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The Future of Work: Who works for Workers in the New World of Work?

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February 17, 2019

The Future of Work: Who works for Workers in the New World of Work?

By Terrance Hunsley

Who works for Workers in the New World of Work?

Surely one of the biggest concerns of people all over the world is the disruptive transformation of work and jobs.  There are so many commissions, consultations, conferences and books, on the future of work. You would think that intelligent people would have figured out what to do by now. 

But no. These big studies mainly explain to us why we should be worried: offshoring of jobs, waning unionization,  decreasing returns to labour,  plus automation, robots, artificial intelligence, temporary jobs and platform work.  Plus a shift of power from governments to global corporations. So far, the recipes for success are mostly slogans -promote inclusive growth, help workers be smarter, faster, more skilled so they can fight harder for the good new jobs. 

In Canada, labour force survey data show that unions represent less than a third of workers, and most of those are in public sector jobs. Their wages and working conditions are not really exposed to market factors, since governments pay the salaries directly or indirectly, and their pension commitments are secured by the taxing power of the state. So most unionized workers and their employers are sheltered from private market forces. 

A tiny percentage of private workers are in self-regulating professions – doctors, lawyers, dentists, accountants, and a few more. Their ability to restrict entry into the profession – an elite privilege endowed on them by governments – allows them to restrict competition and demand high fees. 

But most workers and families are exposed to the global capitalist economy, and have no power to bargain, and very little security. Their economic and political representation is almost nonexistent. As economist Mark Blyth put it, 

(.. with liberalism and a globally integrated market) labour’s ability to command its share of the surplus declines to zero. The strike becomes a meaningless weapon. Strikes decline to function—like to zero—in the western world. And you get prolonged wage stagnation, because essentially all the surplus goes to capital. (Social Europe Jan. 10, 2019)

To be sure, wages for jobs requiring specialized skills are jumping upwards. Those people are in high demand, can find good work and good pay, and can often choose where they want to live and pay taxes. But wages in the bottom half of the scale barely move, and inequality continues to increase. Forty years ago, a Canadian CEO was paid about 40 times that of the median worker in the company. Now it is about 200 times, as noted by The Centre for Policy Alternatives. They also document the increasing precarity of workers – irregular hours, dismissal at a whim, no disability insurance, no pensions, no security.

Not much wonder that modest income workers have little faith in government and vote for people who promise to chop it down. An appreciation of their varied circumstances, the understanding of their careers and life paths, is not evident in employment statistics or political debate.

The decline of worker power has been the flip side of globalization and of what governments and economists euphemistically call “a flexible labour market”. Canadian governments do little to boost the bargaining power of non-unionized private sector workers. No government has proposed, for example,  that the benefits and protections available to public sector workers should automatically be applied to private sector work arrangements. Governments fear to tread that path because employers would be outraged. They would warn that such benefits would make Canadian workers “uncompetitive,” meaning that jobs would be shifted to countries where workers are cheaper and taxes lower.

So what could be done?

Workers’ bargaining power is decreasing almost everywhere, although unionization is relatively higher in some European countries. Legislation in Europe provides more worker protection than in Canada and requires or enables more collective wage setting or worker representation on boards.

The Global Commission on the Future of Work, sponsored by the UN International Labour Organization (ILO) has just issued its report and recommends that all workers should have a right to collective bargaining, and where labour union organizations are weak, governments should facilitate “social dialogue” and collective wage setting.

Canada could have, for example, national and provincial work councils, with representation of workers and employers organized by sector. They could recommend standards for quality of work and pay, with benchmarks and indicators. These councils could advise on worker training, adjustment, apprenticeship and accreditation,  and a minimum living wage corresponding to regional and local economies. Employers and workers could then negotiate wages above this figure. Worker representatives on corporate boards would also help this process.

Minimum wage and other labour standard legislation is predominantly a provincial responsibility in Canada, and for the most part, standards are set for the entire province. However, it might make sense to empower large cities to set minimum wages and enforce labour standards. Cities and metropolitan areas have relatively integrated economies and are economic generators. The quality of life in cities is a critical factor in the decisions of high income workers about where to live, as well as corporate decisions on where to locate. Decisions about minimum wages could correspond to the vitality and cost of living of that economy. 

And last but not least, there is little protection for workers where the ultimate employer is far removed through work fragmentation and transnational web-based management. Here, we are dealing with the limits of nation states in a global economy. The ability of governments to regulate labour standards for companies like Uber is being tested in court. But governments do have some levers to pull if necessary. And we have international structures – the OECD, World Trade Organization, regional trade agreements, the ILO, where global standards could be worked out and enforced. But it will take political courage. 

The Pearson Centre will be launching its Future of Work project in Ottawa in March, and will be seeking suggestions for bold and practical new policies. 

 

Terrance Hunsley is a Senior Fellow with The Pearson Centre.

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