The gig economy does erode labor rights but… salaried jobs are very far from disappearing – the share of workers in full-time positions has actually been rising across OECD countries. In addition, the gig economy provides benefits for all – not just for those gigging, who often have a steady job and simply complement their income doing on the side something they are suited for, but also for those enjoying the servicing they get through the online platforms. One major adverse effect, though, has been that platforms have tended to ask giggers to work like employees without offering them the benefits employees would get. This, The Economist argues, may be changing in the near future. As the competition in the gig economy increases, it is likely that workers will be offered growing protection. Workers on Tap, How governments should deal with the rise of the gig economy, The Economist, October 6th 2018.
Southeast Asia tops the chart of regions where robots are replacing human work. South Korea and Singapore had the highest number of industrial robots per 10,000 workers (respectively 710 and 658) in 2017, according to the Information Technology and Innovation Foundation (ITIF). In a 2018 report, ITIF argues that, due to the cost of the initial technological investment, the incentive to replace human work with robots is greater in countries with higher labor costs. Yet the report also finds that the pace of robotization is much slower in the US and Europe (with respectively 49% and 68% fewer industrial robots adopted than could have been expected on the basis of wage levels) than in Asia. If maintained, this gap could make it much harder for US and European industry to compete with Asia in the future. A look into how technology is shaping the workplace of the future, Clocking In, MIT Technology Review, November 28, 2018.
Sweden is not afraid of robots. Unlike what is happening across the West, the generous economic model and safety net of Sweden and its Nordic neighbors are generating a singularly serene atmosphere among laborers whose work may be replaced by robots there. Sweden’s government is bent on protecting workers rather than jobs. It is therefore little surprise that 80% of Swedes express positive views about robots and artificial intelligence (AI), according to a European Commission survey, while a Pew Research Study shows that 72% of Americans are worried about a future of robots and computers substituting for human labor. Part of what makes the Swedish model successful is that government has traditionally invested heavily in training workers for new jobs with every technological upgrade. Yet with estimates of future jobs elimination through robotization and AI ranging from over 5 million jobs across 15 major economies (World Economic Forum) to nearly 50% of all American jobs destroyed over the next two decades (Oxford University), Swedish business leaders themselves acknowledge that their national model, unlike in the past, may not be able to withstand the impact of this new technological revolution. The Robots Are Coming, and Sweden Is Fine, Peter S. Goodman, The New York Times, December 27, 2018.
Universal Basic Income? Not so fast. Finland has been among the first countries to experiment with the concept of Universal Basic Income (UBI), broadly seen by its proponents as a way to ensure economic security in the face of growing job automation. The pilot program, put in place at the beginning of 2017 for a period of two years, involved a random selection of 2,000 unemployed people who were to receive monthly payments of €560 ($634) and continue benefiting even if they found work. Results published at the end of the first year showed no sizeable difference between this group and people on traditional unemployment compensation in terms of returning to the labor market. The Finnish government therefore decided to put a premature end to the experiment, which has left both recipients and advocates disgruntled. Supporters of the UBI do not necessarily view the policy as a way to fight unemployment, and other trials are being carried out elsewhere in the world (Ontario, Netherlands, Kenya), but in Finland the government heeded expression of public discomfort at the thought of handing out free money, with no strings attached. Finland Has Second Thoughts About Giving Free Money to Jobless People, Peter S. Goodman, The New York Times, April 24, 2018, and A Finnish trial is as clear as mud, The Economist, February 16, 2019.