Canaries in the coal mine.
What are they telling us about employment?
The new term coined for the unprecedented wave of job destruction and job recreation, is called the “great disruption”. Over eighty percent of the Australian population have not yet been affected, so their level of consciousness about the implications of a significant employment disruption, is only a vague possibility.
However, many people who are creating the technologies are acutely aware of how potential job losses may affect their customers. One example is Silicon Valley. They are doing their own research project called the “YCombinator”. This is investigating how to provide people with an income if they are unemployed.
“Sam Altman, the head of YCombinator, is so convinced that we’re going to need to figure out new ways of providing people with a means to live that he’s giving ~$20k each to 1,000 people in Oakland for a year just to see what they do with their new jobless income”. data
The generations in Australia, that have been most affected, are the two generations at either end of the bell-shaped curve. They are the people over 50/55 and 24 or under. They have been the canaries in the coal mines. The warning to other generations that employment risks, particularly that of underemployment, may be looming.
In Australia youth unemployment is at 13.3 percent
and underemployment is at 20%. (ABS)
Contracting temporary workers for short term engagements is on the rise. The funky term is the Gig economy. Companies like Uber or freelancer provide ultimate flexibility and work brilliantly for some. For others, there are downsides. They include little to no job security; work is not always available and they are severely limited to access to credit.
By 2020, 30% of Australians and 40% of Americans primary source of work will be in the Gig economy. data
Replacing fulltime jobs with part time positions is rapidly accelerating. Per Capital Economist Paul Dale explains: data
“A lot of these employees are working part-time because they can’t find full-time work.”
“It’s restraining incomes and keeping wage growth low.”
The number of jobs rose by 13,500 in January, but that was entirely due to growth in part time work, with full-time employment falling by 44,800 jobs.
As the curve narrows, automation accelerates, and jobs become virtual, more people may be affected. Let’s hope that more canaries don’t fall off their perch, before society sits up and takes notice that there are potential risks, to rapidly changing employment conditions.
In 2017 approximately 2 million people of a workforce of approx. 12 million people are either unemployed or under employed data
The impact on those already affected cannot be underestimated. They understand about revolving doors of rejection and the financial and emotional burdens. It is affecting individuals, families and communities and the stress is escalating.
Many of those affected are changing their voting patterns. It started with Brexit, and followed by the US elections. The upcoming elections in Holland, France and Germany show similar trends. In Australia, the state elections in WA and QLD are a fractal of what is happening on the world stage.
Governments are dependent on income tax and its citizens being employed. It is in their vested interest to ensure citizens are viably employed, not just employed.
Based on the Australian Government Re:think tax discussion paper, by 2024-25 56% of total tax collections would come from Personal Income Tax (from 50% in 2013-14).
If society was a business and there was even a small chance, that there was a potential threat to that business, investigations would be conducted and actions taken to mitigate that risk.
Some governments are investigating those risks by authorising reports investigating the impact of artificial intelligence, automation and the economy. In December 2016, a US government report stated:
“Whether AI leads to unemployment and increases in inequality over the long-run depends not only on the technology itself but also on the institutions and policies that are in place”
To initiate a focused debate in Australia and create appropriate policies, Australians need to understand the current facts and trends. The good, the bad and the ugly. As Abraham Lincoln said:
“I am a firm believer in the people if given the truth, they can be depended upon to meet any national crisis”.
No single person, organisation or institutions will come up with the answers on their own. There is no holy grail. However once a potential risk is acknowledged by a nation, they are more likely to act together. What we want to avoid is a scenario highlighted by the Economist Andrew McAfee:
“Glittering technology embedded in a shabby society that generates inequality rather than opportunity”.
Our thinking of the future must go beyond the basics of policy alignment, particularly if they are out of date by the time they are written. Other basics must be covered like providing higher education standards, and investing in retraining before existing skills disappear.
Our thinking must reach out. We may need to work with the technologies that we have already created, to help promote our thinking. Watson, IBM’s super computer could be utilised to find the evidence to generate and rank hypotheses, about the future of work for Australians.
Our current thinking must be challenged, smashed, turned upside down. Scenario planning for the future of the Australian workforce must be on the political agenda. It’s not about tinkering around the edges.
Our business mindsets must be recalibrated to work with inclusive innovation concepts that consciously create employment opportunities for the many not just the few.
What is clear is: Relying on hope that enough viably economic jobs will be created just won’t cut it with the voters.
What is clear is: Intervention is required to stimulate the debate and that intervention is required now.
How many more canaries must expire in the coal mines, before our Australian business and political leaders realise there is a potential risk to Australian society, through lack of enough viable employment. It is a risk, which, once acknowledged, can be mitigated.
The trends are there. Not everyone has the aptitude to be an entrepreneur and not everyone is brilliant at the sciences…not yet at least. If even Silicon Valley gets it, so must Australia.
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