Now the robots are after your job, too

Computers could mean a shorter working week for all, but increased unemployment is more likely, writes Jeremy Rifkin
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The Independent Online
The global economy is undergoing a fundamental transformation in the nature of work that will reshape civilisation in the 21st century. Sophisticated computers, telecommunications, robotics and other Information Age technologies are fast replacing human beings in virtually every sector and industry. Nowhere is the trend more evident than in Great Britain. In a recent survey of corporate leaders from six leading industrial nations, British businesses reported more downsizing and corporate restructuring in the past two years than any other country. More than two-thirds of the UK executives said they expected the pace of worker lay-offs to continue or accelerate in the years ahead - the greatest response of any industrial country.

The hard reality that economists and politicians are reluctant to acknowledge is that manufacturing and much of the service sector are undergoing a transformation as profound as the one experienced by the agricultural sector earlier in this century when machines boosted production, displacing millions of farmers. Many jobs are never coming back. Blue-collar workers, secretaries, receptionists, clerical workers, sales clerks, bank tellers, telephone operators, librarians, wholesalers and middle managers are just a few of the many occupations destined for virtual extinction.

Earlier industrial technologies replaced the physical power of human labour, substituting machines for body and brawn. The new, computer-based technologies promise a replacement of the human mind itself, substituting thinking machines for human beings across the entire gamut of economic activity.

The implications are profound and far-reaching. Reflecting on the significance of the transition taking place, the distinguished Nobel laureate economist Wassily Leontief has warned that with the introduction of increasingly sophisticated computers, "the role of human as the most important factor of production is bound to diminish in the same way that the role of horses in agricultural production was first diminished and then eliminated by the introduction of tractors".

The restructuring work is most apparent in the manufacturing sector. By the year 2020, less than 2 per cent of the global workforce will be engaged in factory work. Over the next quarter-century, we will see the total elimination of the blue-collar, assembly-line worker from the production process.

Until recently, economists and politicians assumed that displaced factory workers would find new job opportunities in the service sector. Now, however, the service sector is also beginning to automate, eliminating vast numbers of white-collar workers in the process. In banking, insurance, and the wholesale and retail sectors, companies are deconstructing. They are eliminating layer after layer of management and infrastructure, replacing the traditional corporate pyramid and mass white-collar workforces with small, highly skilled professional work teams, using state-of-the-art software and telecommunication technologies.

Acknowledging this trend, many mainstream economists and politicians have turned to the emerging knowledge sector, pinning their hopes on new job opportunities along the information superhighway and in cyberspace. While the knowledge sector will create some new jobs, these will be too few to absorb the millions of workers displaced by the new technologies. That is because knowledge, by nature, needs an elite workforce and not a mass labour workforce. Engineers, highly skilled technicians, computer programmers, scientists and professionals will never be needed in "mass" numbers to produce goods and services in the Information Age. Indeed, the shift from mass to elite labour forces is what distinguishes work in the Information Age from that of the Industrial Age.

With near-workerless factories and virtual companies already looming on the horizon, every nation will have to grapple with the question of what to do with the millions of people whose labour is needed less, or not at all, in an ever- more automated global economy.

In the past, when new technologies dramatically increased productivity - for example in the Twenties when oil, electricity and the assembly line replaced coal- and steam-powered plants - British workers sought a share of the productivity gains. They organised collectively to demand a shorter working week and better pay and benefits. It is, perhaps, predictable that not a single leading advocate of the Information Age technologies has even hinted at the possibility that we might benefit from the array of new labour-saving technologies with a radically reduced working week. Instead of shortening the working week, employers are shortening the workforce - effectively preventing millions of workers from enjoying any of the benefits of the technology revolution.

Employers argue that shortening the working week and sharing the productivity gains with their workers will be too costly and threaten their ability to compete both domestically and abroad. That need not be so. Companies such as Hewlett Packard in France and BMW in Germany have reduced their working week from 37 to 31 hours while continuing to pay workers at the 37-hour rate. In return, the workers have agreed to work shifts. Management reasoned that if it could keep the new hi-tech plants operating on a 24- hour basis, it could double or triple productivity and thus afford to pay workers more for working less time.

In France, government officials are playing with the idea of offering to pay the payroll taxes for the employer if management voluntarily reduces the working week. While the Government will lose tax revenue from one pocket, economists argue that it will make up the difference on the other: on a reduced working week, more people will be working and paying tax. Fewer people will be on welfare. And the new workers will have purchasing power and be taxpayers, all of which will benefit employers, the French economy and the government.

In the UK, thought might also be given to extending tax credits for any company willing to do three things: voluntarily reduce its working week, implement a profit-sharing plan so that its employees will benefit directly in the productivity gains brought on by the Information Age, and agree to a formula by which compensation to top management and shareholders' dividends are not disproportionate to the benefits distributed to the rest of the company's workforce. Incentives to management voluntarily to adopt a shorter working week might encourage a number of employers to make the transition to a new reduced work schedule for their employees - especially if the incentives give them a marked advantage over their competitors.

The 30-hour work week ought to become a rallying cry for millions of British workers. Shorter working weeks, more leisure and better pay and benefits were the benchmarks for measuring the success of the Industrial Age in the past century. We should demand no less of the Information Age in the coming century.

Even with a much-reduced working week, the UK and every other nation is going to have to address the problem of finding alternative forms of work for the millions of people who are no longer needed to produce the goods and services of an increasingly automated market economy.

Until now, the marketplace and the Government have been looked to, almost exclusively, for solutions to the growing economic crisis facing the country. Today, with the formal economy less able to provide permanent jobs for the millions of Britons in search of employment, and with the Government retreating from its traditional role of employer of last resort, the nation's non-profit sector - the civil society - may be the best hope for absorbing the millions of displaced workers cast off by corporate and government engineering.

The non-profit sector cuts a wide swath through society. Non-profit activities run the gamut from social services to health care, education and research, the arts, religion and advocacy. There are more than 350,000 non-profit organisations in the UK, with a total income in excess of pounds 17bn, or 4 per cent of the gross national product.

Today, non-profit organisations are serving millions of UK citizens in every neighbourhood and community of the country. Their reach and scope often eclipse both the private and public sector, touching and affecting the lives of every citizen, often more profoundly than the forces of the marketplace or the agencies and bureaucracies of government.

The opportunity now exists to create institutions of new jobs in the non-profit sector. But it will cost money to free up the labour and talent of men and women no longer needed in the market and government sectors to create social capital in neighbourhoods and communities. Taxing a percentage of the wealth generated by the new cyberspace economy, and redirecting it into the neighbourhoods and communities of the country and to the creation of jobs and the rebuilding of the social commons, provides a new agenda and a powerful new vision of what society could become in the 21st century.

Re-envisioning work, however, requires that we rethink our notion of the body politic. Politicians traditionally divide the UK into a polar spectrum running from the marketplace on one side to the Government on the other. But it is more accurate to think of society as a three-legged stool made up of the market sector, government sector and civil sector. Of the three legs, the oldest and most important but least acknowledged is the civil sector. In the old scheme of things, finding the proper balance between the market and government dominated political discussion. In the new scheme, finding a balance between the market, government and civil sector becomes paramount.

The key to a genuine attempt to recast the political landscape will depend on the political will to increase the clout and elevate the profile of the civil society, making it an equal layer with both the marketplace and government. But since the non-profit sector relies on both the market and government for its survival and wellbeing, its future will depend, in large part, on the creation of a new political force that can make demands on the market and government sectors to pump some of the vast financial gains of the new Information Age economy into the restoration of the civil life of the country.

The potential for a new third force in UK political life exists but has not yet been galvanised into a mainstream social movement. It consists of the 39 per cent of British citizens who give of their time each week serving in the many non-profit organisations that make up the sprawling civil society. These Britons already understand the importance of creating social capital in their own neighbourhoods and communities.

Until now, however, the millions of people who either volunteer or work in this sector have not seen themselves as part of a potentially powerful constituency - one that, if politicised, could help to reshape the national agenda. The one thing they share is a belief in the importance of service to the community and the creation of social capital. If that powerful shared value can be transformed into a sense of common purpose and identity, we could redraw the political map.

The writer is author of 'The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era' (distributed by Deep Books). The book is being released in Britain this month. Mr Rifkin is also president of the Foundation of Economic Trends in Washington.