I think mass unemployment will be the
defining problem of the 21st century and I think technology will
play a large role. More and more jobs are becoming unnecessary due to
technology coming on heaps and bounds and replacing our feeble minds and bodies.
One example is this website – I designed and made it myself. This was
unthinkable 10 years ago unless I was a computer programmer. Now it just took a
bit of reading, a bit of patience, and a small amount of money for the domain. I didn't pay a human directly for anything.
Surely this new technology is creating jobs
as well, right? Well yes. But it is creating a fraction of the jobs it is
eliminating. There is no point looking to the industrial revolution and blindly
saying that technology creates as many jobs as it takes away. The industrial
revolution led to machines doing the heavy lifting. This current technological
revolution will lead to machines doing the heavy thinking. The will have the
technical knowhow and precise ability to perform tasks that have long been only
capable in highly trained humans. The jobs that will be created will be highly
skilled that let’s face it, not everyone can manage. They take years of
training and many years of experience before you can start earning. Will future jobs be for the highly trained and highly driven? The simple jobs are taken by machines and people in poverty, who can't afford to educate themselves for 5 years because they need to look after their family, will simply be left with nothing they can do.
If we don’t do something drastic to halt
this decline in jobs then what will happen? Business output will stay the same
even though businesses sack their employees, replacing them with tech, while
reducing their cost. The business owners will be making more and more profits.
This means, if the trend continues, that a smaller proportion of the population
will be earning while more are left in unemployment. It is going to be a real
social issue. People unemployed will feel worthless and bored while taking
handouts from the government. The employed people will feel angry at the
unemployed people for taking more of their hard-owned money by increased tax
rates. It’s a wealth gap that will be growing larger over this century and
tension will grow with it.
The
solution?
One way to manage this issue of growing
unemployment is to reduce working hours and ban overtime. This will delay the inevitable
decline in employment brought on by technology and other factors, as well as
spreading the wealth around (shocking idea I know!). Currently we are supposed
to have a maximum working week of 48 hours in the EU. I know people working 90
hour weeks in London. According to figures from Labour Force Survey Summer Quarter 2011, in the UK alone, we are doing over 2 billion UNPAID hours of work
a year. This equates to ONE MILLION full time jobs. I spoke of sharing the
wealth around but what I really mean is a redistribution of work.
The average working week in the UK in 2011
was 42.7 hours, up from 41.4 hours in 2008 (these values do not include unpaid
overtime btw). An increase of 1.3 hours in the last 3 economically uncertain years.
I don’t blame workers for this. They are forced into working harder and doing
unpaid overtime for fear of losing their job to one of the 2.6 million currently
unemployed people. That unemployment number could be reduced by 38% if everyone
refused to do unpaid overtime. The number could be lowered further if the maximum
allowed working week was fewer than 48 hours a week.
This would mean that the current working
population would have more free time and the unemployed would find work. But
surely hiring more people to do the same amount of work would cost more money
and take more work hours? Sure it would. But the reduced amount of people on
government handouts would decrease so tax could be lowered. If the government
gave tax breaks to companies that hired more people for less time, then they
would not lose money. The current employed people wouldn’t lose money either by
working fewer hours because they would also pay less tax. A tax policy that
stated “if a company decreases its working week to fewer than 25 hours for
every employee and hired at least 35% more staff then they will receive a tax
credit. These employees would also receive tax relief for working shorter
hours.” This sort of taxing could be used as a financial incentive to encourage
companies to adopt a shorter working week until it became commonplace. I can’t
see a flaw in my suggestion, can you?
Maybe I am oversimplifying people’s greed
because of my own lack of financial ambition. But then maybe the people that
will choose to work at these companies that encourage shorter working hours
will share the same values as me. The belief that money isn’t everything and
having more time with family and friends is a happier way to spend our lives. I would take a pay cut to work an engineering job for 25 hours a week, where I would still be given a similar amount of work but just had to be more efficient with my work time. This sort of employment could lead to a cultural shift where perhaps money isn’t the
driving force in most people’s lives. I strongly believe that a shorter working
week is what is needed for our society to grow, both economically and socially.
Also what about the people struggling to
make ends meet while they work 40 hours plus a week? I think it is clear that a
fairer waging structure lowering the disparity between top earners and low
earners is needed. 1 in 5 people in the UK earn less than the Living Wage. Are these huge companies that pay their workers this pittance victimised by our government by a higher tax bill? No. They are likely to pay no tax or very little tax, as they have the accountants to worm their way out of it. I'm boycotting Starbucks for one. These huge companies ripping off their employees and our tax system are the real scroungers in this country, not people on welfare. If companies like Starbucks paid more then it wouldn't be financially viable to stay on benefits rather than working.
A reduction in living costs in the UK is also something that needs serious consideration. Unfortunately we are in an arms race of sorts with each other at the moment. People are working longer and harder but are paying more money for houses and rent. If we restricted working hours, we would need the government to force a drop in house prices and rent costs. I believe the second home being used as an investment has driven house and rent prices to unsustainable levels and it needs to be lowered by government laws. Unfortunately the law makers will probably have at least two houses so it isn't in their best interest to consider this. A lot of people would find this difficult, as their pension pot shrinks, but not as difficult as it will be in 30 years when the unemployed revolt because there simply isn’t enough work to go around. The riots in the UK in 2011 will look like a picnic compared with what could be coming.
A reduction in living costs in the UK is also something that needs serious consideration. Unfortunately we are in an arms race of sorts with each other at the moment. People are working longer and harder but are paying more money for houses and rent. If we restricted working hours, we would need the government to force a drop in house prices and rent costs. I believe the second home being used as an investment has driven house and rent prices to unsustainable levels and it needs to be lowered by government laws. Unfortunately the law makers will probably have at least two houses so it isn't in their best interest to consider this. A lot of people would find this difficult, as their pension pot shrinks, but not as difficult as it will be in 30 years when the unemployed revolt because there simply isn’t enough work to go around. The riots in the UK in 2011 will look like a picnic compared with what could be coming.
Another idea to consider is that if technological
increases are really causing unemployment then how about taxing the technology?
For every job lost by a computer, the equivalent amount of government handout
given to that newly unemployed person should be taken from that business by
tax. This would be a novel way of sharing the wealth created by massive
companies that only have a minimal human work force but thousands of machines.
Perhaps it is too soon for such a drastic measure as this would surely slow
innovation, but I don’t see this as an unworkable solution in the long term.
Why do we need a paradigm shift? We need a change to the basic assumptions of work, such as the 40 hour week. A change in people's perception of what a fair minimum wage is. We need to consider that accumulating possessions and buying new things because we can is not going to bring happiness, and shouldn't be the ultimate aim of our society. We have technology so let's use it and improve it to help us cut back on our work. When we went from a 60 hour working week to a 40 hour one, the industry experts thought it would be an end to progression and cause massive problems. It didn't. We adapted, we had more family time, and leisure industries grew. It's time we rejected the 40 hour week.
Why do we need a paradigm shift? We need a change to the basic assumptions of work, such as the 40 hour week. A change in people's perception of what a fair minimum wage is. We need to consider that accumulating possessions and buying new things because we can is not going to bring happiness, and shouldn't be the ultimate aim of our society. We have technology so let's use it and improve it to help us cut back on our work. When we went from a 60 hour working week to a 40 hour one, the industry experts thought it would be an end to progression and cause massive problems. It didn't. We adapted, we had more family time, and leisure industries grew. It's time we rejected the 40 hour week.
I have outlined what I believe may be the
biggest economic issue of this century and how we can go about solving it. I
honestly think I could write another 2000 words on the subject, however a lot
of it has been said before, and until we listen to top economist’s advice (who suggest a 20 hour working week!) I
feel I am wasting my time. This TED video talks about the loss of employment
due to robots, albeit with a more positive spin. Thanks for reading.