How do we create
meaningful work in an age of automation?
New
workplace trends such as automation, AI, and the gig economy are generating a
need for policies that create jobs and work that is more fulfilling.
This summer, the UK government published a long-awaited independent review of
employment practices in the modern economy, led by Matthew Taylor, chief
executive of the London-based Royal Society for the encouragement of Arts,
Manufactures and Commerce (RSA). His review and policy recommendations
addressed questions about automation in the workplace, the influence of the
so-called gig economy, and the need to create better work.
Taylor sat down
recently with James Manyika, chairman of the McKinsey Global Institute, whose
recent research agenda has tackled many of the same and similar topics
(notably the future of work, independent work, automation, and declining productivity). What follows are edited highlights of their
conversation. It begins with Taylor outlining the scope of the UK report.
How do we create meaningful work in an age of
automation?
Podcast transcript
Matthew Taylor: We’ve been exploring three
questions. One is who’s being exploited, how they’re being exploited, and what
might we do about it. Second, an understanding of the incentives that are
driving changes in the labor market. Third, we’ve addressed the question of
work itself. The review stands on the assertion that all work in the British
economy should be fair and decent with scope for development and fulfillment.
The UK does very well
on quantity of work. There are still too many people unemployed, too many
people underemployed, too many people who declare themselves as not being
available for work. But actually—when we ask them more deeply—they would be
available for work if the right kind of work was there.
Overall, we do very
well on quantity of work. We provide a lot more flexibility than other labor
markets, but we have a problem about what I would refer to as one-way
flexibility. That’s flexibility in which, basically, organizations are trying
to transfer the whole risk associated with their organization onto the
shoulders of the most vulnerable workers.
The gig economy
James Manyika: Even though economies have
recovered from the recession, the quantity of work in quite a few places—you
could argue Spain, you could argue the United States, and a few others—isn’t
quite what it needs to be.
I am intrigued, though,
on the question of flexibility, because one of the things we’ve been looking at
has to do with the so-called rise of the independent-work or gig economy, which has been a widespread phenomenon. It’s been
there for a very long time, but I think it’s become particularly visible where
it’s digitally enabled, where people are doing car-ridesharing services or
other kinds of things like that form.
Matthew Taylor: You’re right about these new
forms of gig work [being widespread]. We have seen a steady growth in
self-employment, of course, in this country. And when that self-employment
growth started after the world economic crisis, there was a sense that this was
because people were choosing self-employment because there were no jobs available.
It was involuntary self-employment. But, actually, as the economy has improved,
self-employment has not fallen. It is continuing to rise, perhaps not at quite
the same pace, and so I think we have to recognize that it reflects a number of
factors.
So we are seeing more
people working past retirement age, and wanting to work in a way which they can
control. We are seeing more people who simply want more autonomy and
flexibility in their lives, in the way that self-employment can offer. And then
these platforms come along and facilitate that; they make it easier for people
to work in exactly the way they want to work. Therefore, the challenge is to
make sure that we exploit that opportunity to give people the kind of work they
want, in the circumstances they want, but to make sure that we do it in a way
that is fair and sustainable.
One of the technical
questions that we have to address is the divide between people who are
self-employed—and therefore don’t really have many entitlements to
employment-protection rights—and those who are workers. What we try to do in
our report is to suggest how you might draw that line in a way which is fairer,
but also enable businesses to develop a business model in light of what the
regulations are. But in the end, business leaders are realistic. What they
really want is a framework which is stable, so that they know when they set
their business up, they’re not going to have the rug pulled out from under
their feet by some regulatory shift halfway through.
James Manyika: I would tend to agree with
that. One of the things that’s quite interesting to me, and [is supported by]
some of the research we’ve done about independent work and the gig economy, is
that if you look at most countries—and we’ve looked at about five or six
countries including the UK and the United States and others—the majority across
those countries who do independent work actually do it because they prefer it.
Matthew Taylor: About two-thirds.
James Manyika: Yes, they prefer the
flexibility, the independence, and quite often, in some cases, these are people
with unique skills, who find that when they can deploy them across a much
larger number of users, if you like, or customers, it’s actually very helpful.
But it is important to
know that there is about one-third of people who are doing this out of
necessity, and the necessity comes in a couple of flavors. Either because they
can’t find traditional employment—and you find that, for example, that
proportion has been quite high in some countries, like Spain, for example—or
they’re doing it because, even though they may have a full-time job, they don’t
earn enough from that job and are trying to supplement their incomes. So you
find that this other third are concerned about income stability and the
variability that comes with that. They’ll worry about the portability of
benefits, although the portability of benefits tends to affect even the ones
who prefer it as well as ones who don’t, but it becomes very acute for the ones
who don’t prefer it.
Matthew Taylor: There are two additional
concerns that people have about gig work. The first is that we might see the
emergence of very, very powerful companies that then have a kind of
monopolistic position. Second, what is sometimes called the Uberization of
jobs. One of the things we heard in our visit to people around the country was
that their business model was being undercut by people moving to this
gig-working basis.
So, for example, we
were at one hearing where we heard about a removals firm. The guy who ran the
removals firm, he employed people—you know, he paid into their pensions. This
is what he’d always done. He was now competing with a removals firm down the
road that was pretending that the men who worked for him were self-employed.
And I would say that that was erroneous self-employment, but he was claiming
and getting away with the idea that they were self-employed.
James Manyika: I think it’s important to
look at the other side of that, too. Which is, with a lot of the independent
work and the gig-economy work in its modern forms, there’s usually a very large
group of happy users and consumers of these services—whether it’s
car-ridesharing services or any other task-oriented gig-economy work. And quite
often, these services fill a need where they were otherwise either too
expensive via traditional mechanisms or not provided at all.
So you’ve seen examples
where services now pop up in places where traditional versions didn’t, whether
it’s places where taxis never used to go to before, poor neighborhoods, or
places where you couldn’t find accommodation.
Matthew Taylor: I think this is exactly the
point. These new technologies, sharing, and gig work offer enormous
opportunities, not just in terms of improving the quality of service but also
in terms of giving people flexibility and potentially dis-intermediating. So
that, actually, the people that provide these services can own the platform
they use.
We could see, I think,
the rise of mutuals and cooperatives, and new business models based on the fact
that you don’t need a headquarters and all the bureaucracy that goes with it.
You can just have a place and an algorithm. And you can start to enjoy the
economies at scale that come with that. But we need to do that that in a way
which is fair to those workers, fair to the market as a whole, and also
sustainable in terms of the fact that governments need taxes.
Implications for companies
James Manyika: The question for employers is
how to think about giving their workers the kind of flexibility that they need.
Because, in many companies, there’s such rigidity. Quite often, the reason
people are opting for these independent forms is because they’re looking for
flexibility—the kinds of choices about working hours, working conditions, and
working style.
The other thing that
companies need to think about—and this might also even include the companies that
are providing these platforms—is how do they provide a mechanism for the
ratings or benefits to be able to move around with the workers? And how do they
help workers stabilize their incomes? Because we know that when people are on
these platforms, one of the biggest concerns is the variability of incomes.
Matthew Taylor: This goes back to the point
about two-way flexibility, which these gig platforms often provide; as a
worker, you can choose exactly when you want to work. And one-way flexibility,
which is typically around forms like zero-hours contracts or lower-hours
contracts, where the employer says, “I can only guarantee you two hours a week,
but I’ll normally want you to work 30 hours a week.” But that means, that if
there’s any downturn, the employer can immediately throw that risk onto the
worker. Second, it means that workers have fewer rights, and they feel that if
they ever stand up or question decisions, they won’t get any hours in the
future, because they have no rights, for example, around unfair dismissal.
The opportunities here
are huge. There’s a major supermarket in Britain that is looking at an app that
enables its workers to work overtime in any store they want to. Also, it
enables those workers, if they are working in a particular part of the store,
to know what other parts of the store they could work in, given the skill set
they have. This is opening up to lower-paid retail workers the kind of
flexibility that middle-age IT consultants enjoy.
The importance of ‘good’ work
James Manyika: I wanted to pick up, Matthew,
on the quality question. Is it really about incomes or is it about other incomes
and other things?
Matthew Taylor: It’s a great question. What
do we mean by good work? We know that wages matter to people, particularly to those
who earn less. In a way, people are less concerned with the relationship
between their wage and the superrich than they are between their wage and the
person who might be one step above them in the hierarchy, for example. People
want to see a decent wage, and they want to see fairness. But once you move
beyond that—and indeed, overall surveys show that people are saying that pay is
a less important part of what determines whether work is good than it used to
be in the past—you come up against the same kinds of things, meaning people
want a sense that their work is meaningful and that they are doing something
useful, something that they can feel proud of.
Autonomy—people want to
feel that they are able to make judgments and make choices at work; they will
not simply be a cog in a machine. What might be called mastery: the sense that,
“I am getting better at something, and in getting better at something, I am
enabling myself to have more choices in life as a consequence of the job that
I’m doing.” And then teamwork, camaraderie, and the sense that, “I am part of
an organization that is inclusive and fair.”
We need to show a lot
more imagination about how it is we can bring those things to lower-paid,
lower-skill jobs. Many of us who are middle class and work in great
organizations, we’re used to these things. But there’s no reason why jobs in
caring, jobs in retail, jobs in security, transportation—can’t have those
qualities, if we’re clever about the way in which we manage our organizations.
James Manyika: We’ve looked at one part of
that, the income part. And we know that one of the things that’s changed
dramatically in most of these advanced economies is that the rate of income
progression has just stalled. Huge chunks of workers in these countries have seen
their incomes stagnate and decline. How much do incomes matter versus some of
the other things that you mentioned in that bundle that constitutes good work?
Matthew Taylor: Clearly, income matters a
great deal. And you’re right, the stagnation, the long-term stagnation of
living standards for what I think in America you’d call middle class is a
phenomenon. It may well be connected to a broader dissatisfaction with
authority, although I would say that the disenchantment and social pessimism
seems to have started earlier. It’s less about absolute wages as long as you’re
above the bottom. It’s the sense of going forward. It’s the sense that next
year might be better than last year.
That flexibility
varies, of course, across the age range. Women care more about flexibility and
less about income in comparison to men. People past retirement age care more
about flexibility and satisfaction from their work, but possibly because they
have some pension and they are not so totally dependent on the earnings.
James Manyika: In some of the work we’ve
done, if you compare decades previous to 2005 and you ask the question, “What
proportion of households in most advanced economies, including the UK and
Britain, and the US, have households that have seen their incomes stagnate or
decline?” Previous to 2005, those were in the single digits; for the United
States, it was less than 2 percent. Whereas if you look at the period from 2005
to 2014, for the US, that number was 81 percent.1For the UK, it was 70 percent. So, these are stunning
differences in levels of stagnation that we hadn’t seen in previous
generations. In previous decades, you’d have said that even though we had waves
of inequality, at least most people, the vast majority, were progressively getting
better.
Changing expectations
James Manyika: One of the interesting
questions for our societies is, What are people’s expectations? For the most
part, the last several decades have delivered on the expectation that
successive generations will be successively better off than their parents. That
was one of the reasons we titled the research we did on this Poorer than their parents? A new perspective on income inequality. And so to the extent that people
started to think that their own lives, as well as that of their children,
aren’t going to be better off than theirs was, I think it starts to seed and
create a sense of discontent.
I just wonder, What is
setting that expectation? Is that measured on incomes? Is that measured on
standard of living? Is that measured on flexibility and choice? What is that
expectation? And is it changing?
Matthew Taylor: I think it’s a fascinating
question. Just take one element of this. The Internet has transformed what it
is that poorer people are able to access simply by owning a single device. So
we talk about living standards, and we simply see it in terms of disposable income
with some kind of inflation deflator. But 20 years ago, in order to have access
to the world’s libraries, in order to have access to the best films, the best
shows, in order to be able to communicate with people on that side of the
world, you’d have had to be very rich. Now you just need to have a mobile-phone
contract. So I think that understanding what people count as being the critical
things that they need in life is a really interesting thing.
James Manyika: I tend to agree with you. I
think when we look at things like technology and globalization, by and large,
they’ve given us choices and utility and a whole set of things. But as one
political scientist reminded me the other day, he said, “Well, you forget one
thing, which is that people don’t vote as consumers; they vote as workers.”
If they voted as
consumers, we’d all be fine because we’ve delivered choice, we’ve delivered the
Internet, and we’ve given them all these things that have made life infinitely
better: access to education, entertainment, all the rest of it. If that was the
question, we’d all be fine. The problem is when people express their points of
view as voters, by and large, they’re voting mostly as workers.
Matthew Taylor: When I worked in government
12 years ago or so, there was a phrase that described the policy, and that
phrase was, “Work first.” And woe betide you if you were in a seminar or a
discussion and you talked about training or the quality of work or anything
like that, because a civil servant from the Treasury or the Department of Work
and Pensions would say to you, “Forget all of that. Work first.” If people
don’t have a job, they are miserable and they are sick. And the longer they
don’t have a job, the less likely it is that they will get a job. So just get
them a job, any job.
And that was the
prevailing view, and there’s a lot of strength to that view. It is absolutely
true that the number-one antipoverty strategy in any economy is to get people
work. But I think that that possibly has now run out of steam and that people
are now starting to say that it’s not just about everyone having a job, and
it’s not just about the income, but it is, as I say, about the quality of that
work, about whether or not it balances other parts of your life, whether or not
you get fulfillment from it. And maybe this does link into the conversation
about universal basic income, because it’s also about saying perhaps society
needs to recognize and acknowledge the nonwage work that we do, the caring work
that we do, the volunteering work. And so the idea, part of the idea of
universal income, is possibly moving away from the idea that you have to have
paid work to be a valid citizen.
James Manyika: Most of the jobs that have
been growing since the recovery of the recession look like care work, but often
that’s work that’s unpaid. Back in 1964, President Lyndon Johnson commissioned
a report and a study, the Blue Ribbon National Commission,2to look at automation and technology in work. I
remember there’s one striking conclusion that was captured in a phrase that
said that technology destroys jobs, but not work. The reason that’s interesting
is that there’s still lots of things to be done.
We don’t recognize it
as work in the formal sense. We’ve never had effective income models for that
kind of work. Either it goes unpaid or it doesn’t get paid very well.
A basic income for all
Matthew Taylor: I’m a big advocate, the RSA
is a big advocate, of universal basic income (UBI). We’ve done a lot of work on
it, working on various pilots in Britain and other places. I think there’s a
big divide in the UBI argument. There’s one UBI view, which is captured
beautifully in the phrase “the right to be lazy,” which is that UBI is an
opportunity for us to live in a kind of world that Marx envisaged, or Keynes
envisaged, where we only work ten hours a week and the rest of the time we’re
reading philosophy, writing poetry, and fishing. If we could have such a world,
great, but that’s not going to happen in my lifetime or even my grandchildren’s
lifetime.
What I think UBI should
really be about is enabling flexibility, enabling choice. It’s about saying,
How can we make it easier for you to combine work and care and bringing up
children, looking after relatives, looking after your neighbor, volunteering,
being active in society? How can we make it easier for people, whose work is
not fulfilling, to drop out of work? Not to sit on their couch all day watching
TV, but to maybe retrain or to set up a business, or to run a business from
home. So for me, UBI is about enabling people to have a greater sense of agency
in a fast-changing world of work, and to combine work with other things in
their life.
James Manyika: Would you condition it any
way, or would it be totally unconditional?
Matthew Taylor: I wouldn’t make it
conditional because that just leads to a huge amount of bureaucracy. And it
leads to an adversarial relationship between the government and citizens, which
I think is a bad thing. To be honest, I’d just make it quite low. So we’re not
talking about something on which you can fly around the world and have holidays
on. We’re talking about something that just enables you to survive and keep
going.
The other critical
thing about UBI is that, unlike most welfare benefits, you don’t lose it when you
get a job, so it strengthens work incentives.
Impact of technology
James Manyika: One thing we haven’t touched
upon is the impact of technology on all of this. Does that make you more
optimistic, or does it make these kinds of challenges worse?
Matthew Taylor: We’ve done a lot of work at
the RSA, and we’re precisely at this question of the impact of automation on
low-paid, low-skill jobs. I think our argument would be that a lot of the
hype—about 30 or 20 percent of jobs are going to dissipate—isn’t particularly
helpful. Those predictions have, generally speaking, been wrong in the past. I
think you need to look at it in a much more nuanced way. It’ll be less about
whole jobs going; it’ll be more about the nature of the tasks changing.
I’m old enough to have
seen it happen before, this kind of idea, “Will the robots take our jobs away,
and in 20 years’ time inevitably half the population will be unemployed?” I
think that’s absolute nonsense, but we do need to understand the way in which
technology may impact, and the critical thing here is about choices.
What I slightly worry
about at the moment is that in our breathless talk about robotics and AI
[artificial intelligence], we lapse into a kind of technological determinism
that says that human beings must do whatever the robots and the AI makes
possible. I want to say, “No, let’s start from the notions of good work and
good lives, and then see how this amazing stuff can enable [us] to take the
drudgery out of work, but leave the stuff that’s really interesting.”
How can it make public
services much more efficient so we can improve people’s quality of education
and healthcare? We’ve had a lot of conversations at the RSA, and they’ve
started about numbers and technology and its possibilities. They nearly always
end up, within an hour, with people talking about politics and talking about
choices.
James Manyika: What do you think are some of
the most important choices that we as a society will have to make about these
questions?
Matthew Taylor: I think we need to make
choices about what we invest in. It is a very big argument, of course, but I
think we tend to underplay the role that government has historically played in
technological innovation. I think we need public–private partnerships, and I
think government plays an important role in issuing and supporting challenges
to entrepreneurs and innovators about the kinds of problems we should be
solving: green energy, or more efficient forms of care, or better types of
healthcare.
I think there’s
something there about human dignity and saying that whatever we do with
machines, we don’t want to get to a stage where human beings are slaves to
machines.
I think we have to
worry about market power. I know that often the people who run these firms,
they’re young and they’re funky and they give lots of money to charity, and
they seem well meaning. But let’s go back to what we know about what happens to
monopolies in the end. This technology needs to be available to lots of
organizations, lots of people. It doesn’t need to be hoarded by a small number
of extremely rich corporations.
James Manyika: When you think about that
question of power, do you think it’s the same questions about power that we
worried about, say, 100 years ago? You’d worry about it translating into
pricing, for example. But arguably, in this case, that may not be the question.
Matthew Taylor: I agree with you. I think
that some of the critique, the things we would worry about monopolies in the
past don’t apply in the same way as they do now, but I think there are new
things. So, 100 years ago people were worried about price gouging. Now they’re
worried about personal information; they’re worried about intrusiveness. We’ve
never had corporations that know so much about us. I think we need a
conversation about corporate power in the modern world. Not one that is
antagonistic to any individual company, but one that asks deep questions about
what we should be concerned about.
James Manyika: I certainly think a lot
about—when we think about questions of what AI and machine learning and these
technologies do—and worry about, things like bias, for example. Quite often
there’s inherent bias in some of that data. And so you’ll then amplify what
maybe have been historically human biases into these algorithmic biases, and
that has enormous scale effect.
Matthew Taylor: I’d also talk about the power
of these corporations to hold nations to ransom, because they are so powerful;
they are more powerful than nations. I don’t think it’s healthy when
democratically elected politicians feel that they can’t really stand up to
corporations at a national level, or even at a European level.
I would also worry
about wealth. I would worry about the amount of money these corporations have
salted away. I would make a prediction that if we had another global economic
downturn, the public’s attitude would be, “We’re having your money.” I think
these corporations need to think about whether, if the world was suffering
again, the amount of money they’re sitting on would be tolerable to people.
McKinsey Global Institute February 2018
https://www.mckinsey.com/global-themes/future-of-organizations-and-work/how-do-we-create-meaningful-work-in-an-age-of-automation?cid=podcast-eml-alt-mgi-mgi-oth-1803&hlkid=208b1e40c4f947fd81a37fca6a2ec7ee&hctky=1627601&hdpid=1617887b-ee0a-4cf2-8f75-d9bc57af76c3
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