The following remarks were delivered by Ronnie Goldberg, USCIB senior counsel, at the first meeting of the working groups of the XIX Inter-American Conference of Ministers of Labor (IACML) in Washington, D.C. on June 28.
First Meeting of the XIX IACML Working Groups
June 28, 2016
PANEL 1 REFLECTIONS ON THE NEW WORLD OF WORK
Remarks given by Ronnie L. Goldberg, Senior Counsel, USCIB and Deputy Vice-Chair, Business Technical Advisory Body on Labour Matters (CEATAL) to the IACML.
Many thanks to the authorities of Working Group 1 (Ministers of Labor of Brazil, Chile and Panama) for inviting me to participate on this Panel on the topic of the new world of work. I am honored to be included alongside representatives of the ILO, OECD and IADB, as well as the representative of the Ministry of Chile and of course Marta Pujadas, President of COSATE.
The views that I will express are those of both CEATAL and the International Organization of Employers (IOE). CEATAL, business advisory body to the IACML, is composed of employer associations from each OAS member state. Through these organizations, CEATAL represents literally tens of thousands of small, medium and large private employers across the Americas. The IOE, the world’s largest and most comprehensive business association with members in 142 countries, serves as the secretariat to CEATAL.
The new world of work is high on the agenda of CEATAL because business and employers’ organizations of the Americas are working to anticipate the realities that will confront their members and to provide well-constructed input to policy makers at the national, regional and international level. In common with most of the organizations and governments around this table, IOE has launched a discussion on the Future of Work, addressing many of the issues we are discussing today.
The impact of technology in the new world of work
During our own lifetimes, the context in which work is organized, distributed and performed has changed, irrevocably. In his Report to the 2015 International Labor Conference, ILO DG Guy Ryder noted that change is taking place at such a speed and at such a scale as to constitute a real transformation of the world of work. A revolution. We have had industrial and technological revolutions before. They are disruptive, but they have historically resulted in the growth of economies and productivity, as well as the creation of new jobs. Despite short-term challenges resulting from the replacement of manual labor and the need to upscale skills and competencies, the pace of transformation has historically allowed enough time for education and training institutions to catch up, i.e. to appropriately prepare young people for careers and to equip low and mid-skilled workers with new skills and competencies to function productively. At the same time, population growth accelerated at a relatively consistent rate across the affected economies.
Today, things may be different. Change is being fueled by technological advances taking place at unprecedented speed and undreamed of scope. Many studies show that technology is replacing middle-level skills that were once considered uniquely human. With the new and affordable capabilities made possible by automation, a significant number of new job opportunities and new markets will be created. At the same time existing jobs will disappear or be re-designed. In short, widespread technological change are bringing about profound changes in the way we work. Simultaneously, globalisation, and demographic trends, as well as new ways of organising the production of goods and delivery of services, are both providing a myriad of opportunities to society, and at the same time presenting considerable challenges.
To again quote Guy Ryder, “the debate about the (disruptive) effects of technological changes on jobs is some two centuries old, and the encouraging conclusion to be drawn from the historical record is that over the long term it has created more employment than it has destroyed, and has pushed overall living standards to new levels”. The question that none of us can answer is whether the current technological revolution that promises further applications in such areas as robotics, automation, 3D printing, is inherently different from what has been experienced in the past.
These are issues for all of us. Profound transformations have already taken place in the mature economies of North America. Other regions of the continent are well placed to benefit from similar transformations. They enjoy a young and numerous active population – more flexible and mobile, more technologically prepared, with greater participation by women, better educated, and more assertive – which is demanding infrastructure, health care, education, services, and opportunities for work and personal growth.
I can personally attest to this energy and potential in the region. Last week I attended the OECD Digital Economy Ministerial in Cancun. Among the collateral events was a Hackathon – a competition among more than 200 young people (nearly 40 percent young women) mostly from Mexico and elsewhere in Latin America, who divided themselves in teams and competed over a 24 hour period to develop innovative and useful apps. The winning apps were designed to facilitate the transfer of health information to emergency medical personnel, to improve security and independence for the visually impaired, and to make learning history a more immersive experience for teenagers. I took away several lessons from witnessing this phenomenon. One was the vast potential of the digital economy to bring social benefits. A second is that these young people – the workforce of the future – have different expectations and aspirations for their careers than previous generations. And a third is the importance of the major policy messages from the Ministerial: the need to preserve and extend the reach of an open Internet and the vital importance of training and education to meet the needs of the future and foster innovation and creativity.
What should we do about it?
History abounds with examples of attempts to resist innovation that should not so much be considered misguided or self-defeating, as simply impossible.
But progress can and must be shaped. It is up to both developed and developing countries of the hemisphere not only to seize the opportunities but also to help those less willing or able to adapt to face the challenges:
One important element in shaping the future of work lies in labor market regulation. Regulations are essential for the proper functioning of labor markets. They can help correct market imperfections, support social cohesion and encourage economic efficiency. Labor market regulations cover a wide spectrum, from rules governing arrangements for individual contracts to mechanisms for collective bargaining. Evidence shows that labor market regulations can have an impact on a number of economic outcomes- including job creation, job flows, trends in productivity and the speed of adjustments to shocks. The negative effects of both under and over regulation are well documented. The challenge is to develop policies that avoid the extremes and effect a balance of flexibility with worker protection.
One aspect of the necessary flexibility in the new world of work has to do with flexible work arrangements. Self-employed and independent workers are growing in number and new forms of work are appearing (crowd working, teleworking, polling of workers, portfolio work, etc). The 2015 ILO Employment and Social Outlook estimates that fewer than 20 percent of the working population has a full-time open-ended contract. The variety of contractual arrangements continues to grow; employing workers on fixed term contracts to cover seasonal peaks in production, or for a one-off assignment, or to cover for maternity or long-term sick leave are all quite normal and accepted as the new “standard” everywhere.
Demonizing non-standard jobs, either overtly or by implication, ignores the ways in which they can benefit both workers and employers. Well-designed and regulated “non-standard forms of employment” can both protect workers and help enterprises by increasing their ability to respond and adapt to market demands. They can also be a mechanism for retaining and recruiting workers, for more quickly harnessing skills and expertise and most importantly – for Latin America and the Caribbean – for fighting informality. In addition, freely chosen employment in flexible arrangements permits better reconciliation of work, life and family responsibilities. Looking to the future, we should respond to the new and changing demands of the labor market, by employing various complementary employment strategies and not simply by blocking the new, or trying to make the new fit into the old.
But as we all know, the future of work is not only about more flexible, short-term and transient forms of work but about completely new forms of work. There is every reason to believe that the platform approach begun in the taxi industry will spread to more and more sectors of the economy. At the moment, the platform economy represents a tiny part of even the U.S. economy. But it will grow, and will inevitably have an impact on employment relationships, social security and tax systems, corporate regulations and generally on labor rights. Let me be clear: When employers speak about labor rights in this context we do not do so with the intention of undermining fundamental labor principles and rights at work, but rather with the intention of ensuring that these rights and standards are meaningful in new work environments that may be very different to the way work has been organized thus far.
The debate on the new world of work in the Americas is complex and diverse. Employers and workers alike are impacted by the rapid pace of change, and business, people, skills, career management and government policies, regulations and institutions will need to adapt to accommodate the new realities.
The challenges and opportunities are different from sub region to sub region and country to country, both for developing and developed countries of the Americas.
The debate will go on for years, in international and regional bodies, and in national governments.
We are facing the rise of more flexible, short-term and transient forms of work, as well as completely new forms of work and new models of business.
These transformations will impact an array of institutional and legal frameworks including social security, taxation systems, trade and investment. To be effective, institutional and legal frameworks should be coherent with an array of policies affecting labour markets. Policies on education, skills and training are essential elements of this package.
Such developments will also have a profound impact on the employment relationship. We will need to rethink this relationship and explore new ways to extend and administer social protection. Other aspects of regulation that will be affected concern health & safety, data protection, and hours of work. We have a lot to do – and we have to do it together.
Employers are willing to provide credible input to policy makers and trade unions on how we can work together to prepare for the future. This is not only about companies and workers adapting to new technologies or accommodating the impact of social media. It is about transforming mindsets and attitudes towards work.
The Employers of the Americas are ready to bring their voice, experience and expertise to the table assisting the governments of the hemisphere. Let me give four examples of areas in which we must collaborate:
- Providing credible evidence based data. In Cancun, the OECD repeatedly made a plea for more and better information and statistics. This is essential for us to better understand the trends and developments in the labor market and the drivers behind this change. Given the rise in not only flexible forms of work but also new forms of work, a first step is to define these arrangements.
- Designing modern migration regulations and facilitating talent mobility and skills recognition. One key feature of the new world of work must be allowing workers to move across borders.
- Adapting legal regulations and institutions to the new needs of business, the workforce and workplace. It is not for people to change to ensure that regulations work but regulations themselves need to change and adapt to the new context in order to support individuals. Regulations need also to facilitate the process, instead of being an obstacle to change.
- Collaborating with schools and universities to develop a curricula and a shared practical knowledge of the market. The education system needs to change to allow a focus on new skills and lifelong learning.
There are many things we don’t know. But of one thing we can be certain – we need to rethink and reform our education curricula and our training institutions to equip both children and the existing workforce for a future we can’t predict. This must be a joint effort.