From the TUC

What does the future hold for the world of work?

22 Jun 2012, by in International, Labour market

Consultant think-tank McKinsey Global Institute has issued a report on the future of work. Looking at current trends (what they call the ‘momentum model’) they predict that by 2030, there will be 3.5 billion people at work. They predict that by 2020, the world of work will face skill shortages in the STEM sectors of science, technology, engineering and maths as well as more unskilled workers than unskilled jobs: about 90 to 95 million of them, adding to the already record-breaking post-crash levels of global unemployment.

It’s obviously difficult to make accurate predictions – especially about the future – but they’re unlikely to be far out about the direction of travel. And they’re also right that, if we carry on as we are, these trends will lead to greater inequality (which is widely acknowledged, not just by unions, to be a huge drag on growth) and major social tensions. So the key question MGI pose to governments, employers and unions is: what are we going to do about huge global skill shortages and unemployment? One important point to make is that the trends MGI identify are based on what’s already being done: increased investment in education globally to meet the Millennium Development Goals, and existing commitments on open markets, infrastructure investments and the like. Some of these could be expanded or accelerated, but MGI are clearly right that more, and new ideas are needed.

First, although McKinsey stress the need for state education systems to increase the quality and quantity of skilled and educated new workers (MGI estimates we need up to 40 million more workers with tertiary qualifications and 45 million more workers in developing economies with secondary education – all on top of current upward trends), they do not trespass into what employers need to do. Clearly there needs to be a major boost to apprenticeships, lifelong learning and so on in the workplace, as the B20 and L20 have agreed in the context of the G20 employment ministers and leaders’ summits in Mexico.

Second, the need for better qualified workers means that the world will need a lot more qualified teachers – something MGI acknowledges. Recent assessments of the work DFID has done to get more children into school in East Africa has demonstrated that simply getting kids into school is not enough – we need to give them the quality education that more and better trained teachers can deliver.

But, third, we really do need those kids in school if we’re going to meet that 45 million extra secondary school leavers MGI say we need. That means a concerted drive not just to make sure that school places are available with teachers in place. It means we need to end child labour. And it means we need to end child labour in India in particular, where it is a major problem and where the need for skilled labour is increasing rapidly. The MGI research demonstrates that ending child labour is not just a moral obligation, but a vital economic development too.

Fourth, although MGI rather predictably propose that regulations on business, and especially business start-ups, need to be reformed, they do also have something interesting to say about what they call the need to “marketise” (doncha just love management consultants?) child-care, eldercare and care for the disabled, so that existing informal and unpaid home care becomes waged work. In the 1970s, this would have been a radical feminist demand, so when a global management consultant proposes the same thing, we ought to take notice! In fact, of course, it goes with the grain of social developments, but MGI are clearly right that more people caring for the sick, the old and the young should be paid, should be trained, and should be regulated. I’m sure MGI and the TUC would disagree on the wage rates and whether these services should be in the public or private sector, but the direction of travel, again, is surely right.

Finally though, MGI miss one other crucial element of the agenda we need. They do identify the problem of increasing disparities of income, and the effect this has. But they put forward little in the way of solutions beyond the supply side solution of more education and training. The TUC, like OECD Secretary General Angel Gurria,would recommend increased wages and a more progressive tax and benefits system to address the problem of growing inequality. And, although Mr Gurria hasn’t gone this far yet, we would suggest greater collective bargaining and freedom of association would be an essential part of the labour market the world needs now and in the future.