Working the math: adding, dividing and multiplying on the labour market

15, August

 By Jochem de Boer* The end of May saw the return of the OECD Forum, the annual platform where civil society and ...

 By Jochem de Boer*

The end of May saw the return of the OECD Forum, the annual platform where civil society and government discuss global policy and economic issues. As is the custom every year, the Organisation for Economic Co-operation and Development presented its Economic Outlook – the culmination of the extensive analysis work that it undertakes. In tribute to the mathematics that underpins the OECD work, I have made some calculations of my own.

The labour market bottom-line resulting from the analysis of the Organisation for Economic Co-operation and Development (OECD) figures depicts a negative trend. It is time to take control of the variables with leadership and partnership to bridge the growing divisions in society and labour markets.

Summing up

The equation starts with the 2019 Economic Outlook. This paints a grim picture of falling trade and welfare growth that is still not picking up to align with the high employment rates. Bad debt is once again on the rise, manufacturing is dropping, and China’s economy is on a sharp slowdown. In the bleakest of scenarios all of this could result in a global recession. Still, all of this is self-inflicted. Trade wars and policy uncertainty are driving the decrease across the world.

Adding to this is the 2019 Employment Outlook. It shows that regardless of record high employment numbers, many people are still left behind. Vast contingents of women still do not find their way into work, and those who do are often unequally remunerated. Young people lacking a tertiary degree are stuck in the parts of the labour market that are under serious threat of automation, while missing out on learning opportunities. Also, those that need public support the most in terms of skilling opportunities and social security, lack adequate access to it. And finally, the business case for delivering skilling and support is based on a labour market that doesn’t exist anymore.

The last element of the sum is the policy responses provided to all these challenges by the OECD countries, as reflected in the “Policy Responses to New Forms of Work” report released in March 2019. This report showcases the concerns and responses of national governments to labour market trends and, in a nutshell, tells us that policy makers are first and foremost concerned about ‘self-employment’ and ‘platforms’. Yet, if one looks at their actual policies, one sees that the regulatory changes are far removed from the ‘gig’ platforms which indeed often work with self-employed contractors. Quite the opposite: the regulatory focus is on the employment relation. Through a vast variety of measures, policy makers actually reduce options to employ staff on a temporary or variable basis.

Sadly, when it comes to addressing the key challenges – securing access to lifelong learning and providing useful safety nets to all workers – policy makers stay silent; or as the OECD puts it: “[…] most adult training systems are ill equipped for this challenge. Participation in training varies widely, but what is common across all OECD countries is that those who need training the most, train the least […]”. Maybe policymakers hope that the permanent contract will bridge the skills gap and fix social security – a classic confusion of correlation and causality. In doing so, they kick the can down the road and contribute to a polarising labour market in which the open-ended contract is the only door to training and support. At the same time, global uncertainty and a volatile economy are making this door ever-further out of reach.

In short, the economic dynamic is trending down.  Growing groups of underrepresented and vulnerable people miss the boat, and policy makers try to solve this by squeezing workers into a labour market that no longer exists. This is an accident waiting to happen. As the economy slows down further, personal and national budgets will be strained in an attempt to soften the impact of displacement. Employers with vacancies, as well as those that need to adjust, are confronted with a high cost of change. Finally, with the skilling update not happening, the business case for workplace automation grows even more attractive – thereby worsening chances for those lacking the right skills.

Dividing up

So, what’s behind this ticking time bomb that we have wound ourselves? It is the divisions we see all around us. We see regions of the world building walls between them, not just physical, but digital as well. A ‘ Splinternet’ with different rules for access, privacy, data use and ownership is increasingly apparent. People divide themselves up and retract into respective on- and offline echo-chambers. Those that have the skills and incomes are getting farther ahead of those who do not. Finally, we see social partners divided on the very thing that provides income, self-esteem, belonging and, last but least, emancipation from poverty and informality: work. All this results in ever divided politics and parliaments that are being punished for compromising and taking decisions.

Multiplying

We need to move from dividing to multiplying. This requires leaders on all sides to build bridges to the other side. The urgency is too great and the problems too large for navel gazing and self-congratulatory wallowing. Instead, we need leaders that listen to others’ solutions to common challenges and respect the other sides of the argument; a leadership that challenges its position and reflects on itself as much as on others.

*Global public affairs manager at the World Employment Confederation

About WEC

The World Employment Confederation is the voice of the employment industry at global level, representing labour market enablers in 50 countries and 7 of the largest international workforce solutions companies. The World Employment Confederation brings unique access to and engagement with international policymakers (ILO, OECD, World Bank, IMF, IOM, EU) and stakeholders (trade unions, academic world, think tanks, NGOs). Its main objectives are twofold: to help its members conduct their businesses in a legal and regulatory environment that is positive and supportive; to gain recognition for the positive contribution the industry brings to better functioning labour markets.

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