Modern production requires increasing use of intangible assets such as computerized information, innovation-generating activities, and organizational capital. Investments in these assets have been growing rapidly over the past few decades. They represent a greater share of aggregate economic activity in the United States than in Europe, although some European countries such as Sweden invest more than the US. Intangible assets are an important contributor to raising labor productivity growth, both directly through increasing capital per worker and indirectly through changing production practices. However, there is evidence that they are associated with a reduced return to labor, especially for workers with skills below university level.
[…]
Read More…
Job polarization is a major trend that took place in advanced countries’ labor markets over the past several decades. This article uses administrative data as well as established sources from the literature to achieve three aims: first, it shows how the rise of high- and low-wage occupations, and the commensurate decline of traditional mid-wage occupations, has had adverse effects on the less-skilled share of the workforce. It then identifies the underlying driving forces of job polarization, which include biased technological changes, international trade and offshoring, and pervasive shifts of the industry structure, among others. Finally, the article provides an outlook of the trends to come, for example, whether in future some high-wage jobs may decline, and discusses the interaction with policy.
[…]
Read More…
Prosumers, especially the sub-type of working consumers, are of increasing importance in various ways, including in their impact on paid employees. Working consumers are doing work traditionally done by those employees. They offer many advantages over paid employees, such as requiring little or no pay and benefits. While the increasing role of working consumers leads to the creation of many new jobs (e.g., in Amazon.com’s warehouses), they constitute a bigger but little recognized threat to many paid employees.
[…]
Read More…
The power of entrepreneurs to “create jobs” is overblown: most entrepreneurs fail, and the vast majority of those who succeed create relatively few jobs. The vast majority of jobs are “created” by legacy companies—firms that have been in business for twenty-five years or more. Still, work in a globalized, digital economy has become increasingly fragmented and unstable. Centralized workplaces—be they factories or offices—are still with us, of course, but in declining numbers. Increasingly “noncore” work functions—be it IT or transportation, food delivery or janitorial services—are outsourced to contract providers, or in some cases sent off to be done in lower-cost locations. An increasing number of us are working independently, as freelancers and contract employees. So we find ourselves faced with the challenge of making a meaning of work in which the workplace itself plays a far less central role. In a sense, we are circling back to the time of the independent tradesman, farmer, and craftsman, and toward an economy in which our working identity relies less on any particular institution and more on our relationship to the work itself.
[…]
Read More…
This chapter discusses the impacts of the gig economy on labor markets in Europe. The gig economy and platform work have become popular topics, while reshaping the experience of work for increasingly larger numbers of people. However, too often debates around the gig economy lack empirical insight. This chapter seeks to introduce readers to these issues, starting with the preconditions that shape the emergence and dynamics of the gig economy. The next part examines the resulting labor market trends, including effects beyond the gig economy; the experience for workers, drawing on current research; and possible future directions, both positive and negative.
[…]
Read More…
Machines, both analog and digital, have been used over time to help workplace designers calculate outputs of work and, indeed, to replace work through automation, now, via the integration of artificial intelligence (AI) tools and applications. What types of “intelligence” are expected from technologies? How does management use personal data acquired by machines and make assumptions of respective types of intelligence? Data has been gathered from job candidates’ and workers’ activities over time, where even physical movements and sentiments, as well as precise social media use, are tracked. When “big data” is big enough, it is used to train algorithms that predict talents and capabilities; monitor performance; set and assess work outputs; link workers to clients; judge states of being and emotions; provide modular training on the factory floor; look for patterns across workforces; and more. How does AI become central to this process of decision-making? In this context, what risks do workers face today in the digitalized, AI-augmented workplace?
[…]
Read More…
This essay forwards the thesis that the social contract in Europe and the United States is under severe stress. The rise of populism is the clearest manifestation of current social and economic fracture across the Atlantic, with its politics amounting to a re-crafting of the preceding order along more nationalistic, interventionist and, in some instances, openly antidemocratic lines. A new social contract is therefore needed that addresses the economic, political, and even physical insecurities brought about by rapid social and technological change. The chapter suggests a full “Decalogue” of measures to be considered by policy-makers. These include measures in the education, taxation, antitrust policy, governance, security, and sustainability spaces. Taken all together, these measures could make up an initial exercise in the crafting of a new and effective social contract for the digital era.
[…]
Read More…
As in previous industrial revolutions, there is nothing inevitable or predetermined about the effects of the digital revolution. Its consequences on productivity, consumption, employment, inequality, and other determinants of social welfare will depend on the design and implementation of public policies for the management of the technological transformation of our societies. Governments, firms, and workers need efficient, coherent, and comprehensive strategies subject to permanent evaluation that make the most of the opportunities offered by new technologies in key areas such as human capital, the labor market, competition, and the regulation of goods and services markets, as well as a redesign of the welfare state and a new social contract to reduce inequality. The success of these policies will determine the extent to which our societies will be able to increase productivity, create employment, and grow in an inclusive manner, thereby increasing social welfare.
[…]
Read More…
In recent years, there has been a proliferation of publications about the future of work. Many of these adopt a somewhat sensationalist tone, predicting a dystopian future without employment; others point to our historical coexistence with technology to attest to our capacity to continue creating new occupations and tasks for humans. This paper goes deeper into this debate by looking at recent studies on the impact of artificial intelligence (AI) and robotics on labor markets. It predicts an acceleration of the ongoing labor market transformation, which in many countries is already putting pressure on society, polarizing the political discourse, and undermining democracy. The first part focuses on the need to develop a strategy that improves the resilience of workers and firms and increases the creation of quality jobs. The second part discusses the nature of this strategy and how to put it into practice.
[…]
Read More…
