By Bernard Hickey
The Labour Party held its 'Future of Work' Conference in Auckland this week, which reheated a growing debate about whether New Zealand should adopt a Universal Basic Income and refocused attention on how new technology will affect how workers earn a living (or don't) in future.
Labour Finance Spokesman Grant Robertson, who launched a 'Future of Work' Commission last year as part of Labour's policy review, told Interest.co.nz in a Double Shot interview the Commission was looking for responses to a world where growing automation and globalisation was changing the nature of work and income earned from work.
A third of American workers were now working in the 'Gig Economy' where they were essentially freelancers with multiple employers, often for work obtained online.
"It's much smaller at the moment in New Zealand, but it's likely to get bigger. The studies that are coming out now are saying people are having two or three employers at any one time.
"The average school-leaver will have 6-8 careers. The whole notion of a job is under challenge," Robertson said, referring to IBM's Project Liquid, whereby it employed contracted workers and as part of plans to lay off 8,000 workers in Germany.
"The notion of a job with set hours and going to a place to go to work is already challenged and will start to become less and less normal in the future," he said.
There were opportunities as well as challenges.
"The idea that you could build your work around your life rather than the other way around is hugely attractive for people, but if flexibility is forced on you then it's not flexibility at all, it's exploitation," he said. "And we've seen the whole zero hours contracts, which in some people's minds would be the ultimate flexibility -- certainly for the employer, not the employee."
Risks of growing inequality
Robertson said one of the Commission's tasks was to look at the risk of growing income inequality. "Those who have the skills that are in demand will become more in demand and those that don't will be automated out of work and their labour will be less valued," he said.
Robertson said ensuring workers could retrain was a crucial part of the puzzle.
"If there's going to be this constant change, we need to enable people to train and retrain, and Labour has already made some announcements around three years of free education and training post-secondary school," he said.
He also pointed to a discussion paper from the Commission on Denmark's 'flexi-security' system, whereby workers can get two years of unemployment benefits at 90% of their previous income in any three year period, along with six weeks of free re-education programmes when unemployed.
'Universal income an option'
"We are also looking at the income security side and whether or not some form of universal income could be a possibility. That's a long way down the track. It's created a bit of excitement, but we do need to re-think the way people come in and out of the benefit system, and the drag that is on people at the moment," Robertson said.
Asked if a full Universal Basic Income paid by the state (rather than an extended Working for Families style Guaranteed Minimum Income) was too expensive, he said: "That's a fair criticism in order to do a truly universal income."
"How do we enable people to live decent lives when they might be out of work for extended periods, or coming in and out of work. That's the big focus for us. Whether that's turns out to be a form of guaranteed minimum income rather than a universal basic income -- that there would a minimum level, rather than everyone getting paid that by the state -- they are two different models," he said.
"People in New Zealand get very attached to Gareth Morgan's model that he put out in the Big Kahuna. But right now in Finland a centre-right Government is looking at the UBI and it's being trialled in Utrecht in the Netherlands. This is the beginning of the conversation."
Capital or land taxes?
Robertson said any changes in the income security system had to go hand in hand with changes to the taxation system. Morgan's 'Big Kahuna' proposes a new tax on capital that works out at 1.8% of the value of non-current capital, which also works out at 30% of income, assuming a 6% return on capital. Morgan proposed a flat tax of 30% on all income.
"What we're looking at is not going into the election with a capital gains tax, but with a commitment to create a fairer and more balanced tax system. There are a lot of alternatives out there. The Tax Working Group's document was an excellent piece of work and looking to update that when we're in Government," he said.
"I'm determined that a Labour Government will have a tax system that is far fairer in terms of how wealth is generated," he said.
Reich eyes IP tax
Former US Labor Secretary Robert Reich addressed the conference in Auckland with a presentation titled 'Saving Capitalism: For the Many, not the Few", which spelled out the risks of a 'shared economy' becoming a 'share the scraps economy'. He said many of the plutocrats owning the technology companies were now worried about who would buy their products and services if there were not enough workers earning enough wages to buy them.
He said a Guaranteed Minimum Income was one response, although he cautioned it was some time away and was very expensive.
"The money to pay for a Guaranteed Minimum Income would come from a small share of revenues from intellectual property," Reich told reporters after his address.
"After all, it is that intellectual property -- those patents and copyrights -- that generate more and more of the protection for the innovations and ideas that will lead to technological replacement of most jobs. By that logic, a portion of those revenues should be utilised to pay for a Guaranteed Minimum Income," he said.
Reich said Government rules created the ability for companies to make money from intellectual property, so a slight change in the rules would mean a portion of the revenues could be put into a fund that financed a Guaranteed Minimum Income.
"This is something for the future and I see the direction of technological change almost requiring that in 10 or 15 or 25 years we get into these weeds and grapple with the necessity of a Guaranteed Minimum Income, but before we get there there's so much else to do."
'The unemployed baristas of the precariat'
Elsewhere, Professor Guy Standing talked about a new 'precariat' of workers unable to find secure and well paid work becoming increasingly disillusioned, angry and vulnerable to the suggestions of populist politicians such as Donald Trump and Marine Le Pen.
Also, Swedish academic and business man Goran Roos predicted that service industry jobs were about to be destroyed in a similar way to manufacturing jobs as new technology and globalisation accelerated productivity growth in services to 6-10% from 0.3% previously.
"That means that the jobs in services will disappear at an unprecedented rate," he said, predicting that baristas would be replaced by robots that would pay for themselves within nine months.
He referred to the use of technology by lawyers and accountants that removed much of the back office in such white collar services industries.