Davos: why measures of economic progress must consider the quality of work on offer

Applied Institute for Research in Economics

Professor David Spencer is the Head of Economics Division. His main research interests are in the area of the economics and political economy of work. This article first appeared on The Conversation.

Davos protestors

Davos offers a place for the rich and not-so-famous to meet and exchange views on the present and future of capitalism. As in previous years, the theme of automation and the “fourth industrial revolution” has been a core of the 2019 meeting. The concern is over how technology might help to raise economic growth and add to prosperity.

Lip service, of course, is paid to wider social and ethical goals, but in truth the central concern is with the needs of the global economy. The worship of growth (measured by GDP) dominates proceedings.

But this focus diverts attention from what are pressing problems in society. In particular, it misses the costs of work. Far from the ski slopes of Davos are real people struggling in dull jobs and on stagnant incomes. Any consideration of how technology will destroy or create jobs needs to recognise that the quality of the work we do is also important.

The fourth industrial revolution includes the rise of artificial intelligence, 3D printers and driverless cars. While many fear the disappearance of jobs due to digital automation, debate at Davos recognises the capacity for technology to create new jobs. It will present new sources of demand and new work opportunities such as engineers to design and service the new digital architecture.

Yet, the prospect of jobs growth is itself a problem if it means workers working in more low quality jobs. If technology erodes the skill content of work, drives down wages, and raises the duration and intensity of work, then workers may face the prospect of having to undertake work that is much worse than now.

Work realities

The rise of the so-called “gig economy” shows the darker side of technological innovation. Advanced economies have seen a steady decline in skilled manufacturing jobs and the growth of low-skilled zero-hours contracts jobs in their place. Meanwhile, the output of large corporations continues to grow, showing how technology can be harnessed for profit-making, at the expense of the welfare of workers.

The hard realities of work in modern society speak to the limits of visions of progressive change via automation. They highlight, in particular, how technology may add to the problems of work, while sustaining people in work.

The focus on economic growth, as measured by GDP, does not help here. Consider an economy where GDP is rising. Growth may be fuelled by rising employment, higher work force participation, and/or longer work hours. But this fails to consider the costs of the work involved. The fact that GDP may depend on a substantial number of workers being exposed to toxic conditions at work is obscured. And the process of generating GDP growth often has an environmental impact, including more pollution and waste.

Automation as distraction

At Davos and other forums, it is convenient for big business to focus on the topic of automation. It creates, on the one hand, a sense of fear about the future of work. This fear is useful for capital owners because it helps to suppress wages and reduce demands for better work, as people become just so grateful to have a job at all.

The focus on automation, on the other hand, helps to win support for the status quo. Capitalism, so the story goes, is not to blame for the ills of work, but rather these ills stem from the seemingly natural processes of technological change. Technology, in this way, becomes a useful mechanism to hide the specific injustices of work linked to existing corporate structures and practices.

Davos promotes the fourth industrial revolution slogan, in part because it reflects the interests of the class that it represents.

In our society, technology does not guarantee – as it should – more leisure time and more meaningful work; rather it offers more work and, for many, greater drudgery. Paradoxically, the prospect is of work continuing, while technology advances.

The reason for this paradox relates at an essential level to unequal power. It reflects who owns and controls technology – how powerful capital owners can use it in the service of profit generation. The discussion at Davos about technological change remains closed to voices demanding real change. Yet it is only by reimagining technology – its ownership and control – that we can create a better automated future.

Meanwhile, concerns about sustaining economic prosperity must incorporate measures of the quality of work available to people. Beyond growth, we need to embrace measures of progress that capture how well work fits us as human beings. Some useful attempts to define the quality of work exist. The challenge is to use these in conjunction with other measures such as GDP to come up with broader indicators of economic and social progress. That way, we might realise ways of working and living that are to the benefit of all.The Conversation

David Spencer, Professor of Economics and Political Economy, University of Leeds

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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The views expressed in this article are those of the author and may not reflect the views of Leeds University Business School or the University of Leeds.