It’s not about the robots

In the wake of every recession, there is a spike in on-demand labour. But this is the first recession accompanied by the platform economy. Digital technology will augment the use of gig work, the most flexible but perhaps the most unfair and unregulated labour market out there. 

I’ve been taking a deep dive into the impacts of new technologies for a while now, and have just released a series on my findings. It took over three years to bring this remarkable "futures" project to fruition -- and it is more relevant now than ever. With help from Policy Horizons Canada (the Government of Canada's foresight agency) and experts from around the world* we finally got lift-off on this massive undertaking.

The big question we’re all asking: where are we headed? 

The specific question I was asked to look at: is a possible future scenario that digital technologies could unleash demand destruction (where demand is measured by GDP)?

If so, how would that happen and what would be the impact?

I traced the impact of a cluster of digital technologies - robotics, algorithms/machine "learning", 3D printing, telepresence, nanotechnologies, blockchain, and the internet of things - through the channels of economic transactions: consumption, production, investment, trade, financialization, and ownership. I also looked at how our measures of the macroeconomy and consequently macroeconomic policies are affected by digital technologies.

My main takeaway: For existing things we want and use, digital technologies tend to be deflationary (lower marginal costs of scaling; shorter supply chains; faster, easier outsourcing and insourcing supplies; labour replacement and substitution). “The robots gonna eat all of the jobs” isn’t the big reveal at all. 

Rather, the big issue to keep your eyes on: does technology lower the price of goods and services faster than the price of labour (wages and incomes), or vice versa? If the former, you're better off, even if GDP falls (as happens during recessions). If the latter, even if GDP rises you're worse off.

The pandemic produced more demand for gig workers like delivery workers; but app-based work and platforms are also climbing the skills and pay scale. Working from home is now a reality for millions of workers and employers, mostly in white collar jobs.  But if it can be done from your living room, some of it can be done from a room halfway across the world. 

Technology always unbundles tasks from jobs. Platforms make an accountant, engineer, draftsman, paralegal, medical diagnostician, journalist or editor available from another part of the world for a fraction of the price to do that *one* task, stat! That will mean more of Canada's highest paid workers will be in competition with people with their same skills sets from around the world. The globalization of blue-collar workers from the 1970s to the 1990s unleashed global wage convergence, meaning higher paid workers in richer countries saw stagnant or falling wages while other workers in the world saw better pay  and more purchasing power. That dynamic is about to hit white-collar workers for the first time. How it plays out will not be even, globally or within a nation. But just like everything else we learned in the pandemic, we always have choices on how we respond to maximize potential. 

We don’t have to be blind-sided by the predictable. We can use technology to help workers, not just consumers and employers; and we can harness our collective power to deliver better outcomes. But, like everything else we’ve learned in the pandemic, we have a choice to make. We can just let the market unfold simply on the basis of supply and demand, and transactional economics. Or we can aim for a  more equitable economic recovery where our personal agency and digital technologies are used as ways to secure decent work for the future of workers.

*Expertise from the International Monetary Fund, Bank of Canada, International Labour Organization, Organization for Economic Cooperation and Development, and the Centre for International Governance Innovation, Financial Accountability Office of Ontario, and economists from investment funds and commercial banks.


Find me on Twitter @ArmineYalnizyan, and on Instagram @futureofworkers.

The Atkinson Fellow on the Future of Workers is supported by the Atkinson Foundation. Find more information here.