It’s an approach echoed in a recent report from the Information Technology and Innovation Foundation think tank. It argues that AI-based technologies will provide a tremendous boost to society and their development should not therefore be slowed down to protect a relatively small number of workers. Instead, much more should be done to help those people adapt.
Indeed, more proactive policies to this effect will also have the added advantage of reducing any backlash against the new technologies, and of course temptation among policy makers to restrict them.
The report revolves around three core principles:
- Technological change should be embraced – Throughout human history, progress has been driven by technology-driven innovation. The improvements in productivity these new technologies give us better standards of living, so must be embraced, even in the face of those who want technological development slowed.
- Support a full-employment economy – The change outlined above will disrupt the labor market, but any disruption will be mitigated if countries adopt a monetary policy that aims for full employment, supports industrial development and supports economic development in lagging regions.
- Help dislocated workers transition successfully – It will be remarkably tempting to lavish displaced workers with generous benefits for the duration of their unemployment, or indeed restrict the ability of firms to lay-off workers in the first place. The report urges caution with such policies and suggests they will limit growth and harm the people they’re designed to help.
So, instead of things like Universal Basic Income, the authors advocate a system of ‘flexicurity’. It’s a concept that is already well developed in Scandinavia and aims not to shield workers from risk via high welfare payments or legislation to protect jobs, but to rather minimize the number at risk and help those that are affected to get back on their feet.
As well as Scandinavia, such a policy is popular in Singapore, and the report highlights the country’s Skills Future program as an exemplar to follow. It shows the strong commitment to skill development in the country, with existing efforts strongly linked to employers and markets. The project is also designed to be as flexible as possible and takes full advantage of the latest technology.
This kind of project cannot thrive via incremental changes however. Instead, the authors urge policy makers to undergo significant institutional reform.
Ensuring full employment
To ensure this happens, the authors provide a number of recommendations for each of the four areas. For instance, to help ensure full employment, they recommend policy makers:
- Commit to running a full-employment economy.
- Expand funding for the Economic Development Administration (EDA) to support a modest number of targeted regional “growth poles.”
- Support programs focused on industry and firm competitiveness, including the National Institute of Standards and Technology’s Manufacturing Extension Partnership and the Export-Import Bank.
Supporting skills development before people are laid-off
- Push high schools to teach skills more relevant to the job market.
- Establish federal programs to help separate learning from higher-education credentialing.
- Encourage the creation of new kinds of technical colleges.
- Reduce funding inequality between four-year colleges and community colleges.
- Enable students taking short-term courses for occupational credentials to qualify for Pell grants and other federal aid.
- Expand the National Science Foundation’s Advanced Technological Education Program.
- Boost information and communication technology skills, including through federal incentives for universities to expand computer science programs.
- Establish a knowledge tax credit that would allow firms to take a tax credit for expenditures on both research and development and workforce training.
- Expand Section 127 tax benefits for employer-provided tuition assistance.
- Establish wider use of skills credentialing.
- Support industry-led, sector-wide training and development plans.
- Promote an “Investors in People” program for companies.
- Establish a dedicated funding stream for industry-led regional skills alliances, such as through the Investments in CTE Community College to Career Fund Act.
- Support apprenticeship programs.
- Better target federal higher education funding to institutions that serve large numbers of low-income students in high-demand fields.
Cushion the blow for those who are laid-off
- Establish a stronger federal floor under state unemployment insurance systems by increasing the federal unemployment tax act (FUTA) rate.
- Institute wage insurance for workers who lose their jobs through no fault of their own.
- Expand the Trade Adjustment Assistance (TAA) program into a comprehensive Trade, Technology, and Policy Adjustment Assistance Act (TTPAA), to help all workers displaced by trade, technology, or government policy decisions.
Support the transition back into work
- Provide incentives for employers to pay into Job Security Councils.
- Support existing job-search assistance programs.
- Establish portable training accounts.
- Engage the private sector to run and operate online re-employment web portals.
- Better enable workers to receive unemployment insurance while they are in training by instituting stronger requirements on states.
It’s an interesting report and whilst I broadly agree with the notion that it is detrimental to try and half the march of technology, and we should therefore do more to help people adapt, it does nonetheless have a ‘wonkiness’ to it that is common in think-tank circles. My fear is that the proposals outlined are far too complex and therefore very unlikely to be implemented. It does also make what is nothing if not a very complex topic sound very easy to fix. Nonetheless, it’s an interesting addition to the debate.