Why it matters: The domino effect autonomous vehicles will trigger is immense. Insurance will have to change. High-speed data connectivity and smart roads will be deployed. These changes will require new regulations including new privacy or health-related regulations. Thousands of people will lose their job nearly simultaneously. The effect will strain the already battered social welfare systems. It’s not the next scenario that’ should worry us, but the second and third-degree changes.
Automation of Labor
As startups keep automating century-old processes, the menace of a labor world without human workers looms bigger. This wave is unavoidable and has significant repercussions for any country, but mainly, for any political party.
Politicians draw their power from their constituents (that’s the theory). Anything that threatens their livelihood is a political nuke. Automation of labor is the mother of all thermonuclear bombs.
The impact will reshape the political landscape. It will obliterate the old partisan groups and will give rise to new forces within the spectrum. It’s surprising though that there isn’t a single country-level regulatory framework
that covers this. The European Union spearheads the effort with some early-stage civil robotic laws
, but it’s still far off and too abstract.
The consequences of ignoring this are dramatic
. Addressing three side effects is essential. The obvious one is, what to do with all the low-skilled workers that will lose their jobs to automation. Many experts argue that their integration into the new digital markets will be impossible
. Besides, society needs to absorb these unemployed in a very short time span. For many, the only viable option to do this is through nation-wide Unconditional Basic Income
(UBC). The problem though is that the current experiments with UBC are throwing mixed results
“Whereas many auxiliary jobs are now performed by untrained workers, students or trainees on the basis of marginal employment, it is to be assumed that the demand for these jobs will decline massively in a technically modernized establishment. The integration of these workers into the new digital labor market is practically impossible.”
Why it matters: The state will need to support these vast amounts of long-term unemployed. This situation will add higher financial pressure to the social welfare system. The fact that such unemployment will happen within a short period will spark civil unrest and a deep political crisis.
Another issue to tackle is labor protection against automation. Will governments allow full automation of any job? Will there be a “Human Quota” for certain industries? Everything points to the rise of a “made by humans” brand. Right now there are zero thoughts or legislation around this. Some will see it as a protectionist approach, but Human Quotas might be the only way to slow down the growth of the unemployed artificially.
Last but not least, the automation of work will take a toll on our tax system. With fewer workers comes fewer taxes. As mentioned before, some countries are already toying with technology taxes
. But their scope is aimed at taking a cut of their digital businesses. There needs to be a serious analysis of what’s being automated and how much should we tax it with. Robot taxes will be first
, mostly because they’re easy to comprehend and straightforward. AI systems taxes might be a much more difficult
task to assess or tax.
“Many people will not be able to retrain for another position for physical or cognitive reasons. These people will become long-term unemployed and will have to be supported by the state. The high financial pressure on social welfare systems will be a central problem.”
Among the growing concerns around labor is the so-called Gig Economy. In all honesty, the Gig Economy isn’t new. It’s been in our societies for years now. Technology-enhanced platforms are only augmenting the impact of a preexisting situation.
Several ramifications are essential to explore. The first one is around what exactly is a crowd worker. There isn’t a clear cut definition, much less one all countries can agree upon. The absence of this makes it hard to decide which legislation applies to them. Most of the friction between startups and regulators is around this point.
Apart from an unclear description, there is uncertainty around what legal jurisdiction is appropriate. Most of the Gig Economy platforms have a global footprint. It’s hard to assess what takes priority; the country of origin of the crowd worker, of the recipient, or of the platform.
The outcome of such legal void is the unprotected status of the crowd workers. Governments need to start regulating on a pan-regional scope. For example, the European Union should set a Directive that describes and protects EU crowd workers.
“Crowd workers are freelancers who offer their skills via their computers on online platforms. Crowd working is a symbol of a changing world of work for white-collar workers in the gig economy. This covers smaller tasks, such as writing product reviews, searching for phone numbers, and more comprehensive work, such as testing software, providing legal advice, ghostwriting or designing and programming a website. […] These newly created ‘mini-jobs’ are particularly popular in developing countries and with young people.”