Basic income, Part III: The future of work

1. Introduction

This post is the third in our series exploring the concept of a basic income and its implications in BC. Our backgrounder provided an overview of the concept, the issues we are facing today in BC, and the potential implications of a basic income policy. Our second post investigated in more detail the current state of poverty, welfare rates and social assistance in BC. We are grateful for the high level of engagement that our series continues to receive on social media and this website, including the large number of thoughtful comments. Below we continue to engage with the common themes in the responses we’ve received. This dialogue is very important in exploring ideas and creating good policies.

Many of you have noted the current scarcity of jobs and the precarious nature of much work today. A second theme has been disagreement about the role of basic income in either dis-incentivizing people to join the workforce, or providing people the freedom and self-sufficiency required to achieve personal and professional goals. Finally, many of you spoke with optimism about the potential of basic income to exert a beneficial and potentially transformational effect on society as a whole. In responding to your comments and sketching what we believe are some of the key issues, here we explore the social impacts of precarious employment, the trend towards increasing automation of jobs, and the role that basic income could play in the changing world of work.

2. Precarious work

The world of work is changing, most dramatically due to technological advance, especially automation, but also due to a trend away from long-term, secure, full-time work with benefits, toward short-term, part-time, and contract-based work.

Finance Minister Bill Morneau stated recently that Canadians need to get used to “job churn”, defined as making a number of career changes in one’s life through short-term contract-based employment. Since the 2008-09 recession, the majority of jobs created have been part-time or temporary. The October 2016 Canadian Labour Force Survey highlights this trend: 44,000 net jobs were created across Canada in the month of October, but this number reflects a gain of 67,000 new part-time positions and a loss of 23,000 full-time positions. Men aged 25-54 have been hit particularly hard: full-time employment for this demographic declined by 63,000 positions over the past year, while part-time employment increased by 36,000 positions. The trend is the same in BC: 55,000 new jobs have been created since October 2015, but the majority (41,000) of these have been part-time positions.

Contract-based employment, which is often short-term, with fewer hours and without benefits, is also on the rise. Many speak of the rise of the “precariat” – a workforce that moves from job to job, taking temporary positions with no benefits and little job security. While some individuals prefer the flexibility of part-time or contract-based work, for most, it is not a choice: many are forced to take the jobs available, and suffer from insecurity and low incomes due to lower wages and fewer hours.

Some sectors are hit much harder than others by these trends: the natural resource industries, manufacturing, and education sectors, for example, have seen some of the largest increases in temporary and contract-based work in recent years. There are indications this trend will continue, with the majority of new jobs being part-time, temporary, or contract-based. This would mean significant implications for the financial security and well-being of huge numbers of people across British Columbia and beyond.

3. Automation

Recent years have also seen unprecedented technological advance in speed and scale, and there has been much talk recently about the impending robot revolution – when robots could increasingly replace humans in a variety of jobs, and the rate of automation outstrips the rate of job creation. We are already seeing the impact of technology on work: automated voice recognition software is already replacing many call centre workers, car assembly plants use more robots than people, and driverless cars and trucks are already significantly impacting the taxi and trucking industries.

Looking forward, a number of forecasts suggest the potential for the rapid elimination of jobs across a range of sectors: a study at the University of Oxford, for example, found that 47% of jobs in the U.S. are at “high risk” of computerization over the next two decades. The World Economic Forum’s Future of Jobs report predicts that we are entering a fourth industrial revolution that will result in the net loss of 5 million jobs across 12 leading economies over just the next 5 years. Barack Obama’s 2016 economic report predicts that jobs paying less than $20/hour face an 83% likelihood of being automated, while jobs paying between $20 and $40/hour face a 33% chance.

Some argue that predictions about the effects of automation overstate the risk: that machine-caused unemployment has been predicted before and always been misguided; that automation lowers costs and creates new jobs; and that any transition would be gradual. Yet the rate of technological advance so far has exceeded most estimates. Furthermore, many of those speaking out most loudly about the disruptive potential of technology, and the need for a basic income policy to deal with the transition, come from within the tech industry itself, and thus have the most intimate knowledge of the technology and its future potential. Y Combinator, the Silicon Valley start-up incubator, is a major proponent of basic income as a way to smooth the disruption it expects to result from technological advance, and is currently running its own basic income pilot project in California.

We are already seeing the exacerbation of inequality as a result of technological advancement, as it further concentrates wealth in the hands of the few. Automation will further exacerbate inequality, as it disproportionately impacts low and moderate paying jobs and affects some sectors more than others: jobs in transportation, manufacturing, and office and administrative support are set to be hardest hit, and soonest. Bill Morneau recently specified that truck drivers and receptionists are most likely to see their jobs disappear in the coming years: these are the second most common occupations for men and women respectively across Canada, so it goes without saying that the social ramifications of large scale job loss in these occupations would be extremely significant.

4. The Role of basic income

If automation results in job loss at the rate many are predicting, the outcome could be an unprecedented level of structural unemployment. In this scenario, a basic income would make the transition more humane, as the alternative is a large percentage of people living on current social support systems like employment insurance and income assistance, which, as discussed in our last post, leaves many recipients below the poverty line. If inequality continues to rise, redistribution of the significant financial benefits of the robot revolution – especially for those adversely affected – is a moral imperative.

Basic income could also lessen the psychological strain on those affected by precarious work today, and on those whose work may be made redundant by machines in the future. Among the many comments we received, a number of you spoke to the emotional cost of dealing with uncertain work and an insecure future; in our last post we also touched on the psychological hardships of living on social assistance in BC. Some advocates of basic income even view it as a necessary means to prevent social breakdown resulting from the widespread unemployment and poverty that automation would cause. Basic income could also provide an essential way to keep the economy going by giving people the financial means to continue their participation in the market even if they are unable to find new jobs.

Basic income could also help mitigate against rising unemployment levels due to automation. To adapt to a changing world of work, people need the freedom and means to do so. Basic income could enable those affected by automation or the rise in precarious work to retrain for new professions, attend or return to university, college or trade school, or take entrepreneurial risks. Many basic income advocates view this flexibility as a promising way to spur further innovation and job creation, and create benefits for society as a whole. Basic income could also form part of a more visionary response to a changing world of work: by restoring a measure of financial security and freedom, it could help people create meaningful work (paid or unpaid) and foster social connections, as well as supporting volunteering work and community engagement.

5. Conclusion

At this juncture in our history, the dream of a stable, long-term career is disappearing for many, and the strong possibility exists that automation will fundamentally alter our economy and make many careers obsolete. We therefore have the obligation to create forward-thinking policies that enable us to cope with the magnitude of changes that may be coming our way. But we also have an opportunity to do more than just cope. We have the opportunity to harness these changes and create a more equitable and sustainable society that works better for all of us. 

We want to know what you think about the future of work in British Columbia. Please share your thoughts on precarious work, the threat and opportunities of automation, what work means to you, and the role you think basic income could play in a shifting economy. Thank you in advance for your comments.

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