Social security and protection are major concerns in the rapidly changing world of work, say experts at the recent EPF-The Star Roundtable on “The Future of work: Preparing for tomorrow today.”
ONE of today’s biggest anxieties is: “How do you maintain a sense of purpose when so much can be automated?” said Mike Walsh, CEO of Tomorrow, a global consultancy on designing business for the 21st century.
As robots and artificial intelligence push humans out of the workplace, people will start searching for something to keep them busy and give them a meaning to life.
“Without purpose, people can cause all kinds of trouble,” he said.
The impact of the technological disruption forces on jobs will definitely reverberate beyond the workplace into the social and political sphere, said Walsh who was one of the speakers at a media roundtable during the International Social Security Conference (ISSC) 2017 organised by the Employees Provident Fund with global investments company BNY Mellon at Aloft Kuala Lumpur Sentral recently.
Moderated by The Star’s features editor (business) Jagdev Singh Sidhu, the EPF-The Star Roundtable on “The Future of Work: Preparing for Tomorrow Today” also featured EPF deputy chief executive officer of strategy division Tunku Alizakri Alias; BNY Mellon Asia Pacific chairman David Cruikshank; Willis Towers Watson managing director and global practice leader Ravin Jesuthasan and futurologist Magnus Lindkvist.
Walsh believes the question of purpose in life will arise once we have gone through this period of resolving the issues of dealing with the disruption of jobs and providing support for the people who need it.
“It’s the hardest thing we are going to face,” he said, citing the situation in the Gulf countries.
“In countries like Kuwait and the United Arab Emirates, for instance, people have lots of money and all their needs are taken care of, but you still have an incredibly high youth dissatisfaction.”
Concurring, EPF deputy chief executive officer of strategy division Tunku Alizakri Alias warned of youth on the other end of the spectrum getting fired up by inequality, a situation he said is being complicated by the growth of social media networks.
“In the past, when you have ‘bad news’, you actually have a cool-off period. Now, due to tech development, this is not confined to a small community and can flare up and spread very fast. Not just in the individual country but globally.”
And with a majority of the highly connected younger generation facing the prospect of losing work and getting frustrated at the inequality happening – it spells a recipe for trouble, he noted. “Now inequality is a really big issue because the traditional idea of equality, even in Malaysia, has changed. We have become a ‘Me, Me, Me’ world.
“The more inequality or the perception of human inequality persists at this very fast pace, the potential for a social upheaval becomes higher, and we don’t want another Arab Spring to happen.”
Willis Towers Watson managing director and global practice leader Ravin Jesuthasan cautioned against crime.
“We are already seeing this happening in the shadow or dark economy,” he said. “If you look at the rapid growth of the dark economy as we move to inequality and the separation of work and job from income, that is going to be one of the big unknowns.”
This inequality will be intensified as the changes in the work landscape and increasingly borderless world impact incomes and social security coverage including retirement funds and tax collection.
Up to 30% of the global workforce is pursuing freelance opportunities, while 50% of Malaysian workforce is in the informal sector or self-employment. The gig economy in Malaysia, meanwhile, is growing by 31%.
While the Government has introduced the 1Malaysia Retirement Savings Scheme in an effort to ensure self-employed individuals without fixed monthly income have a savings plan upon reaching retirement age, it is feared that their nest egg would not be adequate.
This has prompted the EPF to call on the Government to increase their contribution for SSP1M members from the current rate of 10% a year.
One issue that governments will have to think about is the scope of the provident fund, said Tunku Alizakri.
“With EPF, for one, we have to consider who we provide benefits to. To Malaysians or those who provide services to Malaysians? And what about Malaysians working online and overseas? Who should they be making contributions to?”
Another is the question of which provident fund to join if the person works on a borderless platform, he said.
“I mean, one day I can be working here in Malaysia, another in Nicaragua, Kenya and the next in Britain. Should contributors have a global choice of provident funds?”
Tunku Alizakri believes another big issue for organisations and policy makers is how to design a lifelong work profile that can morph with the life developments of a person.
“The question is what kind of work ensures that you can contribute to society but still get paid? People want to do something they love, something the world needs or something they are good at. If we can redefine work as that, instead of the 9-to-5 grind, people will want to work forever and they can be productive throughout their life.”
This is where the role of the government comes in, he said, challenging the common assumption that people cannot and do not want to work forever.
“The role of government is not to make you happy and wealthy. The role of government is to ensure you have a platform to earn enough and live the way you want to live and become what you want to become.”
Another impact on social security is the tax implications of the changing job landscape.
“We have seen in certain economies how narrow the tax base is getting due to the growing gig economy.
“For example, the income replacement of Malaysians working on a platform is about 50% of their day jobs, and that is 50% of more income that is escaping taxation.”
Lindkvist drew on Homo Deus - A Brief History of Tomorrow by Israeli intellectual Yuval Noah Harari to illustrate how countries can compel people to contribute to their national coffers.
As Harari wrote, most people think there are only two kinds of truth: objective and subjective.
“An objective truth is one that can be demonstrated scientifically or logically. A subjective truth is a truth that can only be comprehended personally – for example, I like brown rice, so it is a subjective truth for me.
“But there is a third kind of truth – intersubjective truth, which is a truth that is only true when it is shared by a network of subjects such as ‘nation’, ‘citizenship’ and ‘currency’. They are now being lost in the rapid changes of the world,” Lindkvist explained.
“So, we cannot just have a law to compel workers to pay money to the state and we cannot expect people to pay tax out of their kindness or if they feel like it.
“What we need to find is the new truth that might unlock the compassion in a person to pay tax, donate money and help their fellow citizens.”
Jagdev pointed out that with the opening borders, there is a growing protectionism in the world. “There seems to be a disconnect between policy response and the changes in the world. How do we overcome and reconcile this?” he asked the panel.
Cruikshank sees this as a timely question as we go through a maturation process.
“As long as we stay within the policy and regulatory requirements, then through a platform and use of technology, we can share benefits on a cross-border basis, “ he said. “Crucially, we can see that the global economy exists and is growing, globalisation is not dead as countries are relying on each other – we were talking not only about the movement of services but also movement of people. And the movement of people in and out of jurisdictions is not going to stop.”
Ravin described protectionism as a knee jerk reaction. “It is the most expedient way to deal to with things like change and inequality, or at least pretending to deal with inequality when in actual fact it is not a solution.”
“For example, in the US it is easy to blame the neighbours of the south rather than the machine next door for any job loss. There is a complete lack of recognition and understanding of what is actually driving the job loss.”
To Walsh, when faced with this scenario, there are two alternatives to pacify people.
One, he said, is to provide them with a Basic Universal Income, or a guaranteed minimum income for residents or citizens regardless of criteria – age, wealth, job status, hometown, family size - as a cushion to try new ideas.
“But I personally think the idea of the Basic Universal Income is dangerous because any psychological study of wealth always show that it is relative.
“If you give people basic universal income, they will still think they are poor and many will feel that there is still inequality.”
The other alternative, he said, is to enable the base to be more entrepreneurial.
“We should remove barriers to starting up business; introduce more tax breaks and incentives; provide access to technology and allow people to set up globalised businesses and use new platforms to enable a new entrepreneurial class.
“Unfortunately the main focus of the current debate on this issue is: ‘When will the robots come for our jobs?’ and ‘How much money do we give to people to keep them quiet?’”
The reality, he noted, is that it is not robots who are coming for our jobs, but the big corporations with sophisticated platforms. “These are the people who are escaping taxation and responsibility. So, we should look at the positives – how do we re-enable a new generation of entrepreneurial small businesses.”