21. Technology is deskilling workers
Employers are using technology in ways that decrease the skill requirements of jobs in order to reduce training times and turnover costs.
Technologies have been designed to simplify aspects of work by breaking a job down into subtasks and intentionally removing the skills required of the workforce.
The ultimate aim is to replace human-performed tasks with machines. This will significantly change the composition and quality of jobs for many workers.
The de-skilling of workers appears to be motivated by a desire to reduce cost. This labor strategy includes expanding the size of the labor market, increasing the use of temporary workers, reducing the workforce in certain occupations, and enhancing worker productivity.
All these advances and technologies will drive outcomes that will present new challenges for every employee and worker.
22. Technology will regulate and control workers
Algorithmic management is introducing new forms of workplace regulation, management, and control for workers. This management practice has become more granular, scalable, and relentless.
Wearable technologies, autonomous mobile robots, and increasingly sophisticated labor management software are allowing closer and detailed tracking of worker movements including walk speed, routes, bottlenecks, and break time.
While these technologies have the potential to improve efficiency and productivity by forcing workers to increase speed and accuracy, it is a form of surveillance, regulation, and control over workers. It reduces worker autonomy and further intensifying the pace of their work.
Without interventions to ensure the transparency and fairness of algorithms used in these technologies, the conditions of work in warehouses may be heading toward more rigid forms of monitoring, management, and control.
23. Salaries will remain stagnant for a long time
As businesses require fewer workers to perform the remaining work after their processes have been automated, this may increase the supply of over-qualified or over-educated job seekers.
This is where the economics of supply and demand will dictate how much is paid to workers, freelancers, and contractors.
When salary negotiations are transacted outside of collective bargaining agreements and minimum pay rates, this will inevitably result in lower or stagnant wage growth for many workers.
With the cost of living and daily expenses rising above inflation rates in most cases, young people will be taking home less pay than ever before.
24. Technology is causing wage stagnation
According to the World Economic Forum, technology is one of the main reasons why incomes have stagnated or even decreased. Therefore, so many workers are disillusioned and fearful that their real incomes and those of their children will continue to stagnate.
In theory, the large-scale deployment of digital, artificial intelligence and automation should be giving us big gains in productivity. People should be more prosperous.
Since the mid-1970s and early 1980s, productivity has continued to increase while wage growth has stagnated — or even reversed. Here’s a chart on the topic from the Economic Policy Institute.
Some may argue that if robots are taking our jobs, the productivity of workers who still have jobs should be going up rapidly. But it’s not. Instead, it’s rising slower than it did in the past. And unfortunately, no one can explain this occurrence.
Technological innovation has eliminated the need for many types of labor-intensive or repetitive jobs. It has inadvertently contributed to job atomisation where jobs are made easier.
That means fewer jobs and more competition for the jobs that remain, which drives down wages.
25. Technology is eliminating full-time jobs
Technological advancement has replaced long-term full-time employment (with benefits and a career path) with occasional short-term contract freelancing work (without benefits or any escalating career structure).
A study by Upwork predicted that freelancers will become the workforce majority in the US within a decade. Nearly 50% of Millennial workers are already freelancing.
The result is that individual jobs, including full-time jobs, have been redefined, partitioned, subdivided, outsourced, and made replaceable with the assistance of technology and automation.
26. Many jobs have an uncertain future
It is without a doubt that most workers are in occupations that have highly uncertain futures. Nesta found that 8% of workers are in occupations that are very likely to grow over the next 10 to 15 years. Moreover, 21% are in occupations that are very likely to shrink. The remaining roughly 70% of workers are in jobs where there is greater uncertainty about the future.
These workers can boost their prospects if they can invest in the right skills. Rather than “doom and gloom,” the findings show how workers can act to prepare for the future. Click here for the interactive map.
According to Nesta, the good news is that creative and artistic occupations are more future-proof to technologies. In the US, 86% of employees in the highly creative category are found to be at low or no risk of automation. In the U.K., the equivalent number is 87%.
Nesta predicted that today’s schoolchildren entering the workplace in the future will be faced with roles that do not exist today. The key is to equip these children with skills that are more resilient in the changing job market. To do so, we need a fundamental shift in the way we teach and educate our children.
27. Just-in-time hiring is becoming a norm
As businesses require flexibility in responding to their ever-changing business and operating environment, they will only hire specific but skilled labor as needed when they require specific work to be done within pre-defined periods and at specified locations.
Employers are adopting just-in-time hiring and contracting of temporary or casual skilled workers for fixed durations rather than keeping just-in-case overheads in the form of on-going full-time employees.
28. Increasing use of short-term skilled workers
In generating the required profits, businesses will have no choice but to reduce their cost through the increasing use of short-term, part-time, or casual skilled workers and the reduction or elimination of costly middle management layers.
This will be done at the expense of on-going, full-time workers.
The majority of Google’s workforce is made up of independent and temporary workers rather than full-time employees. This is just one example of the rapid transformation of the corporate workforce.
With employers adopting just-in-time demand for short-term skilled workers, more and more workers will have no choice but to transition into casuals, freelancers or contractors, whether voluntarily or involuntarily, rather than becoming on-going full-time employees.
While traditional job security is now dead, it has also been transformed through automation and new ways of doing things.
29. Employees are converted into contractors
Over the past two decades, the US labor market has undergone a quiet transformation. Organisations are increasingly converting full-time employees into independent contractors.
Full-time employees are increasingly finding themselves (or being forced into) as independent contractors especially when their employment is transferred to an outsourcing organisation. While they may be doing the same work, the method for computing their wages and income taxes will change with the loss of job security and benefits.
Some organisations like Uber have elected to reclassify (or misclassify, depending on how you see it!) their employees as independent contractors. The impacts of misclassification are the underpayment of wages, the absence of benefits, and increased exposure to a variety of risks. According to a 2009 report issued by the US Government Accountability Office, a significant portion of independent contracting does not pass the smell test. They represent the misclassification of workers.
Misclassification has spread quickly across sectors like hospitality, residential construction, and trucking and logistics.
When it comes to determining employment rights and responsibilities, the most important factor is the definition of employer and employee. An employee works in a business and is part of the business. A contractor is running their business.
There are no similar workplace protections for independent contractors. They are their small business, setting their hours and responsibilities, providing they’re on benefits, and determining their economic outcomes.
Hourly rates paid as wages to a full-time employee and an independent contractor will differ.
These ‘alternative work arrangements’ or the ‘contingent workforce’ are growing according to Politico. They represent roughly 16% of all US workers, while the number of traditional employees declined by 400,000.
Jobs are the basis for a whole suite of social guarantees meant to ensure a stable life for workers. Workplace protections like minimum wage and overtime, as well as key benefits like health insurance and pensions, are built on the basic assumption of full-time employment with an employer.
Unfortunately, for many workers, their new status as an ‘independent contractor’ does not give them any guarantee of earning the minimum wage or health insurance.
30. Employees are disadvantaged by minimum wage
In countries where there are minimum wage levels, it may be great news for some employees as their wages may rise. A minimum wage is a national economic policy responsible for many business decisions.
However, the unintended consequence is that any wage increases can push the employee’s annual income into a higher tax bracket where a higher marginal tax rate is applied to that individual.
It could also lead to job losses according to the Institute for Fiscal Studies. Their analysis showed that those being brought within the minimum wage net are in different sorts of jobs to those who have been on the minimum wage previously. They are more likely to be doing jobs that appear to be more readily doable by machines or computers.
The reality is that if the price of labor is too high, driven by an increase in the minimum wage, then employers will shrink their workforces. Economics will prevail: the higher the wage, the lower the demand for labor; the lower the wage, the higher the demand for labor.
The American Legislative Exchange Council said that raising the minimum wage in the US will hurt lower-income, less-experienced, and less-educated Americans.