19.1 Technological change and its impact on work and social protection

Technological change is reshaping work and social protection. Automation and AI are transforming industries, leading to job losses and new employment models. Traditional social systems struggle to address these shifts, sparking debates on universal basic income and work redistribution.

Emerging trends include remote work, hybrid jobs, and emphasis on soft skills. New social protection concepts like portable benefits and skills insurance are being explored. Policymakers are considering universal basic income, job guarantees, and labor market reforms to address technological unemployment challenges.

Automation's Impact on Employment

Technological Unemployment and Job Transformation

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• Automation and artificial intelligence (AI) transform industries leading to significant changes in job nature and availability
• Technological unemployment describes job losses caused by technological change particularly human labor replacement with machines or AI systems
• Job categories involving routine, repetitive tasks face higher automation risk while complex problem-solving, creativity, and emotional intelligence jobs remain less susceptible
• Gig economy and platform-based work emerge as new employment models offering flexibility but often lacking traditional job security and benefits (Uber, TaskRabbit)
• Skill polarization occurs in the labor market increasing demand for high-skilled and low-skilled workers while middle-skilled jobs decline
• Technological change outpaces many workers' ability to adapt causing skills mismatches and potential long-term unemployment for some workforce segments
• Automation and AI eliminate jobs but also create new ones with net employment effect and job distribution across sectors and skill levels remaining debated

Emerging Employment Trends

• New job categories emerge in response to technological advancements (data scientists, AI ethicists)
• Remote work becomes more prevalent enabled by digital technologies and changing work culture
• Increased emphasis on soft skills and emotional intelligence in the workplace to complement AI capabilities
• Rise of hybrid jobs combining multiple skill sets (marketing technologist, user experience designer)
• Growing importance of digital literacy across all job sectors and levels
• Shift towards project-based work and short-term contracts in many industries
• Automation of managerial tasks leading to flatter organizational structures

Social Protection for Technological Unemployment

Inadequacies of Traditional Systems

• Traditional social protection systems designed for stable, long-term employment clash with current work reality
• Unemployment insurance systems inadequately address long-term technological unemployment or gig economy workers' needs
• Flexicurity combines labor market flexibility with strong social security explored as potential model for adapting social protection to new work forms
• Existing skills training and retraining programs insufficiently keep pace with rapid changes in technology and job requirements
• Benefits portability across jobs and employment statuses grows increasingly important as workers change jobs more frequently or engage in multiple work forms simultaneously
• Social protection systems funding mechanisms often based on payroll taxes need reconsideration due to changing employment patterns and non-traditional work arrangements rise
• Pension systems adequacy challenged by longer life expectancies, changing work patterns, and potential labor force reductions due to automation

Emerging Social Protection Concepts

• Universal Basic Services proposal suggests providing essential services (healthcare, education, housing) free of charge
• Portable benefits systems allow workers to accumulate and transfer benefits across multiple employers or gig economy platforms
• Skills insurance programs protect workers against skill obsolescence by funding retraining and upskilling
• Guaranteed minimum income schemes provide a safety net while maintaining work incentives
• Social impact bonds finance social programs with private investment repaid based on achieved outcomes
• Time banking systems allow individuals to exchange services based on time rather than money

Policy Responses to Technological Change

Universal Basic Income and Alternatives

• Universal Basic Income (UBI) provides all citizens with regular, unconditional sum of money regardless of employment status
• UBI proponents argue it provides safety net for technology-displaced workers supports entrepreneurship and reduces inequality while critics raise work disincentive and funding challenge concerns
• Negative Income Tax (NIT) offers income support phasing out as earned income increases potentially addressing some UBI criticisms
• Lifelong learning accounts or personal training accounts support continuous skill development and adaptation to technological changes
• Job guarantees explore government as employer of last resort as potential technological unemployment response
• Policies supporting new industry development and job creation in emerging sectors help offset automated industry job losses

Work Redistribution and Labor Market Policies

• Shorter work weeks or work-sharing arrangements distribute available work more evenly across the population
• Tax policies (robot taxes, capital gains tax changes) debated as means to fund social protection systems and potentially slow automation pace
• Strengthening collective bargaining rights and exploring new worker representation forms (gig economy workers) help ensure more equitable technological progress benefits sharing
• Apprenticeship programs expansion bridges skills gaps and facilitates smoother transitions into new industries
• Entrepreneurship support programs encourage innovation and job creation in response to technological disruption
• Labor market information systems improvement helps workers and policymakers better understand and respond to changing job market dynamics