Discussion Paper – Future of Work January 2018
Live Well Tasmania (LWT) was established in 2015 with a mission to help youth achieve wellbeing via a whole of community wellbeing approach. LWT is particularly concerned about ensuring that the whole way that work is distributed and the types of work that are available be transformed to support the wellbeing of youth, particularly to avoid an ongoing ‘Lost Generation’ effect. Dr Robin Krabbe is the author of this paper, and is the coordinator of Live Well Tasmania. She has a PhD which used socio-economics and related disciplines to analyse decentralised methods of governance to advance social, economic and environmental governance.
This paper in particular seeks to address the following terms of reference: the future earnings, job security, employment status and working patterns of Australians; the wider effects of that change on inequality, the economy, government and society; and international efforts to address that change.
This paper contends that the approach we take to work and workers is one of the most important factors of the extent to which humanity can live successfully into the future. The importance of this Senate Enquiry therefore cannot be over-estimated, and we welcome this opportunity to have input. We are at a monumental time in human history where levels of technological development mean we can reframe work and ensure everyone has the opportunity to do meaningful work as a vital basis for wellbeing. One benefit of this is the capacity to reduce expensive regulatory systems to compel people to work, which is particularly required when people experience work as alienating, that is, detrimental to their health and wellbeing, which many people currently do. The main point of this paper is that given that meaningful work is a vital requirement for human health and wellbeing (Wilcock, 2006), and given the need for new models to ensure this occurs, this paper calls for a Job Guarantee to be implemented forthwith as one such important model. Unless this occurs, a significant amount of social and economic problems will escalate, for example, health problems are likely to increase due to predicted decreases in particularly private sector employment, placing increased pressure on government spending. This paper makes the following three main points:
Having meaningful work is a vital part of health and wellbeing. There is a crisis of disconnection from meaningful work that has significant consequences for our future. Technological development means that work can now be a means for every person to discover their ‘calling’ or ‘comparative advantage’
The changing nature of work has had profound consequences which include the trend for a reduction in private sector jobs focussing on producing material goods, due to a combination of automation – one crucial consequence of which is that we now have a ‘post-scarce’ society, we can produce all the material goods we need with a fraction of the workforce we once did (Streithorst, 2013), and a lack of demand because of low wages also reduces employment. Secondly currently and into the future work opportunities require ‘21st Century’ skills, and hence transformation of educational systems. Whether it is considered the major priority of policy is to increase global competitiveness, or address social, economic and environmental sustainability, the policy recommendation is the same – we must invest in people, including in our capacity to be innovative and engage in lifelong learning
Given the above points, a Job Guarantee (especially for our youth) is essential for well functioning societies. Community led projects, in particular using schemes like Time Banks, can address many of the issues mentioned above. They are also an effective means of managing Job Guarantee programs. It is in community settings that the multiple barriers many disadvantaged and long term unemployed experience can also be addressed.
The main conclusion of this paper is that the changed conditions of today’s world such as post-industrialism including high levels of automation, mean we can now focus work on things like health and education, which dramatically affect quality of life. More specifically:
A priority is to address the many challenges we currently face in mobilising the significant potential every person has to contribute to a sustainable future, and to take advantage of the investing in people in ways that prepare us for the future and to steer society towards this better future. In some respects, it is a moot point of how many jobs will be made redundant by technology; the main assumption of this paper is that no amount of unemployment is justifiable.
We need bold changes to the way we ensure everyone has both economic security, and meaningful work or other means of contributing productively to society in a way that supports individual feelings of worth and hence mental health. A Job Guarantee, if structured in a way that recognises the legacy of previous systems on people’s expectations, capabilities and needs, can satisfy both of these. We have reached a point in technological development where we can decouple economic security and our contribution to a sustainable society via work.
1.The importance of ‘work’ for human functioning and hence societal functioning
That people experience work as supporting their wellbeing is crucial for their own productivity and crucial for societal functioning. The field of Occupational Science is one of many disciplines which highlights the crucial importance of work for physical and mental health. (Wilcock, 2006). To corroborate this view, research into the effects of unemployment show a correlation between lack of work and reduced health outcomes (Liem and Rayman, 1982, Hoare and Machin, 2009). Likewise research into the effects of ‘precarious’ employment (Lewchuk, Clarke et al., 2008). Research from psychology finds that feeling valued and having a purpose in life are both crucial for wellbeing (George and Park, 2016), and in turn, work is the prime means of achieving both of these. ‘Compensating’ people for not having work via the welfare system is not an efficient policy. As Hoare and Machin (2009) state, “[i]t is generally assumed that, since the Great Depression, the most devastating consequences of unemployment have been minimised by social welfare programs” (p 1116). However evidence shows this is not the case (Dixon, 1992), and as a consequence, the social welfare program itself is becoming increasingly costly. Relatedly, Henman and Perry (2002) specifically analyse whether ‘welfare dependency’ has increased; they found that the proportion of workforce age people receiving social security payments grew from 4% in 1966 to 21% in 2000 (noting that this includes other categories apart from unemployed benefits).
More broadly Dixon (1992) notes that some of the adverse outcomes of unemployment are high levels of indebtedness, homelessness and housing insecurity, family breakdown, reduced psychological health, and severe financial hardship in families. The flow on effects of unemployment beyond this include reduced community savings and investment, reduced taxation revenue (both income and goods and services taxation), increased government spending on social security and other social welfare assistance; and increased private and government spending resulting, for example, from the increased use of public services (particularly health, housing, and community services), crime and delinquency, and breakdowns in marriage and family support networks (Dixon 1992).
Crisis of disconnection and alienation from work
Lane (1992) notes that over time work has become to be seen by many as a ‘disutility’, which is not rewarding in itself but must be compensated for by wages, in turn we are now dependent on these wages for our economic survival and wellbeing. Cassells (2017) notes from data from the Australian government’s recent ‘Household, Income and Labour Dynamics in Australia (HILDA) Survey’ that levels of satisfaction at work are low – only 33% of Gen Z, 24% of Gen Y and 28% of Gen X reported being very satisfied in their jobs. In turn Wynne (2017) points out the costs of people who are not happy at work for example in terms of power productivity, more sick days etc.
Salavecz et al. (2010) found in their study of Western and Eastern Europe workplaces that psychosocial stress is generally increasing, leading to accelerating absenteeism and/or “presentism” rates (that is, attending work but with reduced productivity), leading to adverse outcomes for the individuals, the companies, and the societies. The fact that many do not experience their work as rewarding in itself means costly monitoring and control methods must be used to ensure people do attend work to the extent expected (Just and Hanks, 2015).
Contributing via individual comparative advantage
Work should be a means of every person discovering their ‘comparative advantage’ (see Human Development approach)
Work as calling is
2.The changing nature of work- from private sector to public sector jobs?
Rifkin (2004) calls the current age ‘The End of Work’, whereby automation has already changed the supply of work, and will continue to do so. This paper reframes this concept to ‘The End of Private Work’, but the beginning of a whole new world of self-motivated, meaningful, publicly orientated work. We now already have or are rapidly inventing robots to perform mundane, dirty, unsafe work, which many people have not found meaningful. Sorely needed however is a huge array of work to address social, economic and environmental sustainability. Private sector jobs tend to be aimed at profitability; public sector jobs can be directed much more explicitly towards increased quality of life, particularly in the areas of education and health.
The post scarcity society thesis Streithorst, 2013) contends in effect that jobs that focus on material production (predominantly private sector jobs) will become scarcer and scarcer, while jobs focussing on for example health and education will become more and more important. For example, Georgeson and Harrison (2015), in analysing the ‘accelerated decline of the manufacturing sector’, state that in the 5 years to December 2013, 99,000 jobs were lost from the industry.
Change from full time, stable employment to rising unemployment and precarious employment
More broadly, in this age where technology has changed so dramatically the nature of how we produce the things we need, it is no longer possible to rely on having full time work to ensure economic security. Brass (2014) for example notes that In 1964, only 7% of all Australians who had a job did not work full-time, by 1984 this was 25% and in 2014 it was 32%. Relatedly it is reported that financial issues are rated as the top cause of stress for Australians in 2015 (Australian Psychological Society, 2015). About 70% of younger households reported at least one indicator of financial stress and/or missing out experiences, for example they could not afford leisure or hobby activities in the previous 12 months.(Australian Bureau of Statistics, 2016). Brass (2014) implies that part-time wages are not sufficient to support ‘thriving’ let alone surviving. Hence we can no longer depend on our current system of relying on private sector employment, combined with limiting expenditure on public sector jobs. There is a substantial amount of meaningful work such as in health and education, as well as environmental work that the private sector will not pay for, that is vital for our quality of life.
There has been an increase in ‘precarious’ employment, such as casual and part time (Herrmann and Maesen, 2008) which makes it difficult economically and socially for many people. Denny (2017) notes that in Tasmania, younger age groups are increasingly only gaining part time employment, and/or have a significant gap between finishing schooling and finding their first job.
The ‘Lost Generation’- reduced opportunities for youth
Steuerle et al (2013) note that stagnant wages, diminishing job opportunities, and inability to purchase housing are the reality for our youth. They point out that if these generations cannot accumulate material resources, they will be less able to support themselves when they eventually retire. This ﬁnancial uncertainty could effect the whole economy, since entrepreneurial activity, saving, and investment tend to build on a base of conﬁdence and growing wealth. Woodruff (Woodruff, 2013) confirms this finding, stating that in the USA, the young are leaving college with an average $27,000 debt load and have a harder time finding jobs that pay well, while facing more expensive health care and housing costs.
The opportunity for meaningful work for all
Ranis (2004) notes that human capital also known as human development, is important for the development of the economy. He points out that a central element of economic development is allowing people to discover and develop their ‘comparative advantage’, whereby an increase in peoples capabilities and functioning’s should allow more of them to pursue occupations in which they are most productive. Likewise Phillippe et al. (2009) found that when engage in an activity for the enjoyment they get out of it, they experience higher rates of wellbeing. Work can provide this enjoyment for people, if it is transformed as recommended by this paper.
In case this paper is seen as unrealistically utopian, two important issues are highlighted as caveats to the call for guaranteed meaningful employment for all. The first is that it is likely at least in the short to medium term that there will be work that needs to be done which some people do not particularly enjoy and/or which they may not find particularly ‘meaningful’ -while recognising that it is often negative relationships with employers that is often the reason why many people do not enjoy their work – see Cassells (2017). However, job sharing is one solution to ensure this type of work is shared. Secondly, it is recognised that some compulsion to work has been shown to be necessary for example where people have become discouraged from seeking work, and have little belief that work can be enjoyable, satisfying or at least not detrimental to one’s wellbeing. This paper acknowledges the substantial research showing that these beliefs can be changed given enough social support and the right kinds of interventions (Cohen and Sherman, 2014), particularly within community settings (Kilpatrick and Abbott-Chapman, 2005).
3.The urgent need for a community based Job Guarantee
All the points above point to the urgent need for a Job Guarantee, as a variation of the increasingly called for Universal Basic Income. Mitchell et al (2003) have drawn on substantial labour market research to highlight this in their call for a Job Guarantee, which is based on public sector jobs being provided for all who want them. As Mitchell et al. (2003) state, “chronic joblessness is a major source of hardship, division and insecurity”. It negatively affects our capacity to work cooperatively together to face our current political-economic and environmental challenges”, which is all the more crucial given the size of these challenges.
The following are some of the variations of Basic Income and Job Guarantee:
Universal Basic Income – a non-means tested and non-work tested payment made to all citizens
Job Guarantee/Employer of Last resort – the government employs all under-employed and unemployed who are ready, willing, and able to work in the public sector at a base wage
Community-based Basic Income – the socioeconomic participation of all citizens is strongly encouraged, but income payments are made regardless of participation
Participation Income – payment made to all citizens in return for a very broadly conceived and tailored level of socioeconomic participation
Community-based Participation Income – payments are made depending on a very broadly conceived and tailored level of socioeconomic participation of all citizens, facilitated by a Community Development Coalition (CDC). A CDC is a formal partnership between government and non-government groups.
Other terms and variations include Stakeholder Income, citizens dividend/income and negative income tax or tax credits. The three main aims for Basic Income (BI) and their variations posed here are to provide income (material) security, with the priority of addressing poverty; to provide employment (addressing needs of feeling valued), including encouraging social enterprise, microbusiness and self-employment, and thirdly to enhance human and social/community capital development.
There is a difference between an income guarantee such as universal Basic Income, and a job guarantee. An income guarantee is aimed at a more narrower goal of economic security, versus a Job Guarantee which aims at building people’s skills and capabilities to contribute to society. A Universal Basic Income assumes that left to our own devices, we will spontaneously cooperate to deliver all the services that the private sector does not deliver. A Job Guarantee recognises the diversity of people’s skills and attitudes to work, and incorporates these into its planning processes.
Many countries in response are experimenting with a Youth Guarantee (Escudero and Mourelo, 2015). Escudero and Mourelo report on unprecedented levels of youth unemployment, which reached 23.5 per cent in Europe at the end of 2012, and exceeded 50 per cent in some countries – such as Greece (57.9 per cent) and Spain (54.8 per cent). They further contend that this “unsustainable situation threatened to delay economic recovery indefinitely and put the European model of social wellbeing in grave danger. It also brought long-lasting detrimental consequences for young people, such as permanent future income losses, skills erosion and the increased risk of discouragement and inactivity associated with prolonged unemployment spells. As such, it called for a forceful response on the part of the European institutions, which agreed, at the start of 2013, to implement a Europewide youth guarantee programme”. As part of the program, they stated that “their proper implementation often requires the reform of vocational training systems, education systems and public employment services (PES). However, the fiscal price tag … should be viewed as an investment, given the significant reduction that it will produce, if effective, in the costs associated with youth unemployment.
A crucial aspect of a Job Guarantee, and where a community-based version has huge advantages, is the importance of analysing the fit between what individuals are capable of, and what is considered ‘a job’. For a person who struggles to interact positively with others, who has not had the opportunity to learn basic literacy and numeracy skills, or technical skills, many jobs are just too challenging. However under the principle of recognising every person has something to contribute, combined with the idea that every time we help another person we are increasing our own skills, (Bienefeld, 2002), the time invested in this process is well worth the effort.
We mention two types of Community Managed Employment approaches, which can be combined to address the dual needs of economic security and meaningful work. The first is a type of Community Exchange scheme, called timebanking. Fryar (Fryar, 2012) Time banking is a volunteering scheme based on the principle of reciprocity, whereby participants earn and then trade credits of time with other registered members. For Ryan-Collins et al, (2008), there are four basic principles which make Timebanking a highly effective means of both ensuring economic security and providing meaningful opportunities to participate in satisfying both social and economic needs. The first recognises that everyone is an assets; people themselves are the real wealth of society. Secondly is the principle of valuing work differently, to recognise that there is a substantial amount of work people do which is not valued as such – raising families, looking after those who are frail and vulnerable, and doing environmental work. Thirdly Timebanking teaches people habits vital to a ‘work ethic’, of reciprocity, that when you receive something of value from another, you are obliged to contribute in response. – This is the basis of trust between people and fosters mutual respect. The fourth vital benefit of Timebanking is that it fosters social networks, recognising that people’s physical and mental well-being depends on strong, relationships.
It may seem this is peripheral to the subject of the future of work and workers. This discussion highlights however that in our new reality it is not waged employment as we currently know it that will be the basis of how people contribute to society, and which will ensure sufficient levels of health and wellbeing which are vital for a well functioning society. Governments, business and communities must work together to facilitate new models. One significant benefit of community driven approaches is in relation to long term unemployment. Many of these people face multiple barriers to employment, so expecting them to eventually get a job as long as they apply for enough jobs is very unrealistic. Instead substantial support is needed to address the barriers, which are often psychosocial
Other reasons for a Job Guarantee/public sector spending
Iveresen and Cusack (2000) note that our increased exposure to global markets leads to greater risks for workers, and hence increased calls for ‘expansionary spending policies’ by governments to ameliorate these risks. Ultimately, the worse off people are because of inadequacies of our policies regarding providing living wages to all, the more the economy suffers.
How would it be funded?
Those who subscribe to modern monetary theory (for example Glotzer, 2016, Mitchell and Fazi, 2017) contend that via fiat currency, government has an unlimited capacity to issue currency, and hence a significant capacity at least in theory to provide public employment opportunities via “Quantitative Easing’. A “buffer stock” of labor would then be available that can at least in theory switch to the private sector when/if these jobs become available. The Centre for Full Employment and Equity in NSW has done significant work to show this will not lead to inflation (see for example Quirk, Allen et al., 2006 ). One reason this is predicted to be the case is that the level of the income at least initially would not be high enough to create inflation.
International examples of Basic Income experiments
While Finland, Canada, The Netherlands, USA, Scotland and France are either currently trialling or considering trialling some form of BI (McFarland, 2017, Wispelaere and Stirton, 2017), as well as Kenya (Lowrey, 2017) and Uganda (McFarland 2017), one prominent example of an actual trial of relevance here comes from Argentina (Kostzer, 2008). Following one of the worst social and economic crises in its history crisis in 2001, the government implemented an ‘Employer of Last Resort’/Job creation program, called ‘Plan Jefes’. Kostzer (2008) states that Plan Jefes ‘illustrated that public employment programs can have a transformative impact on persistent socioeconomic problems such as poverty and gender disparity. Women—by far the largest group of program beneficiaries—report key benefits to their communities, families, children, and … themselves from participation in Jefes’. Further research would be beneficial in highlighting what has worked well and what are some of the persistent problems still to be addressed in these types of schemes, however on balance it seems there are hopeful signs of the feasibility of the basic concept.
Our current models of work are unsustainable and will continue to be so as long as they do not support health and wellbeing. The urgent need is to update our work and educational systems as a result of firstly the need for a new way of providing work, and secondly the new skills that are needed. We have the opportunity for the first time in history thanks to technological development to build systems where people are self-motivated to work in jobs they generally enjoy, thereby allowing work to be decoupled from economic security. This will save a substantial amount of resources currently used to compel people to work, and an increasingly expensive welfare system.
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Dr Robin Krabbe
Coordinator, Live Well Tasmania
28 Saunders Street
Wynyard TAS 7325
E: [email protected]
M: 0421 461 724