Rethinking Public Policy in the Digital Era Sunil Johal @johalsunil CESBA – December 1, 2017
Agenda Key Trends Public Policy Implications Government Service Delivery & Employment Implications Questions & Discussion 1
Key Trends 2
Policies and programs that are integral to the well- being of Canadians remain intimately tied to conventional ideas of employment, despite a new economy that demands new approaches. 3
Longer-term trends • Unequal prosperity • Rise of precarious work • Declining unionization 4
Unequal Prosperity Income inequality continues to grow by all measures Canada’s top 1% of earners accounted for 37% of the country’s overall income growth between 1981 and 2010 5
Unequal Prosperity The “Great Decoupling” implies that while the economy continues to grow, wages have remained mostly stagnant for almost 30 years 6
Unequal Prosperity In Canada, the wage share of GDP fell by 7.5% between 1981 and 2015 7
Unequal Prosperity Over the same time period, corporate profits after taxes as a share of GDP increased by 77% 8
Rise of precarious work The standard employment relationship - characterized by full- time hours, permanency and benefits - is becoming increasingly rare 9
Rise of precarious work Non-standard jobs tend to be lower wage, and significantly less likely to be tied to various employer benefits 10
Declining unionization • Unions have historically played important role in establishing decent wages, reasonable workday length and safe workplaces • The rate of unionization has fallen from 37.6% in 1981 to 28.8% in 2014 • As the relationship between employer and employee changes, expectations of each becomes less clear 11
Emerging Issues • Unique nature of the digital economy • Automation of industry • Living in an on-demand society 12
Understanding the new economy: Emerging Issues • Unique nature of the digital economy • Increasingly firms are characterized by powerful network effects, low barriers to entry and fewer full- time employees • Living in an on-demand society • New business models often blur boundaries of who is considered an employee (e.g. increase use of independent contractor classification) 13
Understanding the new economy: Emerging Issues • Automation of industry • Advancements in automation and AI are now replacing human muscle power as well brain power • Deconstructing a job and outsourcing constituent tasks can be understood as part of progression towards automation 14
Automation of industry 15
Automation of industry Many studies have attempted to estimate the size of job loss due to automation across various jurisdictions, using different methodologies 16
Automation of industry Deconstructing a job and outsourcing its constituent tasks can be understood as part of a progression towards automation in which jobs become less stable and less well-paid 17
Living in an on-demand society New and emerging digital platforms easily connect those looking for short-term work, many of which use alternative worker classifications such as “independent contractor” 18
What’s the impact? • Increased uncertainty • Pace of change • Constant disruption and volatility • Significant pressure on existing regulatory/social and economic frameworks • Increased need for quick, coordinated and international responses 19
Public Policy Implications 20
Six key policy areas will face pressures to modernize 21
How is our social architecture holding up? • 39% of unemployed Canadians currently receive regular EI benefits, compared to 82% in 1978 • 48% of working-aged Canadians have not started or are currently not saving for their retirement • Over 80% of precarious workers in Ontario do not receive benefits such as vision, dental, drug, life insurance 22
How is our social architecture holding up? • Only enough centre-based spaces to care for 22.5% of children under 5 years old • Stagnant incomes at bottom of the income distribution scale have been outpaced by private market rental prices • A growing number of Canadians may not be entitled to various employment standards protections 23
Targeted programs & policy adjustments • Clarify worker classification and possible additional protections for gig workers • Enforcement and public awareness of employment standard requirements • Re-examine public sector collective agreements and opportunities to ensure robust, fair labour practices 24
Transformational changes • Danish “ flexicurity ” model • Portable benefits • Work- sharing schemes (e.g. Germany’s Kurzarbeit) • Guaranteed annual income • National skills strategy 25
@johalsunil sunil@mowatcentre.ca Stay Connected 26
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