A new generation of serfs could be created if employers don’t take more action to create shared ownership of companies and technologies, warns a new report from IZA World of Labor.
The report has been released to mark International Workers Day (1st May), and also sets out a new solution to the pay inequality gap, where the rich workers and owners become richer and the workers become poorer.
Richard Freeman, professor at Harvard University and labour economist, has suggested a solution whereby workers own part of the investment gained from robots. This will enable workers to benefit from the technologies that threaten to replace them.
Professor Freeman says:
“Without ownership stakes, workers will become serfs working on behalf of the robots’ overlords who own the companies and corporate capital.
“If human workers own a stake in the capital gained from the technologies that are changing the world of work, they will be provided with a steady stream of income and more inclined to accept increasing robotisation of the workplace.”
The report sets out five key recommendations for creating employee ownership. They include:
- Spreading employee ownership across the whole company by including robots and intellectual property in the company valuation
- Increase the proportions of workers’ income through capital ownership rather than direct employment
- Create employee ownership trusts to manage ownership
- Support more stock options as part of an employee’s pay package, or allow workers to buy shares at lower rates
- Government support for the creation of employee ownership
The report argues that the establishment of shared ownership of robots and new technologies will also be good for businesses. Businesses will be able to maximise on the benefits of robot technologies if workers are comfortable with them and become a highly skilled workforce alongside machines. In order to create this culture, the report argues that firms worldwide need to embrace shared ownership principles which companies such as, Google and John Lewis have developed. This will also result in better performance rates and increased productivity.
Professor Freeman concludes:
“Each country will have to choose the way that best fits to spread worker ownership and capital so as to give a stream of earnings that are changing the world of work. With appropriate policies, the higher productivity due to robots can improve worker wellbeing, by raising incomes and creating more leisure time. To benefit from this, workers need to own the capital of companies rather than rely on government redistribution policies.”