagers or part-timers, most of whom didn’t hang around for long. That’s no longer the case, as James Surowiecki recently pointed out: These days, “more [low-wage workers] are relying on their paychecks not for pin money or to pay for Friday-night dates but, rather, to support families.”

These stories can be seen as symptomatic of what some argue is a hollowing-out of the workforce between high and low-skilled jobs. Many of the secure and reasonably paid jobs that used to sit in the middle are vanishing, victims, in part, of technological change. According to consultants McKinsey, about half of the face-to-face service jobs that people once took for granted  – bank tellers, travel agents, typists and so on – no longer exist. That, in turn, is helping to fuel the income gap in our societies (although it should be noted that other factors – such as the decline of unions and changes in taxation –also play a role).

Of course, this isn’t the first time that technology has destroyed jobs – remember the Luddites. But, historically, each wave of technology also created new types of jobs – think of app developers, social media strategists and (if you can bear the thought) “chief listening officers”. On balance, the gains have outweighed the losses, which is part of the reason why our societies have tended to become wealthier over time.

But will this pattern continue? Not everyone is convinced. At the Massachusetts Institute of Technology, Erik Brynjolfsson and Andrew McAfee argue that the balance has begun to tilt: “They believe that rapid technological change has been destroying jobs faster than it is creating them,” reports David Rotman. They also believe that the rewards from work are increasingly divided between winners and – for want of a better word – losers: “Someone who creates a computer program to automate tax preparation might earn millions or billions of dollars while eliminating the need for countless accountants,” writes Rotman.

To be sure, the idea of making this link is not new, and it features strongly in research by the OECD, the IMF (pdf) and many others. Indeed, it was identified as far back as the 1970s by the economist Jan Tinbergen, who argued that the way incomes were distributed across society reflected in part a “race between technology and education”. When technology was winning, more rewards went to fewer people; when education was winning, more people were able to make use of technology in their work, and the rewards were spread much further.

At the moment, technology seems to be winning, which is one reason why you hear so many calls for more investment in education. But the MIT researchers seem to go further, arguing that today’s technologies and “digital versions of human intelligence” may prove to be permanent game changers: “I would like to be wrong,” Andrew McAfee says, “but when all these science-fiction technologies are deployed, what will we need all the people for?”

Useful links

OECD work on income inequality and skills

 

6 Responses
  1. Giorgio Clarotti permalink
    August 12, 2013

    So, it appears workers are becoming cheaper in Europe.
    Why not using them to repair appliances instead of throwing them away,
    harvesting mushrooms growing in fields during winter instead of throwing them away,
    or cooking at home using local vegetables instead of throwing these away…

    Looks like human labour is getting cheaper whilst resources are getting at least scarcer, if not more expensive. So with a little training and/or education, our world might be more sustainable…for everybody.

  2. Carissa Faulkner permalink
    August 13, 2013

    Technology may be one of the factors decreasing the income share in OECD countries but this is not true for developing countries. Studies show technology spill overs actually increase income share in developing countries. The difference should be distinguished in the article. Also, globalisation was left out as a main factor. It is affecting labor share at a more significant level than technology. Globalization has led to the entrance of many workers from labor abundant countries, increasing competition in the labor market. Not to mention that companies have been practicing off-shoring or at least threaten this option in order to keep wages from rising. Technology is a factor but it shouldn’t be overplayed.

  3. Ken Oliver permalink
    August 26, 2013

    Carissa’s right that its really only the developed countries that have been running the race between technology and education and recently losing it (Katz and Goldin have an excellent book on on the history of this race in the US, by the way). The poor in developing countries have mostly unambiguously gained from its spinoffs.

    How much increased inequality in OECD countries is a product of globalisation and how much is skill-biased technological change (SBTC) has been a topic of hot research and debate for 20+ years now (Tinbergen was one of the people who kicked it off). The debate is no nearer a resolution simply because the two are not seperable. It is technological change in transport and communications that has driven a lot of globalisation (containerisation of shipping, for example, has had a far bigger impact on their lives than most people realise), and it is global markets that have provided a lot of incentives for using and developing labour-destroying technology.

    There seems little any government, or even combination of governments, could do that would much change these fundamental forces even if they wished to. The costs of defying them really are very large. We have to look to palliative measures.

  4. Rachel Kasumba permalink
    September 2, 2013

    Both education and technology have contributed to job losses in several ways:

    1) More people across the globe are getting educated and at more advanced levels than in past generations, and

    2) More girls and women are enrolling in education worldwide in unprecedented numbers

    These two factors have led to a steady decline from traditional means of livelihood like small scale farming, working around the house, arts and crafts, fetching water and firewood (in emerging), etc So, today, more people are competing for less jobs – increased education levels have not kept pace with corresponding job creation in the chosen fields.

    3) Improved technology has seen small scale operations especially in agriculture, mining, and manufacturing replaced by large industrial undertakings, leading to more job loss.

    That said, we are living in a time of immense creativity and innovation, and most of us will have to re-invest our careers to survive, which is a great way to push us out of our comfort zones.

Trackbacks and Pingbacks

  1. Knowledge is Power: Emerging Markets, Mercantilism, Bad Jobs Edition
  2. Have we the skills we need to succeed? | OECD Insights Blog

Comments are closed.

Follow

Get every new post delivered to your Inbox

Join other followers: