DOING BUSINESS IN THE EU


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Future Shock: Half of the world population unemployed in 25 years #Labour Law

What will the reality be if 50% of the word population is unemployed but are still earning a salary?

The issue of a basis income for people that became obsolete in the workforce are increasingly discussed by labour market specialists.

The Artificial intelligence (AI) revolution will have a profound effect on our lives within the next three to five years, and it will totally change the labour market as we know it within 25 years.

Moshe Vardi  a professor in computer technology recently told the American Association for the Advancement of Science (AAAS) that he predicts that robots will take over half of the jobs in the future.

According to Bart Selman, professor of computer science at Cornell University, the developments of the last five years will have the effect that robots will now for the first time become part of everyday life. Computers will have the ability to see and hear as humans do and to synthesize data and implement strategies for achieving their goals.

Vardi expects that the growing presence of intelligent machines in the workforce will contribute to a phenomenon called “job polarization”.  Job polarization will take place in the labour market where robots cannot replace the low level workforce because it is going to be too expensive and cannot replace jobs where a high level of intelligence is needed. With job polarization only a small amount of people are working at the unskilled and the highly skilled continuum, in contrast the big middle sector is unemployed.

The labour market of the future

We will redefine the term unemployed in the future. Whether a person receives an income will not be part of the definition of what it means to be unemployed. Governments will insure with new types of taxes that the unemployed will be compensated for the job loss. The unemployed will receive a basis income from the government.

If the pending restructuring of the labour market is not managed with care it will lead to great inequality in the lives of the normal citizen. Work in the capitalist system was always seen as a way to enhance the financial level and self-sufficiency of an individual. If the big middle class is excluded from the labour marker it will lead to a polarization of the socio-economic state of citizens. We all can think of instances in the history where great differentiation in the social and economic status of people led to unrest.

The solution may be to make the basis income high enough to limit the discrepancy of the economic status of citizens or to limit (income control) the salaries of the employed. Both solutions will lead to the dissatisfaction of the people that actually are required to work.

What is basic income?

An Unconditional Basic Income (UBI) is an income unconditionally granted to all members of a political community on an individual basis, without means test or work requirement. Unlike existing minimum income schemes in European countries, UBI is universal, individual, unconditional, and high enough to ensure an existence in dignity and participation in society. AI revolution will not only change the labour market but will also have a devastating effect on the psychological health of individuals and communities.

High enough: The amount should provide for a decent standard of living, which meets society’s social and cultural standards in the country concerned. It should prevent material poverty and provide the opportunity to participate in society and to live in dignity.

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The socio-economic sphere

Since the the agricultural revolution more than 10,000 years ago, human survival has been linked to work. With the loss of jobs it is going to be a whole new ball game. It seems that the issue won’t be a lack of profit or capital but that workers will not be needed to generate profit.

The basis income principle is seen as an option to compensate and manage the unemployed effected by the AI revolution. Basis income will provide a descent standard of living for the affected group, which meets society’s social and cultural standards in the country concerned. It should prevent material poverty and provide the opportunity to participate in society and to live in dignity.

Read here more about the lost group in the Netherlands what are already in the benefits trap.

The effect of unemployment on the society

Unemployment affects not just the person himself but also his/her family and in the long run the society where he or she lives.

Unemployment brings with it despair, unhappiness and anguish. It forces people to live their lives in a way they do not wish to.

  1. Mental health:  Low self-confidence, feeling unworthy, depression and hopelessness. With the loss of a career and the frustration involved in it, the unemployed may feel that all sense of purpose is lost.
  2. Health: The purposelessness of the unemployment may lead overall tension and it increase dramatically the general health issues of individuals.
  3. Tension at home: Family member are not going to work and are for extended time periods in each other company. Individuals misses the stimulation of relationships in the workplace. This may lead to quarrels and arguments at the home front which may lead to tension and increased numbers of divorces, domestic violence and substance abuse.
  4. Political issues: Loss of trust in the administration and the government which may lead to political instability.
  5. Discontent from the working class: Unemployment also leads to discontent and frustration of the tax paying citizens. In order to meet the demands of the unemployment fund the government may increase taxes giving way to restlessness amongst the tax paying citizens.
  6. Insecurity of the working class: The prevailing unemployment and the plight of the unemployed people and their families may create fear and insecurity even in the currently employed people.
  7. Crime and violence: Increase in the rate of crime.
  8. Suicide cases: Increase in the rate of suicide attempts and actual suicides as well.
  9. Standard of leaving: In times of unemployment the competition for jobs and the negotiation power of the individual job seeker decreases that will have the result that salaries packages are reduced.
  10. Employment gaps: To further complicate the situation the longer the individual is out of job the more difficult it becomes to find one. Employers find employment gasps as a negative aspect.
  11. Lose of skills’ usage: The unemployed is not able to put his/her skills to use. In in prolonged unemployment an individual may lose some of his/her skills. source

My opinion is that the following issues must be considered before basis income is seen as the only solution for the lost of jobs:

  • What is a descent standard of living?
    • People from different walks of life have a different perception of what is seen as a decent standard of living.
  • Is it morally right for the government to determine a decent level of living without any escape route for the individual? The majority of human beings is motivated by the fact that they can endeavour to improve their status and living standard. To be locked-in a certain socio-economic standard will dehumanise people,
  • Isn’t there more to life than be just to survive just above the poverty level,
  • To participate in society is a goal of basic income:
    •  How will the unemployed be purposefully engaged in the community if 50% of the society is unemployed and will never again be employed? Loitering, drug-and alcohol misuse will be rampant,
  • Work keep people busy and give the purpose,
  • A basis income is not sufficient to pay for the healthy and uplifting entertainment of the bored,
  • The middle group will be imprisoned in a small word with no prospects.

The disappearance of jobs may be the biggest event in the labour- and political arena since the agricultural revolution. We must start thinking very seriously: What will humans do when machines can do almost everything?  As Vardi put it “We have to redefine the meaning of good life without work”.

 

 

 

 

 

 

 

 

 

 

 

 

 

Andre Beukes LLM

Andre Beukes LLM

I am an International human resources consultant to multinational companies in international employment law and employee relations.

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