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Meet the New Boss, Same as the Old Boss

LabourEconomic Crisis

Canadian Dimension always strives to expose the underlying realities and power structures of society: digging beneath superficial appearances and passing fads, to highlight the lasting, exploitative relationships and practices that really make our system tick.

Global capitalism continues to evolve in the face of new challenges, threats, and crises: the most ominous being its inability to adequately respond to the escalating climate emergency. Yet its core structures and practices demonstrate a surprising continuity and staying power. Dimension has taught us to draw on our historical and structural perspective to understand what is actually changing—and what isn’t. As Dimension is relaunched, there’s no more obvious current topic to apply that sober, critical lens than the future of work.

After all, there’s been a huge outpouring of concern in recent years over the changing nature of work. Academics, consultants, policy-makers, and politicians have all seized on the idea that work is changing fundamentally before our eyes. Expectations, regulations, and skills must be adjusted and disrupted, we are told–lest workers and entire economies be left behind by this accelerating and overpowering change.

This “future of work” discourse typically emphasizes several key transformations remaking work:

  • The acceleration and spread of automation, now applied to non-routine tasks, and mental (as well as physical) work.
  • The substitution of machines for humans in a broader array of occupations and workplaces.
  • Artificial intelligence systems which allow machines and systems to adapt, learn, and exercise judgment.
  • The changing composition of output, with a shrinking share of material goods and more emphasis on services and “information.”
  • The application of digital technologies (like on-demand platforms) to organize, supervise and compensate work.
  • The erosion of the “standard” employment relationship (full-time, permanent, waged jobs with benefits), replaced by more precarious, contingent forms of work.

I direct a think-tank, The Centre for Future Work, which is fully engaged in these debates (we also investigate more “mundane” labour market problems like wage stagnation, the erosion of collective bargaining, and underemployment).

As I research these topics, I have started to conclude there is more constancy than change in the world of work. In particular, the central power relationships that shape employment in a capitalist economy are not fundamentally changing: to the contrary, they are being reinforced by the factors listed above. As a result, I suspect the future of work will look a lot like its past, at least as it has existed over the past two centuries. Where work is concerned, it is truly a case of “back to the future.”

This article lists seven ways in which the evolution of work is reflecting a fundamental continuity with long-standing labour practices and relationships that are as old as capitalism. To improve the quality and compensation of work, we need to understand—and where necessary confront—those core features.

1. Human labour, broadly defined, is the only force that adds value to resources we harvest from nature.

All production involves transforming materials we extract from the natural environment to produce goods and services that are useful to humans, and the application of productive human labour is the only force that can execute that transformation.

Human labour is required to process and transform natural materials into useable goods (food, structures, consumer goods, machines, and more). This same chain of production applies to services, too: material inputs are essential to all service production (not even a massage therapist works solely with their bare hands). Hence all production (goods and services) involves the application of labour to material inputs which, in turn, were also produced with a combination of labour and material inputs. Ultimately, labour and nature are the only “primary” inputs to all production.

Understanding the nature of production rebuffs the claims that new technology will generally replace workers and make them redundant. No machine ever fell fully-formed from the sky. Machines are produced by workers, with necessary inputs of other material products (also produced by workers, and ultimately harvested from nature). Because we use increasingly capable and sophisticated machines in our work, we can produce a wider range of goods and services, and both the quantity and quality of our output (per hour of labour) grows. But working with machines is just a “round-about” or indirect version of the same chain of production. We learned many millennia ago that it is more efficient to first produce a machine or tool, and then use that machine or tool to produce what we actually want.

Workers cannot be replaced by machines in any general sense. Workers are not redundant; they are still the engine of value-added creation in the economy. And that ultimately gives workers great power.

2. The most important form of work in a capitalist economy is paid employment, or “wage labour.”

Employment is work directed by an employer: someone who oversees production, owns the product, pays the worker some compensation, and engages and discharges the worker as needed. Wage labour is not the only kind of work in modern capitalism. There is much unpaid work (performed disproportionately by women) in our homes and communities. And some work in the formal, monetary economy is not employment: such as the work of business owners and top managers, and the labour of genuinely self-employed small business owners and farmers.

But wage labour accounts for the vast majority of total paid work. Meanwhile, most unpaid labour consists of reproductive work performed to allow wage labourers to do their jobs: feeding, clothing, caring, and resting so they can go back to work the next day (as well as raising the next generation of workers). In total, therefore, the vast majority of work performed in our society is either paid employment, or unpaid work that supports paid employment.

3. Most people in developed capitalist economies support themselves primarily through employment.

At any given point in time in Canada, about 60 percent of people of working age (defined by Statistics Canada as anyone over 15 years of age) are “employed,” mostly in various forms of wage labour. Indeed, around 15 percent of those employed people report being self-employed. But self-employment has declined, both recently and over history. What’s more, official data overstates true self-employment, by including many people, from dependent contractors to gig workers, who depend on larger firms for their livelihoods.

Meanwhile, of adults who are not employed, most have retired from employment, are unemployed (seeking work but can’t find it), are unable to work (due to disabilities or illness), or have voluntarily withdrawn from the workforce (for example, to attend higher education or raise children). Some are unable to work at all, and live off social supports or help from their families. Measured over their lifecycle, therefore, most families receive most of their income from paid employment. I estimate this applies to around 85 percent of Canadians.

Those who do not rely on paid employment include:

  • The roughly 10 percent of Canadians who are genuinely self-employed, in small businesses or farms in which they (and often their families) perform most of the work.
  • Those Canadians who cannot work at all, and must rely on social programs, charity, or their families.
  • Approximately 2 percent of Canadians who own enough financial wealth that they do not have to work to support themselves. At a 5 percent rate of return, an individual with $2 million in financial wealth, not counting their own residence, could enjoy an annual income of $100,000 per year without working. A very small segment of the Canadian population possess that much or more financial wealth, yet that small group owns a majority of all financial and business wealth in the country.

For everyone else, access to paid employment, and the terms and conditions of those jobs, will be the most important determinant of their material standard of living, mediated and moderated by the “social wage” delivered through our network of public services and income supports. Business leaders and conservatives invest great energy trying to “divide and conquer” that 85 percent majority: highlighting and capitalizing on differences in education level, occupation, sector, race and gender, and other characteristics.

Differences and inequalities among workers are important, and cannot be glossed over. But that 85 percent of Canadians have one significant thing in common: they all work for someone else, and depend on income from their jobs to support themselves.

The moment the 85 percent start thinking of themselves as an overwhelming majority—rather than as a constellation of varied sectional interests—is the moment society will start to fundamentally change.

4. The new boss is just like the old boss.

Most Canadians support themselves from paid employment over their lifetimes. And 80 percent of employees work for private for-profit businesses (the other 20 percent work for public and non-profit agencies, which all too often merely ape the labour extraction strategies of private bosses).

As noted above, most business wealth is owned and controlled by the richest 2 percent of society. This mean that most Canadians support themselves by ultimately working for a very small group of elites.

This runs counter to a common myth that new technology is facilitating entrepreneurship, decentralization, and self-reliance. This narrative is convenient for neoliberal policymakers who want to roll back social supports, and then blame the victims for their supposed lack of initiative.

In reality, however, business profit and investment have become more concentrated, not less. True self-employment is continuing its long historical decline. And most of the new forms of pseudo self-employment (from Uber drivers to office cleaners who are forced to get a business number because they are supposedly “independent”) reflect a combination of sham outsourcing and tax evasion.

Some business practices are genuinely new, of course. Of particular note is the surprising ability of capitalists to suck billions in surplus out of companies (like Uber) that have never made a dollar of traditional profit. This is done by financializing ownership structures and exploiting speculative investment markets.

At the end of the day, that real wealth is still produced by actual work. And that work is still being directed, and its product owned, by a very small segment of society that lives off the effort of others. None of this is new.

The gig economy has produced what some critics have called a permanent underclass struggling to join the mainstream labour force. Photo from the website of the Association for Progressive Communications.

5. Employers are pushed to extract as much labour effort, for as little compensation, as possible. They will use all tools available to them – including technology – to do so.

This “labour extraction” problem is a direct consequence of organizing the economy around wage labour. Employers need workers to produce: without labour, production stops. But workers don’t have a meaningful direct stake in the businesses that employ them (notwithstanding all the gimmicks, like shared ownership plans, used by employers to convince workers that they are all on the same side). This inherent alienation of workers from the purpose of their work requires employers to motivate their employees with a combination of positive inducements (carrots) and negative sanctions (sticks). If they aren’t successful in extracting maximum effort for minimum cost, employers will be driven out of business by other others who are more aggressive and successful in getting the greatest bang for their labour cost buck.

This fundamental consequence of wage labour shapes all manner of workplace issues including technological change, labour law, and social programs. Employers seek an economic, legal, and social environment that compels workers to work harder, more obediently, and for less pay. That is why employers often despise income supports for working-age people: they undermine the “work-or-starve” logic that is the strongest compulsion for obedient productivity. It is also why bosses endlessly seek access to cheaper, more desperate pools of labour. And it’s why, for centuries, they have sought to shift the costs and risks of market fluctuations onto workers through various forms of contingent employment including day-labourand modern gig work platforms like Skip the Dishes and Uber.

That same central imperative shapes how employers approach new technology. It’s not just that technology can reduce direct unit labour costs in production, by allowing firms to produce more output with fewer direct workers (though remember: indirect labour is still required to invent, manufacture, operate and maintain all those new machines). Employers are even more excited about how digital technology can be wielded to manage labour extraction: intensifying work, intensifying supervision, reducing downtime, and shifting still more risk and cost to workers. The one-sided use of digital technology for surveillance and supervision in workplaces is one of the most offensive, but underexplored, aspects of the future of work.

6. Skills can enhance workers’ bargaining power in certain times and places, but cannot on their own guarantee better income or security.

The “future of work” discourse usually focuses quickly on the priority of improving the skills of Canadian workers. This is believed to facilitate better adjustment by workers to changing technology and occupations, and lift aggregate productivity and output, allegedly held back by inadequate or mismatched skills. Focusing on skills also contributes to a convenient “blame the victim” ideology: workers who are left behind by technological change are ultimately the authors of their own misfortune, because they failed to invest in the right “human capital.”

Of course, enhancing the quality and accessibility of lifelong training and education is always a laudable goal. And there are many good jobs created by a high-quality, well-funded education system (including early child, primary and secondary schools, post-secondary, and vocational segments). But an uncritical acceptance of this skills agenda leads to a misdiagnosis of existing labour market problems along with unhelpful policy responses.

Canadian workers—particularly young workers—have more skills than any generation before them. They are perhaps the best-educated workforce in the world: the OECD reports that 58 percent of Canadian workers in 2018 had some form of post-secondary training, more than any other OECD country. Millions of Canadians invested heavily in skills and training that they do not use fully or even partly in their jobs. As it turns out, underemployment of well-trained workers is a much bigger problem than self-serving employer complaints about a supposed “skills shortage.”

Without strong job-creation and low unemployment, and structural policies like a strong minimum wage to lift earnings and job quality, acquiring more skills cannot be a general solution to the insecurity and stagnant incomes experienced by Canadian workers. At best it becomes a tool for queue-jumping and distributing unemployment

7. Higher productivity will only benefit workers if they fight for and win better compensation and shorter working hours.

There is no statistical evidence that productivity growth in Canada or other industrial economies has accelerated. This would necessarily be true if labour-saving tehnologies (like robots, artificial intelligence, automation) were truly replacing workers with machines in a major way. To the contrary, average labour productivity growth in Canada has been sluggish for two decades, at under 1 percent per year; this is less than half the pace achieved during the initial postwar decades. At the same time, capital investment by private businesses has declined in Canada by one-third as a share of GDP since 2000 (when corporate tax rates began to fall steeply, purportedly to stimulate more investment).

So is technology really accelerating? Or is it in fact slowing down? Economic data certainly suggests that in real-world workplaces (rather than controlled laboratories), technological change is unfolding much slower in practice than predicted.

What would happen if productivity did indeed accelerate due to automation and other new technologies? Technology has neither inherently positive nor negative impacts on workers: of its own accord it will cause neither nirvana (high incomes and abundant leisure time) nor dystopia (mass unemployment and economic polarization).

Technology is not calling the shots; human beings are. And right now, decisions about what technologies are developed, how they are implemented, and how their costs and benefits are shared are being made unilaterally by the businesses and investors who finance innovation, capital investment, and business formation. Unchallenged, they will shape the course of technological change in their own interests, to maximize their profits and their control in workplaces.

Mathematically, the productive potential of big increases in productivity could be “absorbed” through any combination of changing incomes and changing hours of work. At one extreme, we could keep working as much as we do now, and produce a lot more stuff. At the other, we could produce as much as we do now, but with much less work. And both the income effects and the working-hour effects of new technology could be distributed equally or unequally. Real wages could stay the same, while capital captures all the income gains (through higher profits and executive compensation). Or real wages could grow, distributing a proportional share of productivity gains to workers in the form of higher incomes. Similarly, reduced work time could be achieved by cutting everyone’s work hours. Or we could concentrate non-work time on the shoulders of a group of unemployed. Out of these infinite possibilities, the specific outcome we receive depends entirely on the balance of economic, political and social power relationships: that is, on whose interests predominate. There is nothing pre-ordained or technologically-determined about it.

In a different economic and political context, technological change could be a source of liberation and sustainability. Our growing knowledge and capacities could be managed to maximize human and environmental progress. In such a world, workers could “have it all”: a mixture of higher real incomes (with an emphasis on human and caring services, and other sustainable forms of consumption); more lifetime leisure (via shorter work days, shorter work weeks, more vacation, extended leaves for education, family, or travel, and earlier retirement); and a more habitable and pleasant environment in which to enjoy those things. That so many people fear technology, and view it as a threat, tells us more about society than it does about technology.

If the world of work is going to change for the better, it will only be because large numbers of workers—who will still constitute the overwhelming majority of society—organize and demand that it change. But that, too, is nothing new: that’s exactly how change has always been won.

Jim Stanford is Economist and Director of the Centre for Future Work. He divides his time between Vancouver and Sydney, Australia.

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