Using technology to transform labour markets post Covid
Around 30% of the UK workforce will be coming out of furlough onto Universal Credit, if they are not already on it. It is said that only 6% of want a return to the economy as it was pre-pandemic. What does a possible new labour market look like?
I first met Wingham Rowan, one of the proponents of Modern Markets for All, in 2013 when he was running government’s Slivers-of-Time Working initiative. This would have created official markets for ad-hoc employment. It was then subsumed into the predictable, and predicted, train crash that is the Universal Credit. But officials then, and now, still hanker for an increasingly illusory world of predictable employment which they can regulate and tax. Hence their persistence with not only an impossible approach to the implantation of Universal Credits but also attempts to extend IR35 at a time of unprecedented change.
Technology will undoubtedly be used to transform labour markets over the next year. But will it be used to free or to enslave those whose pre-Covid jobs have been destroyed.
Read on for Wingham’s thoughts on how technology could/should be used to help build a fairer, not just freer and more flexible, labour market:
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Solving the Markets Problem. How tech. could drive a more inclusive recovery.
Governments are getting radical. , exploring previously marginal policy possibilities as electorates get edgy. For insights, we can look to the US; where 40% of the public now regard socialism as “a good thing”. Universal Basic Income has a network of US Mayors committed with tech billionaires like Chris Hughes (Facebook) and Jack Dorsey (Twitter) funding pilots. Campaigns for a Green New Deal and a right to free university education are gaining traction. If widely adopted, schemes like this would massively increase taxation and politicians’ control of the economy.
The role of technology in the public’s hunger for a new world? Too often, it’s the bad guy. Calls to break up the big players, force crackdowns on hate speech and curb malign foreign influences on elections exemplify where our sector stands in the estimation of so many people.
But tech. should be seen as a force for good.
Touting policy possibilities utilizing the sector’s strengths is more important than ever. Our solutions may not be politically polarizing and, therefore, won’t necessarily attract controversy seeking journalists. But that could help them find acceptance. A portfolio of eye-catching proposals could get us off the back foot in policy debates. Can we match the radical mood of this moment without repelling those suspicious of our intentions?
One possibility that’s come out of UK government projects involves addressing the way new technologies have created one-sided labor “markets” for the low-skilled. The best known of these platforms is of course Uber. It’s easy to think of the app as just a cool way to get a cheap ride. But low-income breadwinners looking to entrepreneurially pick up extra work see another side.
Members of this group will probably have noticed coverage of Uber: misleading work-seekers, slashing pay, distorting the service, withholding data and systematically undermining regulation. And they will know from other reports, Uber’s behaviour is not an aberration, it’s a business model. Countless well-funded companies strive to be “The Uber of” some other part of the economy. We should not be surprised at the unpopularity of technology companies among swathes of the population.
“Modern Markets for All”
A solution to this widespread perception of unfairness is a policy of “Modern Markets for All”. It aims to create a comprehensive officially backed platform in which anyone can sell anything subject to being legally entitled to do so. But sales are limited to small transactions, so it trades what regular people and small businesses have to sell. That’s a personalized mix of labor and assets that could be rented. Think; cleaning, bike rentals, temporary retail staff, gardening, baby-sitting (after validation) or parking spots. Advocates believe genuinely empowering, state-of-the-art markets, seamlessly covering thousands of sectors like this, could push opportunity through the micro-economy.
The initiative calls for policymakers to couple official benefits with obligations on operators to shape a “public option” for today’s online markets. So, government might announce that all public spending on flexible labor will go through the new markets, those markets will be allowed to interface into all official databases and processes, while government’s capacity to raise public awareness will get behind the putative platform.
In return for these unique benefits, a private sector consortium running the markets has to agree to transparency, neutrality, accountability to users, publicly shared data, and a cap on charges for usage. A model for this kind of initiative is the 1993 National Lottery Act. That had 7 consortia bidding to fund, design and run the new service. Camelot won, government got out of the way, and as we know, Camelot very profitably delivered.
UK tech. policy can lead the world, in unexpected ways.
Tech. companies could get on the front foot with policymakers.
But if tech. companies want to cast off the public perception that they are part of the previous economy’s problems, they could start offering genuinely radical solutions to the pressing problems now experienced by billions of breadwinners around the world. Policymakers are wrestling with these issues, often with little centre ground between a return to the despised old ways and campaigns demanding a complete upending of the economy.
The insights and resources of our sector could be helping them shape a spectrum of options. That may require teaming up with outside thinkers. Financiers did this intelligently when they partnered with environmentalists to promote Cap-and-Trade policies and carbon markets to policymakers seeking climate solutions.
The Modern Markets for All advocates are keen to dialogue with tech. companies who foresee a thought-leader role for the sector in post pandemic economies. Any takers? www.ModernMarketsforAll.org