Working it Out: The World of Work Transformed

Speech by Tom Watson MP to the Cooperative Party Economy Conference (January 28th, 2017)

Hello. Thank you so much for having me. I’m here to talk to you about the future. I just turned 50.

I can’t tell you how pleased – how amazed – I am to have made it this far. To have lived through this last half century of unimaginable technological change.  

Those of you who know me know that I’m a nerd. I was the first MP to blog. I was the first Minister for Digital Engagement. My point is – I’m instinctively positive about technology. So I’m not scared of the future.

Robots, artificial intelligence, big data. We’re on the brink of a new industrial revolution and I honestly can’t wait to see it unfold. I can’t wait to see what we humans invent next.

That’s why I set up the Future of Work Commission. To bring together experts – business people, economists, moral philosophers, specialists like your own general secretary, Claire McCarthy, who I’m so pleased is joining us on the Commission – to analyse and understand these huge technological changes.

To understand how they are going to change the world of work. To talk about how we maximise their enormous potential – in ways that benefit us all.

The advance of new technology is as fundamental to the future of our economy as globalisation was in the nineties and noughties.

Indeed, as President Trump turns away from globalisation, the new protectionism in American economic policy may lead not to new jobs for American workers, but new jobs for American robots – driving an even faster acceleration of automation.

Manufacturing might return to the USA, but if robots are cheaper than human workers, it could be that’s what US manufacturers will invest in. And Donald Trump’s voters might not like that.

The election of Donald Trump adds real uncertainty to global trading arrangements, against a backdrop of significantly increased economic nationalism. The basic assumptions that underpin current global policy, most importantly the assumption that free trade is good, and protectionism bad, are changing with Trump’s election - and with Brexit.

For the UK, it is imperative we keep an open mind about the Trump administration's economic policy and ambitions. Political and business leaders, and trade unions, need to ask themselves this: 

What if he does bring back the manufacturing jobs back to America?

What if the interests of the rustbelt workers, who had their lives turned upside down by cheap imports from China, are prioritised over the ideological beliefs of Davos habitués?

Conventional economic orthodoxy says that free trade benefits all countries, if not all workers in those countries. Yet is this really true? You can make a cogent case that the debt fueled growth of China has given Chinese corporations who receive forms of hidden state subsidies an unfair advantage in Western markets. Indeed Trump used the export of manufacturing jobs to China as a devastating political weapon.

Now those international trade agreements Donald Trump is ripping up with gusto have also been the focus of opposition by organised labour, and for good reason: they also prohibit states from protecting workers.

For the UK to ignore the early signs of a global reformation of international trading arrangements would be a mistake. For one, if there is to be a benefit to Brexit, many gains can be seen in domestic procurement. 

If Trump says buys American, our rational response is Buy British. Yet to say 'Buy British' these days risks sneering derision from much of Britain's commentariat and chattering classes, few of whom of been on a factory floor lately. When did you last hear Theresa May say it? 

It is an age old bugbear of many politicians that the UK's strict adherence to EU procurement rules is observed more keenly in London than in Rome and Paris. That era is about to end. The opportunities in public sector procurement to purchase British made goods and services are significant.

There has been a massive contraction of the UK manufacturing sector – from around 28% of gross value added in 1978 to less than 10% today. 

And as the economist Robert Skidelsky pointed out last year, our economy has not seen the full benefits of a falling pound for exports because many of our manufactured goods rely on imported materials – so when sterling depreciates and import prices rise, the knock on effect on our exported goods is lost because they become less competitive. Recent OECD data shows the import content of UK manufactured goods is significantly higher than those made in the US and Japan.  

The effect of this is that we are arguably still too dependent on the City of London - particularly at a time when a number of banks are apparently planning post-Brexit moves to Frankfurt. 

What could all this mean for UK economic strategy? 

As Skidelsky says “Only rapid government action to substitute goods currently imported with domestically produced goods will do the trick". 

The national investment bank which the Labour Party advocates could be given a mandate to invest in industries with a high import substitution potential. The economists will still argue about this, but if you want a Brexit bounce for Britain's manufacturers this is not a bad starting point. 

I’ve talked about Brexit and the challenges it presents. But I am also hear to talk about how technology will change the world of work. So let me return to that subject. Any politician, anywhere in the world, who doesn’t try to understand the scale of the changes to come, who doesn’t make informed political choices as a result, is taking a big risk.

And for Labour – a party created to give working people a voice in Parliament – failing to consider the consequences for working people of these seismic technological shifts would be outright negligence.

I’m excited about some of those consequences. The Future of Work Commission has already heard some inspirational testimony.

  • About how technology could augment what we do, enable us to work smarter, not harder.
  • About how it can give even the tiniest business global reach. Run our public services better.
  • About how one day it might improve productivity, make our society wealthier, create jobs.

And that’s alongside everything we already know about its potential to improve medical diagnosis, democratise access to education, to justice.

It’s deep human progress. It’s the absolute stuff of utopia. We have of course also talked – and we will continue to talk – about the challenges thrown up by these advances. Bank of America has said automated systems will be carrying out nearly half of all manufacturing jobs within a generation. Consultancy firm Deloitte says that 35% of UK jobs have an element that could be automated.

And that’s jobs all across the spectrum. Jerry Kaplan says that automation is “blind to the colour of your collar” – professionals like architects and lawyers are at much at risk of redundancy by algorithms as factory workers are from production line robots.

But one thing the Commission’s work has made very clear to me is that it’s not just tomorrow we should be thinking about. It’s that comparatively simple forms of tech are transforming the way we live – and work – today. And not all of those changes are good.

They are opening up the way for exploitation of workers in ways not seen since the last industrial revolution. Enabling intrusions into privacy, losses of freedom that wouldn’t look out of place in 1984. They are changes that mean more enlightened uses of technology may never happen in the workplace, because we are making it cheaper to exploit people instead.

Last week the Commission heard evidence about the logistics sector. In people terms – parcel packers and delivery drivers. This sector has been revolutionised by technology. Businesses like Amazon, Deliveroo, UberEats operate on a model that simply wasn’t possible ten years ago.

Technology has brought coherence to global supply chains, allowed us to close the gap between producers and consumers. It’s enabled reliable online ordering and tracking. And the sector has exploded as a result.

It employs 2 million people. It’s worth £55 billion to the economy. It’s 5% of GDP. That’s the upside. 

But it is a sector that is using unregulated technology to wring the very last drop of productivity out of workers. To increase the pace people work at to ever higher levels of intensity. And to carry out intrusive workplace surveillance on a mind boggling scale.

Hell of a downside, isn’t it?

Warehouse workers required to wear watch scanners that track their every move, so managers know where they are at all times. Similar tracking technology monitors drivers’ vans.

We heard of packers disciplined for spending longer in the loo than the computer says is necessary. Drivers questioned about taking 30 seconds too long on a particular doorstep. They have targets to meet, you see. Targets decided by computers. Devices are deciding how much effort people should be putting in.

People have tried to do it in the past, with the old time and motion studies. But technology allows for the measurement and extraction of every bit of effort in a way that just hasn’t been possible before.

At the same time, drivers’ ability to make meaningful choices about how to do their jobs, like being able to decide their own route – the very things that give them job satisfaction and any sense of achievement at work – are being stripped away.

Because computers are more efficient. And that drives down costs.

It’s the pursuit of hyper-efficiency, it’s the prioritisation of profit at the expense of any sort of job quality. Workers seen as expendable commodities – in a way that would have been familiar 150 years ago, before any of the modern workers’ rights and protections were enacted.

It’s shocking.

We should be working towards a bright future. Instead we’re burrowing back to the basest bits of the past – but with a dystopian, cyberpunk twist. Two million people work in the logistics industry alone. We are removing the autonomy of vast numbers of humans, and putting computers – not even very clever computers – in charge instead.

I remain a tech enthusiast. Because the most important thing about technology is how people chose to use it – whether for virtue or for vice.

Monitoring technology is used in the haulage industry to enforce legislation that stops lorry drivers driving for hours without a break. To uphold safety standards. To protect workers and their communities.

I stand by what I said – I’m not scared of the future.

What I am scared of is people – governments – who waste its promise, who allow it to be used for ill, by doing nothing.

As a politician of the social democratic left, I've never believed that we should just stand by and watch the world change. I believe that government has both a democratic right and a democratic duty to shape it.

If technology shifts the balance of power between employer and employee, it’s our job to shift it back. Labour’s belief in the empowering state can harness the capacity of technology to transform lives for the better.

And the wider Labour movement has a role to play too.

The people I’ve talked about today are part of the massed army of precarious labour living from short-term contract to short-term contract, juggling jobs with uncertain hours, for uneven and irregular pay and with no workplace rights.

Just this week Dispatches revealed the scandal of garment workers in the East Midlands being paid as little as £3 an hour.

Researchers at Leicester University, who gave evidence to our Commission last week, estimate that in total, clothing manufacturing workers in the East Midlands are being underpaid to the tune of £1 million a week – that’s £50 million a year in lost wages.

We need to give a voice back to workers like these.

They desperately need unions. And yet trade union membership is well below its peak. In fact it has stagnated over the last decade. The proportion of private sector employees in unions has continued to fall, even as employment rises.

Fewer than one in 10 of the lowest paid workers are union members – and millions of young people entering the workplace have never been in a union. They’ve never even *thought* of being in a union. And as non-unionised millennials enter the workplace and unionised baby boomers retire – union membership looks set to continue its long, slow decline.

That decline is predictable, but it's not inevitable. Unions urgently need to prove their relevance. They need to remake the argument for their existence to a new generation. They need to prove that the best way for exploited workers to redress the balance with their employers is through collective action. They need to demonstrate their power to protect and support.

But in different ways to the ones that worked in the past.

When I was elected Labour's Deputy Leader I said that if I was setting up a union today it would be the Union of Web Workers –organising the interests of information workers who use screens and keyboards as the tools of their trade.

But it's not just information workers who use digital technology in their daily lives – and unions need to reflect that.

If people are living their lives online, that’s where unions need to be. Just as technology is changing work, technology can change the way workers organise. Online platforms and petitions can let them share information more easily.

They can swap shifts and arrange cover – and they can also recruit and build support for campaigns. It's outrageous that the government is still resisting e-balloting for trade unions - the biggest single measure to increase turnout among union members.

If it's good enough for the Conservative Party's internal elections, it's good enough for working people. Some unions ARE responding to the way work is changing.

The GMB brought and won its case on behalf of Uber drivers, to give them basic workers' rights. A neat practical demonstration of the value of what the left can offer the new generation of service workers.

Bectu works with self-employed and freelance broadcast technicians to set the going rate for freelance jobs, to set minimum standards and to stop undercutting. And the Musicians' Union has helped to set up music teacher co-ops to help teachers market their services to schools and ensure that everyone gets fair pay and conditions.

But we need more. We need unions to up their game. The workforce needs them to up their game.

John McDonnell called last year for the reintroduction of sectoral collective bargaining. I support that call.

Especially for low-paid sectors that are harder to organise and where work is more insecure, where the case for modern wage councils is stronger than ever before.

And we need co-ops.

I’m sure you’re used to politicians coming here and extolling the virtues of your values. I want to do more than that. I want to put them into practice. I’ve seen how co-ops and the practical application of co-operative principles can help ameliorate some of the challenges thrown up by the modern working world.

I mentioned the great work the Musicians’ Union has done in Swindon. How a group of music teachers made redundant and forced into self-employment, were empowered by the formation of a co-op. By banding together, they addressed problems from back office support to vulnerability to exploitation. We need more of that.

John McDonnell promised last year to double the size of the co-operative sector – today I’m committing to deliver on this pledge within the DCMS remit that I shadow. I want to work with you on ways to do that.

From football supporter trusts to community owned pubs and music venues, to helping develop a trade union offer for the mushrooming freelance sector – I want to know what you think, where I can help, how the next Labour government can deliver co-operative values.

I don’t want this to be a one-off speech – I want it to be the start of a long collaboration.

The values we share – of businesses driven by the long term interests of their workforces and communities, not just the short-term interests of a few private shareholders; of ownership dispersed and democratised and rewards fairly shared – can be at the heart of Labour’s response to new technology.

Together we can harness the power of the enabling state, and the power of collective action, so that people can stand up to abuse and exploitation in the workplace.

We can make sure that machines are used in the interests of workers, not as a tool to control workers.

We can stop the extreme commodification of labour – to stop people being treated as machines.

Work is part of what gives our lives meaning. It has a value beyond its ability to generate wages.

We can use technology to extract meaning from work and to extract profit from workers, or we can use it to add value to our work and meaning to our lives.

These are political choices. They are the choices that will define the next half-century. They are the choices that will define us as politicians. Let’s work together to make sure we get them right.

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