Economics for dummies - Part 4

( - and for economists and politicians)

Part 4   Labour +

The global labour market is looking for the cheapest workforce available.

Different rules of the game, however, exist in different countries ranging from labour unions in relatively few countries to clearcut usurpation of workers with wages below living conditions in most countries. Many places it is relevant to speak about modern slavery. Multinational companies use the opportunities given by global finance and weak or corrupt local governments to find cheap workers.

Trends regarding labour market in industrialized countries are:

·        High degree of unemployment in many countries especially for young people

·        Cheap workers, often from abroad, in the least attractive jobs

·        New jobs are often poorly paid service jobs

·        New types of manual or semi-manual jobs in the backyards of the technology giants

·        Fully digital global standardized small tasks market without predictability for the individual

·        Risk and responsibility are moved from company to individual

If jobs in the private sector of society are created, the economy and politicians see it as a positive contribution to GDP, no matter wages and working conditions. Local communities often compete for local jobs giving large companies considerable tax reductions and other special benefits if they locate their business in the community.

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So what jobs are needed in the future?

In the rich industrial countries, we are getting a society of abundance regarding goods and services (even if this abundance has not at all been distributed fairly). This abundance basically means fewer real needs for increasing production. The need for solving the climate crisis also means that consumption of goods should be reduced.

This altogether means that we will need fewer traditional jobs in industry, and the types of jobs needed there, will change. Robots and artificial intelligence will contribute further.

Artificial intelligence will also have consequences for jobs now mainly based on human specialist knowledge.

There will, however, be many jobs where personal contact still is needed.

Health, care, school, and local services will need more hands.

Primary sectors like agriculture, forestry and fishing should be changed in ways that take better care of climate and nature. This means that more people are needed in these sectors. 

Labour has an important social function both for the individual but also for the local society and for society at large. This is the case both for jobs in industry and small businesses and in the public sector, including health and schools.

We must focus on people and their needs, not traditional jobs. We must expand our understanding for what is meaningful and useful activity both for the individual and for society.

We again must go back to basics. If people have energy, time, and competence to contribute to the thrive of society, that means that society can afford to let them do so. That is good use of human resources. It is not necessary first to produce something that we do not really need for getting money available.

Again, going back to basics, we have more options for change in labour and society than the mainstream market economy tells us.

A labour market without proper regulations clearly leads to harmful consequences and reduced well-being for a lot of people. Regulations should both include higher minimum wages and better and safer working conditions. Extremely high wages, accompanied by other advantages, should also be limited.

Basic unconditional income should be introduced. This will lead to a better situation both for individuals and society such as:

·        Better support for gender equality

·        Less bureaucracy

·        Better self-esteem for weak groups

·        Better support for work of care

·        Better support for children

·        Better options for art and culture

All these advantages are important for better local communities and are better basis for households. Basic unconditional income, however, must be part of a more wholly plan regarding public welfare and taxes.

Market economy without any regulations lead to centralization and unequal distribution of living conditions. Planning, proper regulations, and other measures should balance these effects providing better economic basis for local communities.

Subsidies and other ways of economic support are measures already used in the economy to a relatively large extent, but most often for the wrong players and purposes.

Local cooperation and locally based services should be facilitated. Digital platforms can be made to support local services instead of the highly centralized platforms that dominates today.

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So far, we have focussed on industrial countries.

The situation for traditional developing countries is very different.

Some elements are:

·        Multinational companies using cheap workers for producing products that local people cannot afford to buy, and that produces few positive ripple effects

·        Guest workers with bad working conditions in richer countries

·        Large populations, often in rapidly growing cities, outside the official economy and social services

·        Large monocultural farms occupying available farming land

There is no quick fix for supporting developing countries. A starting point should be to stop ruining their basic living conditions by the rich industrialized countries contribution to the climate crisis.

Development and aid to developing countries has basically been seen as a matter of financial aid. Instead of only focussing on finance, we should bring things back «on the ground». Many of the components discussed above for a better society in rich industrialized countries should be considered.

Both industrial countries and developing countries should have better models for development. Developing countries cannot continue to use the outdated model for development that industrialized countries have used till now.