This blog post is an excerpt from the Future of Work Initiative’s report Automation and a Changing Economy, released April 2019. The report is divided into two parts. Part I: The Case for Action, explores the impacts and history of automation, why this time may be different, and why action must be taken to maximize opportunity, minimize disruption, and ensure that the gains of automation are broadly shared. Part II: Policies for Shared Prosperity proposes 22 policy solutions to ensure that our increasingly automated economy is also one that promotes greater opportunity and broadly shared prosperity for all. Throughout the year, the Future of Work Initiative will republish many of these policy solutions.
While technological progress should be encouraged, there are many different paths that technology can take. A recent report from the United Nations’ International Labour Organization observes, “Technology can free workers from arduous labour; from dirt, drudgery, danger and deprivation. Collaborative robots, or cobots, can reduce work-related stress and potential injuries. But technology-driven processes can also render labour superfluous, ultimately alienating workers and stunting their development.” Each could be considered “progress,” but their implications for workers, families, communities, and society overall are quite different.
As businesses automate work, they must decide how their workforce needs will change, including whether and which workers might be laid off, or whether retraining and redeployment is possible. These decisions can have broad impacts, as layoffs can affect entire communities and regions. Business decisions that involve retraining and redeploying workers can leave all stakeholders better off. Layoffs cannot always be avoided, but transition planning should include as many stakeholders as possible to mitigate negative impacts and to find mutually beneficial solutions.
Including workers as stakeholders can be more profitable to businesses. For example, economists Susan Helper, Raphael Martins, and Robert Seamans found that as factories in the automotive industry increasingly rely on the use of robots, sensors, artificial intelligence (AI), and other digitally-enabled technologies (often called “Industry 4.0”), they are at risk of having their value, and thus their profits, captured by “digital entrants,” such as data analytics firms. Instead, they can choose an automation strategy that highlights their unique advantage: their physical proximity and hands-on involvement in the production process. By adopting automation methods that marry data, automation, and worker insights, they can better protect and build on their firm’s value proposition. This approach requires systematic engagement between workers and managers on the question of how to implement automation technology. Unfortunately, American factories, unlike their Japanese and German counterparts, are not set up to facilitate this sort of inclusive engagement.
Employers should explore options to give workers greater voice in technological innovation and adoption. Workers need to be part of strategizing how to ensure automation decisions are made to benefit not only shareholders, but also workers and communities. Similarly, policymakers should encourage employers to give workers greater voice. Similar to the German “codetermination” model, the Future of Work Initiative has proposed the adoption of worker-elected work councils and worker representation on corporate boards. Recently, legislation was introduced in the U.S. Senate to require companies with over $1 billion in revenue to let workers elect 40 percent of their corporate board members. Similarly, policymakers should explore industry-level bargaining, which would help workers across businesses in a given industry band together to collectively bargain on a wide range of issues, including how businesses deploy technology and prepare their workforces for its impacts.
