TUAC Liaison Committee with the OECD tackles the Future of Work, the Future of the Firm

After ten years, employment has barely recovered to pre-crisis levels in many sectors and countries. Where new jobs have been created, workers have been bearing more risks including more job insecurity and lower salaries combined with a general rise in precarious work. The decoupling of wage and productivity growth is holding back the recovery and aggregate demand, further amplified by a decade-long combined trend of flat productivity growth and rising income inequalities. Workers are not getting their fair share of the wealth they create. The OECD has an important project to deliver in 2018: the review of the Jobs Strategy, the Organisation’s blueprint for labour market reform. It is essential that the outcome of the review offers a balanced approach to reforms with a better balance between flexibility, stability and security.

Policy thinking on the Future of Work requires a profound shift in facing the double challenge of promoting low-carbon production and consumption models, while managing the fast-paced digital transformation and potential challenges from automation. The Paris Climate Agreement explicitly recognises the need for a Just Transition for workers and their families. Just Transition principles should also apply to digitalisation and automation processes. The OECD has taken a leadership role on both aspects. It is essential that Just Transition principles are harnessed in its policy recommendations and analysis starting with its Horizontal Project on digitalisation and well-being.

The private sector is an essential engine for growth and wealth creation. However, it needs to be governed appropriately and held to account for its impact on and contribution to economic prosperity. In order to achieve better labour market outcomes and distribution of productivity gains, regulation is needed to ensure that business models are conducive to quality job creation, innovation through the upgrading of workers’ skills and well-being, as well as to long term investment in productive capital.

The pursuit of long-term and responsible business models is challenged by shifting “boundaries” of the firm in a context of trade, investment and financial liberalisation and the many opportunities for regulatory arbitrage created in the cross-border, data-driven digital economy. Yet, business responsibilities extend throughout their supply chains and irrespective of the nature of its assets. Increasingly complex business models are forcing a rethinking of the role of regulation and the Firm’s “social licence” to operate.