Volume 52, Issue 2: Summer 2018

Whither Work? The Second Industrial Revolution

Photo by Centro Nacional de Educação a Distância

The night OF February 16, 2011, millions of North Americans gathered around their television sets to watch the final match of a three-day Jeopardy challenge. It was a contest that pitted IBM’s supercomputer Watson against Ken Jennings and Brad Rutter, the best players in the game’s long history. Watson, the computer, won by a landslide. In hindsight, it was a watershed moment. It was the first time a computer had been able to interact with real language and answer complex questions on virtually any topic with the speed of light. Watson’s victory spurred an intense competition in the field of artificial intelligence and spearheaded what’s come to be known as the second industrial revolution. To date, the most astounding achievement occurred in 2016 when Google’s AlphaGo system beat the world’s grand champion at the ancient game of GO — a game so complex that there are more possible moves than there are atoms in the universe. Even the best players can’t tell you how they do it. Yet the AlphaGo system was able to teach itself how to play and beat the best players in the world.

There have also been quantum leaps in the development of robotics. Until recently, robots could only perform crude, repetitive tasks. Today, robots can see, hear and speak and they’re able to perform tasks that require fine motor skills such as picking up small objects and even inserting an IV line. The Boston-based firm Rethink Robotics has designed a robot called Baxter that can be trained simply by moving its arms through the required motions. According to Martin Ford, a Silicon Valley entrepreneur and author of Rise of the Robots, robots “are invading the final frontier of machine automation, where they will compete for the few relatively routine, manual jobs that are still available to human workers.”

There’s little disagreement about whether Artificial Intelligence, machine learning, and advanced robotics, along with 3D printing and the internet of things, will have a profound impact on the labour market, just as steam engines did in the first industrial revolution. Estimates vary, but an influential study out of Oxford University in 2013 estimated that 47 per cent of jobs in the U.S. could be eliminated using existing technologies. According to Ford, the jobs most at risk are those that are routine, repetitive and predictable, regardless of whether they involve physical or mental work. Everything from factory jobs to fast food and retail jobs to legal and medical jobs are in the cross-hairs. Even sex workers and psychotherapists can be replaced. Where there is disagreement is whether new and better jobs will come along to replace the old ones. In earlier periods of technological change, they have. Factory jobs replaced agricultural jobs, service jobs replaced factory jobs and computer-related jobs replaced many service jobs. It’s a process that economist Joseph Schumpeter called “creative destruction,” and it has led to steadily higher standards of living over the past couple of centuries. Optimists argue that the present is no different. They predict that new and better jobs will come along that we can’t even imagine today and that they’ll contribute to a better quality of life. Pessimists argue that while that may have been true in the past, this time it’s different.

This time it’s different

There are a lot of reasons to be pessimistic. For one thing, even if new jobs do replace the old ones, it won’t happen immediately. The first industrial revolution wasn’t a pretty picture. It led to mass poverty and misery which lasted for decades and improvements came only after years of political struggle. One could argue that the current revolution will be even more disruptive because of its speed and its ability to impact virtually every sector of the economy. The sheer pace of change is daunting. According to what’s been called Moore’s Law, computer power is doubling roughly every 18 months. That means what was impossible just 10 years ago is possible to day — think self-driving cars and virtual assistants — and what’s impossible and even unimaginable today will become a reality tomorrow. In the process, even today’s new jobs will become obsolete by tomorrow.

And while the industrial revolution replaced muscle power with machine power, machine learning is encroaching on the one thing that gives humans an edge — our brain power — our ability to think, solve problems and learn. Thinking computers will likely outperform workers across a broad range of tasks and make it more difficult for we humans to adapt. As Martin Ford says, “You can compare it to horses. Horses got displaced because they couldn’t adapt in the way that people do, but now you’ve got these thinking, learning computers that are going to begin competing with people in that primary capability that so far has allowed us to stay ahead of all this. That’s why I think that this could be the biggest disruption we’ve seen yet in terms of what it all means for jobs, the economy and society.”

Of course there will be new sectors of the economy opening up and, undoubtedly, new jobs will be created, but the industries of the future are likely to be built on a foundation of new technology and won’t be anywhere near as labour intensive as their older counterparts. Kodak offers a good example. In its heyday, the company employed over 80,000 wellpaid employees and supported the city of Rochester, New York. The company filed for bankruptcy in 2012 when it finally succumbed to competition from the digital world. When Facebook bought Instagram that same year for $1 billion, the company had a mere 18 employees. General Motors is another example. At its labour peak in 1979, GM employed 840,000 workers in the U.S. In 2017, Alphabet, Google’s parent company, employed about 88,000 despite being the second richest corporation in America (according to market capitalization). As Ford suggests, the corporations of the future are more likely to resemble Google than General Motors.

What’s more, Ford predicts that the jobs of the future are likely to be highly polarized, with a small number of well-paying, elite jobs at the top, not much in the middle, and a slew of poorly paid, insecure jobs at the bottom. In other words there aren’t likely to be nearly enough good, well-paying jobs to replace all the middle-class jobs being lost.

The social context

What makes the coming technological revolution especially worrying is the context into which the new technologies will be landing. In earlier periods there were a series of mitigating factors that softened the impact of technological change. Throughout the 19th and early 20th centuries, for example, when machines were destroying jobs, there was a robust movement of workers and even some employers to trim working hours. Hours were gradually reduced from as many as 16 hours a day, six days a week to eight hours a day, five days a week. This meant the available work could be spread out among more workers. Unfortunately, the movement for shorter hours in North America came to an abrupt halt in 1940 when the U.S. Congress passed legislation limiting the workweek to 40 hours. Since then there’s been no progress. Today, a weakened labour movement has abandoned all calls for a shorter work week, at least in North America, and many employers are demanding compulsory overtime (plenty of it unpaid).

The decades after the Second World War was another unique period. It was a time of rapid technological change, but also rapid economic growth, the likes of which we in the Global North are unlikely to see again. During what’s been called the Golden Age of Capitalism, governments were committed to policies promoting full employment. Unions were strong, jobs for most white males were secure with good pensions at the end, and the benefits of economic growth were shared widely. It was also a time when the majority of women were working at home and not competing for jobs on the labour market. Finally, it was a time when we were oblivious to the pressures economic growth put on a fragile environment.

The context we’re living in today is drastically different. Economic growth has become much more sluggish, women have entered the labour force in large numbers and the political zeitgeist has undergone a 180-degree turn. Since the neoliberal revolution of the 1980s, governments in most Englishspeaking countries have abandoned any commitment to full employment. Instead, successive governments have rewritten the rules governing the market in ways that have enhanced corporate profits, undermined the power of labour and led to growing inequality. Everything from tax law to labour law to laws governing property rights have been rewritten to benefit corporations and the wealthy. As a result, the gains of economic growth have gone increasingly to the top. At the same time corporations have changed their business models. While they used to be content with slow, steady growth, the shareholder-value movement of the 1980s put pressure on them to grow rapidly and to prioritize short-term returns to shareholders above all else. To meet shareholder expectations, corporations developed lean and mean new strategies like outsourcing, temporary contracts and just-in-time hiring in order to boost their short-term profits. Combine all that with globalization and automation and there’s been a perfect storm battering the labour market. Unions have taken a beating, job security is increasingly a thing of the past, and a whole new category of precarious workers has come into being.

Current unemployment statistics paint a rosy picture. Officially, our unemployment rates are the lowest they’ve been in decades. But the numbers mask the true situation. A large number of the unemployed have dropped out of the labour force altogether, and millions of people who want full-time work have had to settle for less. Since the mid 1990s, contract, part-time and temporary work have accounted for 60 per cent of job growth in all OECD countries. In Canada, 90 per cent of the new jobs in 2016 were part time. Young workers entering the labour market for the first time are confronted with the new “gig economy.” They’re having to piece together a series of short-term stints that normally offer no benefits and no security. Liberal Finance Minister Bill Morneau summed up the government’s defeatist attitude in the fall of 2016 when he claimed that “job churn” was the new reality and that young people had better get used to it.

Given this context, it’s hard to imagine a scenario where new and better jobs will come along to replace the old ones. The irony here is that there is still so much work that needs to be done. Our hospitals, schools and daycare centres are woefully understaffed, our infrastructure is in need of massive improvements, and there is an enormous amount of work required if we’re to clean up the environment and combat climate change. Addressing these needs could provide decent jobs for huge numbers of flesh and blood human beings. Unfortunately, these aren’t the kind of jobs the market is providing, and our governments seem reluctant to fill the void. Martin Ford paints a bleak picture of the future if we continue on our current path. He predicts increasing unemployment, wage stagnation, rising inequality, and escalating social and political unrest. He goes so far as to say we’re in danger of entering a period of techno-feudalism — where the elite few break away and create their own society and where everyone else is left behind.

Robot on the job at Harrison Manufacturing. Jeff Green, Rethink Robotics; Wikimedia Commons

The evidence so far

The media is full of dystopian predictions about the impact of new technologies. But predicting the future is always iffy. We really can’t know exactly what lies ahead. A safer bet is to look at recent trends and see what kinds of jobs the new technologies have already created. One thing is clear; they’ve created a lot more extremely lucrative jobs, especially for workers under 40, than there were just a decade ago. The core work forces at companies like Google, Amazon, Facebook, Uber and others tend to be young and are very well rewarded indeed, but only a tiny proportion of the workforce is lucky enough to make it to the top. Nevertheless, the new technologies have also created a slew of new jobs for people lower down on the economic ladder — jobs that we couldn’t have imagined 20 years ago.

Ursula Huws is a professor of Labour and Globalization at the University of Hertfordshire in London and author of Labour in the Global Digital Economy. Unlike Martin Ford, she has eminent faith in capitalism’s ability to reinvent itself and continuously create new jobs. The problem as she sees it is that most of the new tech-related jobs are dreadful. Amazon, for example, has created thousands of new jobs in its warehouses, but workers are basically controlled by an algorithm which dictates exactly where they should go and how long it should take them. In fact, one of the main uses of new technologies has been to expand on management’s ability to monitor workers and Taylorize the work process.

As Huws says, “I sometimes think that if visitors from another planet came and looked at the world they wouldn’t see the machines as the servants of the human beings, they’d see the human beings as the servants of the machines.”

Huws also cites the hundreds of thousands of hidden jobs created just to monitor the internet. Everything from searching for cyber threats and criminal activity to basic housekeeping of web sites — labelling, checking links, making sure things are on the right pages, etc. And in what can only be described as digital sweatshops, Huws points to the legions of workers, most often in poor countries, who spend entire days staring at images on a screen and pulling offensive images off the web. She describes this kind of work as tedious beyond belief. When asked why technology hasn’t relieved us of such tedious work, as we hoped it would, she responded, “Technology isn’t used just because it’s there. It’s used to serve a particular purpose, and if the purpose of introducing the new technology is to reduce the cost of labour, to standardize it, to make it as cheap as possible to get that work done in another part of the world, then the chances of that leading to good and nice jobs are almost zero.”

Platform capitalism

Platform Capitalism. Nick Srnicek. Polity Press (2017)

As well as creating new kinds of jobs, the new technologies are changing the way the labour market functions. The biggest change has been the rise of online platforms which connect workers with businesses or individuals who want to employ them. Labour platforms come in two varieties. The first covers actual physical work that’s done in a specific location. Uber is the most well-known, but there are dozens of others. Platforms like TaskRabbit, Handy and Jiffy connect workers with customers for a variety of home services like gardening, house painting, cleaning or assembling Ikea furniture. Other platforms provide services like dog-walking, baby-sitting or elder care. You can even find people who will stand in for you in long lineups. Much of this work used to be part of the informal economy where people would hire local handy-persons, gardeners, caregivers or whatever on an individual basis — often under the radar. But that work is increasingly mediated by online platforms where workers are managed as if they were employees but given none of the benefits of traditional employees. The platform owners generally take from 20 per cent to 30 per cent of the fee and the work is often monitored and controlled. Workers can be dropped from the platforms with the flimsiest of excuses and because they they’re considered independent contractors rather than employees, when they’re out of work, they’re not entitled to unemployment benefits.

The second kind of online labour platform covers any kind of work that can be done on a computer and that means it can be done from anywhere in the world. Upwork and Freelancer, are examples of global platforms for connecting businesses with independent professionals. The work could be anything from sophisticated graphic design to editing, writing, web design or accounting. At the other end of the spectrum, Amazon Mechanical Turk and Crowdflower are online marketplaces for simple computer tasks called micro-tasks which often require just a click of the mouse and pay pennies a click. According to a Government of Canada report, there were already over 145 platforms for virtual work in 2013. The report estimates that by 2030 virtual work will likely be a part of most Canadians’ work experience (Canada and the Changing Nature of Work, Govenment of Canada Publications, May 2016). Online computer-based platforms are a modern version of crowd-sourcing. Workers generally bid for shortterm contracts and, given that they’re competing globally, the result tends to be a race to the bottom when it comes to wages. What’s worse, employers are under no obligation to pay for the work if they’re not satisfied with the results, and there have been numerous examples of wage theft.

These kinds of platforms are proving to be a real boon for the companies that use them. They can any avoid any long-term commitment to their workers and they can side-step local labour laws. Lukas Biewald, the former CEO of Crowdflower, a platform for online work based in San Francisco, had this to say: “Before the internet it would be really difficult to find someone, sit them down for 10 minutes, get them to work for you and then fire them after 10 minutes, but with technology, you can actually find them, pay them that tiny amount and then get rid of them as quickly as possible.” (“How Crowdworkers Became the Ghosts in the Digital Machine,” by Moshe Z. Marvit, The Nation, February 5, 2014.)

Not up to the task

We seem to be going back to the ruthless, unregulated days of early capitalism before we figured out how to manage the new world of work. Our current labour laws and employment standards, as well as our social programs, were created in a different era, when a full-time job with benefits was the rule. They’re a complete mismatch for our current economy. So are our labour unions. In the past, unions were the main vehicle for improving the lives of working people. But the old unions have lost their power and represent a dwindling portion of the work force. If workers are to be protected in this new world of work, labour laws and employment standards will have to be rewritten, our social safety net will need strengthening and governments will have to take a more active role in directing the economy. As well, unions will have to reinvent themselves and find new ways of representing working people.

Governments are beginning to take baby steps. Ontario and Alberta have raised the minimum wage and Ontario’s Bill 148 provides some protections for precarious workers. But it’s not nearly enough. Our current economy is broken. The old mechanisms for redistributing wealth no longer work and the result has been massive and growing inequality. Most of us complain of being either overworked and exhausted or underworked and hungry. Many of us now have to put together two or three jobs just to get by. We produce too much of what we don’t need and not enough of what we need. Our environment is in crisis. Rather than relying on patchwork solutions, which don’t challenge the basic structure of our economy, the new technologies give us the opportunity to dream bigger. We need to think about the kind of world we want to live in and explore how the new technologies could be deployed in the service of that better world.

The world we want

Ever since the industrial revolution, writers and social critics have envisioned a world where technology would release us from wage labour and free us for better things. In 1930, at the height of the Great Depression, the economist John Maynard Keynes wrote his famous essay “Economic Possibilities for Our Grandchildren” in which he predicted that, by 2030, technology would have progressed so far that people would only have to work 15 hours a week in order to maintain their standard of living. In his 1964 book, One Dimensional Man, philosopher and political theorist Herbert Marcuse envisioned a world where technology would liberate us from drudgery and allow us to fulfill our true potential. More recently, a number of writers have challenged the current economic order and imagined a future with less work. Inventing the Future: Postcapitalism and a World Without Work, by Nick Srnicek and Alex Williams, The Future We Want: Radical Ideas for the New Century, by Sarah Leonard and Bhaskar Sunkara, Four Futures: Life After Capitalism, by Peter Frase, Utopia For Realists, by Rutger Bregman, and True Wealth, by Juliet Schor, all point to a world where wage labour is drastically reduced and the necessary work is shared more equally among us.

How do we get there?

The new technologies have the potential to significantly reduce the amount of paid work required. Whether that potential is realized, and whether it leads to a better world or just increases poverty and inequality, depends on how we manage it. To obtain a positive outcome, a lot of changes will have to occur. First, after 78 years of inaction, we’ll need new legislation to shorten the work week, and to prohibit companies from requiring compulsory overtime. Unions could be a major force spearheading a push for shorter hours. A three-day weekend coupled with a 32-hour work week would be a good place to start, with a gradual reduction from there.

Economist Juliet Schor has called shorter working hours a triple dividend. They would spread the available work more evenly, would reduce carbon emissions and would give people more free time. She sees the reduction in wage labour as an opportunity for people to disengage from the work-and-spend cycle and gain more control over their lives.

Of course, if shorter hours are to be a positive change rather than a penalty, we’ll need new mechanisms to redistribute income. There are a variety of ways this could be done. The most talked about these days is a guaranteed annual income which would be paid to everyone, regardless of their economic status, and which would be sufficient to lift everyone out of poverty. A common critique of guaranteed annual income is that it rewards laziness, but pilot projects around the world have demonstrated that a guaranteed annual income actually encourages people to make productive use of their time. It gives them the freedom to engage in activities which are of immense value but which aren’t rewarded in our current economy. Activities like caring for their own children and their elders, growing and cooking their own food, doing their own sewing, carpentry and other forms of self-provision. It also provides people with the security they need in order to take risks like starting a new business, going back to school or finding a better job.

Another way to reduce people’s dependence on paid labour would be to expand the commons and provide more free or highly subsidized public services like child-care, post-secondary education, dental care, pharmacare, transportation and public housing.

The standard critique of both these mechanisms is that we simply can’t afford them. But we can. We’re an immensely rich society which continues to generate enormous wealth for the 1% at the top. Finding ways to redistribute that wealth for the benefit of society as a whole is just a matter of political will.

There’s no going back to the so-called golden age of capitalism. Nor should we want to. Our technologies give us the potential to create a far better future. One that’s environmentally sustainable and one in which we have the time and financial security to do what really matters to us. Getting there will require a revitalized commitment to the common good, but there’s no specific blueprint for the ideal society. Each country, city and community will have to work out its own vision of the future it wants through democratic processes. It won’t necessarily be easy, and it may involve years of political struggle, but ultimately, isn’t that the kind of world we want for our children and grandchildren?

The quotes by Martin Ford and Ursula Huws are taken from interviews I did for a documentary radio series on the future of work which appeared on CBC Radio’s Ideas in September 2017.

Jill Eisen is a freelance journalist and documentary radio producer. This article is based on a threepart series she did for Ideas on CBC Radio.