At 12 noon today, the 116th United States Congress will convene.
This changing-of-the-guard marks a historic opportunity to bring the policy debate related to healthcare, retirement, education, income stability and taxation into the 21st Century and acknowledge radical changes in the way we work.
And that doesn’t even include paid family leave, on which I’ve shared my views in the past.
Much has been written about “the future of work,” but two trends that will require some type of public policy response include:
Workers are no longer always full-time employees
Work today is less stable and doesn’t necessarily mean 9-to-5, 40 hours a week with benefits over an entire career. Increasingly, the workforce includes a combination of full-time, on-demand, and contract-based talent.* For some, this on-demand work is the main source of income, while for others it’s a side hustle to supplement wages from a primary job.
Work is increasingly not being done by a person
This is the biggest and potentially most transformative trend that, sadly, gets little if any real focus in the current public policy debate. In a recent MIT Technology Review article, venture capitalist Kai-Fu Lee laid out the stark truth about the race for dominance in Artificial Intelligence between China and the U.S. and what it will mean for workers. He states, “It will soon be obvious (approximately 10 to 15 years) that half of the job tasks (both blue and white collar) can be done better at almost no cost by artificial intelligence and robots. This will be the fastest transition humankind has experienced and we’re not ready for it.”
Clearly, it’s not going to be your grandfather’s, or even your mother’s, workplace in the not too distant future. So how might public policy need to catch up? In the following ways:
Changes in Medicare, Medicaid and the Affordable Care Act need to account for the reality that employers may no longer be the source of healthcare coverage for an increasing number of workers. It means, for many, these government-sponsored healthcare programs are no longer “entitlements” but the only way they can access coverage.
Like healthcare, employers can no longer be seen as the primary source of retirement planning. According to a recent Boston College study, Millennials participate in employee-sponsored retirement plans at a much lower rate than previous generations. Five states have begun to experiment with automatic government-sponsored retirement saving plans, but any debate over the reform of Social Security must acknowledge the role that federal or state governments may have to play to ensure retirement security as work transforms.
If in 10-15 years, most, if not all, basic repetitive work tasks are automated, we will not only have to retrain displaced workers but also revamp the education system to prepare the next generation to succeed in the new reality of work. For example, Jack Ma, the founder of Alibaba, recently spoke at the World Economic Forum where he noted the way we have taught children for 200 years may no longer be relevant. “We can’t teach our kids to compete with machines because they will be smarter,” he said, adding the focus should be on teaching “things that are different than machines” such as teamwork, independent thinking, and care for others by emphasizing music, art and sports.
Reimagining Income Stability
Some government-sponsored source of income stability may be required to manage through the transition. There are even Republicans like Glenn Hubbard, who is currently the Dean of the Columbia Business School and former Chairman of the Council of Economic Advisors, that believe the government is going to have to play some role in providing wage support to those affected by the transformation of work. Hubbard’s ideas include making the earned income tax credit “more generous for childless workers” and providing greater access to apprenticeships. Others have talked about a Universal Basic Income, which would be a direct payment, or a Social Investment Stipend, to pay people who provide care work, community service or education.
How then to pay for all of the above? The U.S. currently operates at historically high budget deficits. Again, even a traditional conservative, like Dean Glenn Hubbard, has acknowledged that the “Government can be deployed in service of prosperity, wage subsidies and direct support for training,” but, he adds “Personal unemployment accounts would require a government role, and frankly, more taxes.” However, there’s a twist to the tax debate that needs to be considered as well. Unlike in the past, it is much easier for high net worth individuals who feel overtaxed in one state to move and remote work from a state with a lower tax rate. High earners are no longer as bound by geographic location as they were in the past.
Work will continue to transform. It just will. As it does, the role government must play to reimagine healthcare, retirement, education, income stability and taxation will take on even greater urgency. The country will be best served by members of Congress who recognize these challenges, frame the debate accordingly, and lead across both sides of the aisle to embrace 21st century solutions.
#BigIdeas2019 #futureofwork #AI #publicpolicy
*In a recent survey of human resource leaders conducted by Spherion Staffing Services, the average percentage of contingent workers in the workplace rose from 15 percent in 2017 to 29 percent in 2018. Other studies have found that 35 percent of the U.S. workforce is made up of freelancers or contractors, a number that could rise to 43 percent by 2020.