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The Progressive Policy Think Tank

The future isn’t working

Full employment is a tenet of classic social democracy – but what if that just isn’t applicable anymore? Nick Srnicek and Alex Williams survey the state of the British labour market and ask how a modern Labour party might reframe the issue of work so that it is sustainable and sustaining in the face of technological change.

As recent events in UK politics have demonstrated, we are in an era of extraordinary political transformation. Technological unemployment, climate change, crises of political legitimacy and social cohesion – the current moment demands radical, imaginative thinking. In particular, Jeremy Corbyn’s resounding victory in the Labour leadership race has given rise to a defining question: what does the contemporary Labour party stand for, beyond being anti-austerity?

While the other candidates all accepted the necessity of austerity to some degree, Corbyn’s victory was in large part based upon his principled anti-austerity approach. It remains difficult, nonetheless, to see how this might translate into a positive vision for the future, or into a forward-looking programme of structural economic reform. What, then, is the image of hope that Labour can put forth to mobilise voters and adapt the UK to 21st-century realities? What ambitious project can it rally the people around?

The argument of this article is that Labour should start building towards a society that is premised on less work. Not only is this increasingly possible, in light of rapid advancements in technology, but it is also looking increasingly necessary, as sluggish economic growth leaves the labour market weakened and as inequalities of economic power and reward remain entrenched. Such a strategy would help to define what happens after ‘anti-austerity’, it would work to establish a modern left politics outside the coordinates of ‘old Labour’ and ‘New Labour’ alike, and it will play a vital part in reorienting the party within a new environment of grassroots activism and political pluralism.

Precarious and lowly paid: the 21st-century labour market

Many will likely scoff at the claim that the UK labour market is weak. Employment levels are at all-time highs (since comparable records started in 1971), and unemployment has remained remarkably low during the aftermath of the 2008 financial crisis. As we write, it has reached a post-crisis low of 5.3 per cent. Surely, it must be argued, the UK labour market is healthy, particularly in comparison with the eurozone’s unemployment rate of 10.8 per cent.

But dig beyond these headline figures and not everything is as rosy. In particular, we need to question the quality and pay involved in the jobs. KPMG research notes that nearly 6 million British workers are working below their local living wage, with the proportion of workers under the living wage level rising each of the past three years to a current level of 23 per cent.[1] At the same time, this quarter of the UK labour market has been subjected to rising household debt, pessimism about their future finances and weakening job security. They have jobs, but these jobs are hardly meeting their needs. This is also expressed in the fact that nearly 10 per cent of the working population wants to work more – they are underemployed (which is often a euphemism for under-waged).[2] This hardly seems like a labour market that is meeting the needs of workers.

A similar story holds more widely as well. The Office for National Statistics, investigating the low level of unemployment after the crisis, notes that two-thirds of net job growth occurred in the self-employment category.[3] Since 2000, 90 per cent of new business growth has involved businesses with no employees.[4] And since 1959, the proportion of self-employed workers in the labour market has more than doubled (ONS 2014). This is a sector where jobs are more likely to be low-paying and precarious, and yet the UK has seen long-term growth in this sector, a trend which accelerated after the latest crisis.

Developed economies have also been facing a trend towards job polarisation: the traditional mid-skill, middle-wage jobs of old have been erased by technological change and globalisation, to be replaced by expansion in low-skill, low-wage jobs and (to a lesser degree) in high-skill, high-wage jobs.[5] In short, while the UK may have jobs, the quality and the security of those jobs have been suffering massively in recent years.

Unemployment or underemployment? The impact of technology on jobs

Those looking at the future of technology and work worry that even more problems are lying in wait just over the horizon. New technologies utilising machine-learning, big data and advanced robotics are threatening to drastically change the labour market yet again.

We can think about this in two ways. For one group, the potential problem is mass unemployment. A now-famous Oxford study estimated that 47 per cent of jobs in America would be automatable in the next two decades,[6] and a similar study for Europe arrived at a figure of 54 per cent.[7] In the UK, Bank of England research suggests that 15 million jobs will be automatable – in a labour market of 31 million people (Haldane 2015). Taken at face value, these reports suggest a huge problem of potential unemployment.

Perhaps this need not be the case: as some jobs are automated away, others will be created in areas that cannot right now be predicted. Still, the number of new jobs created may not be high. For instance, it is estimated that eight times more jobs will be created over the next 10 years by the need to replace retiring employees than will be generated by new types of jobs.[8] More importantly, as the UK’s recent history shows, a combination of low-wage jobs, underemployment and part-time working can forestall the impact of these problems from showing up in unemployment statistics.

More likely than mass unemployment, then, is a second possible pathway: a decreasing number of good jobs. This means lower pay, more part-time jobs, more contract work, more self-employment, and more precariousness in general. And given the expansion of surplus labour available (even without mass unemployment per se), this will be expressed in lower-quality jobs: confident in their ability to find a new worker at a moment’s notice, management will simply pressure workers to work harder, faster and longer.

It is impossible to precisely predict what effects emerging technology will have on the labour market, but all the signs point towards a difficult future for very many workers.

The future of work

It does not have to be like this. However, achieving a different outcome means rethinking what the Labour party – and the left more broadly – is orienting itself towards. The leadership election showed the limited appeal, at least within the party, of a defensive form of social democracy. Rather than becoming overly reliant on a tax and spend strategy, Labour could present a bolder political economy aimed at changing how the economy works and for whom. What that bolder economic strategy would look like in practice has only vaguely been sketched out – and one vital area for further examination is how the left thinks about the politics and purpose of work.

The demand for full employment has been a tenet of social democratic parties and trade unions since at least the great depression. With few exceptions, the aim has been to provide well-paid, high-quality, permanent jobs for everyone (though with important disparities in terms of gender and race). But what if this is no longer possible? Or, perhaps more radically, no longer desirable?

In 1932, in the midst of the great depression, Keynes famously forecast a future in which people would work 15 hours a week and leisure time would be massively expanded. Today, given the entrenched problems of the UK labour market – high employment at the expense of high-quality jobs – and the likely exacerbation of these tendencies as further technological innovations hit, perhaps we need to rethink how we approach work.

The UK government has a significant role to play in this. At least three complementary options present themselves.

The first option is simple enough: a reduction in the length of the working week. A vast amount of research supports this move, in terms of productivity, mental health and environmental gains.[9] If the amount of work needed to run a healthy economy is decreasing then a reduced working week is a crucial means of spreading the remaining work out in as equitable a manner as possible.

The second option would be to lay the groundwork for a sustainable and effective universal basic income. This could build upon experiments in Canada and the US in the 1960s, along with more recent experiments in the Netherlands, India and Namibia. Besides being an immensely effective anti-poverty tool, a universal basic income enables people to freely choose whether to take a potentially demeaning, dangerous or low-quality job – or to choose some other life path instead. Some would choose to further their education, gaining new skills in the process; others would turn to the household in an effort to care for their families; and still others would turn towards creative activities as a mode of expression. A universal basic income is an important foundation of freedom in a world where good jobs are on the decline.

The final possibility is greater public investment into the research and development that underpins technologies for automation. Taking a lead from Mariana Mazzucato’s path-breaking work on the role of the state in technological development, we could here imagine a state seeking to build up the technologies needed to eliminate the worst jobs.[10] In the first place, this would help to overcome the stagnant productivity of the UK, but it would also liberate workers from having to do demeaning, dangerous and dirty work. Similarly, new thinking on governance and ownership, particularly in the deployment of new forms of technology, offers a way for public policy to help democratise the gains from economic productivity. Such a process would create the space for more fulfilling work and, more importantly, more fulfilling lives.

Work and a modern Labour party

While Jeremy Corbyn’s opponents have presented him as a throwback to an old-left style of politics, in fact he has been the only one to recognise the changed realities of the UK in the 21st century. Creating a mental health position in his shadow cabinet, questioning the utility of the Trident nuclear programme and NATO, calling for social support for the self-employed – all these reveal a politics that is very aware of contemporary Britain and its discontents. Meanwhile, his opponents’ prevailing thinking appears mired in the past: a cold-war fascination with obsolete security communities, fond nostalgia for the 1990s, and increasingly punitive attempts to create good workers when good jobs no longer exist. The space exists for a new future to be articulated.

But if Labour wishes to shed the past completely, it should reject outdated social democratic goals and present a radically new future of less work, high-tech automation and socialised productivity gains. This would be an ambitious and hopeful vision that promises direct improvements in the lives of everyday people. Only in presenting a vision of the common good that is more modern than what can be achieved under the current austerity regime can Labour seek to redefine the terrain of the possible in British politics.

Nick Srnicek and Alex Williams are the authors of Inventing the Future: Postcapitalism and a World Without Work (Verso, 2015).

This article appears in edition 22.3 of Juncture, IPPR's quarterly journal of politics and ideas, published by Wiley.

[1] Markit (2015) ‘Living Wage Research for KPMG’, KPMG.

[2] Haldane A (2015) ‘Labour’s Share’, speech, Trades Union Congress, 12 November 2015.

[3] Office for National Statistics (2014) Self-employed workers in the UK – 2014.

[4] Department for Business, Innovation and Skills (2015) Business Population Estimate for the UK and Regions: 2015 Statistical Release.

[5] Goos M, Manning A and Salomons A (2009) ‘Job Polarization in Europe’, American Economic Review, 99(2): 58–63; Autor D and Dorn D (2013) ‘The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market’, American Economic Review, 103(5): 1553–1597.

[6] Frey CB and Osborne M (2013) The Future of Employment: How Susceptible Are Jobs to Computerisation?, Oxford Martin School.

[7] Bowles J (2014) ‘The Computerisation of European Jobs’, Bruegel blog, 24 July 2014.

[9] It has been estimated that the US would reduce its energy consumption by 20 per cent if workers there moved closer to the average European working week: see Rosnick D and Weisbrot M (2006) Are Shorter Work Hours Good for the Environment? A Comparison of US and European Energy Consumption, Center for Economic and Policy Research.

[10] Mazzucato M (2013) The Entrepreneurial State: Debunking Public vs. Private Sector Myths, Anthem Press.