A Difficult Path to Sustainable Employment

When most people consider sustainability, they think of environmental sustainability, not the elements of a sustainable society, including fair access to jobs for all.  As a global society, we are obsessed with growth and increasing production. However, increased production can have its drawbacks. For example, as productivity increases, technology begins to replace the labor force, leading to increased unemployment. As unemployment rises, purchasing power decreases. Production and service utilities move abroad in order to take advantage of cheap labor, which causes localized job losses. With the loss of jobs and purchasing power, employers become reluctant to expand employment in such uncertain times. Sound familiar?

This cycle of insecurity and falling employment is one that currently plagues much of the world. Therefore, the question arises, how can societies develop an employment system that is equitable and economically and environmentally sustainable? Nicholas Ashford and Ralph Hall offer a multitude of suggestions in their new book, Technology, Globalization, and Sustainable Development: Transforming the Industrial State. Some of the solutions they propose include taxing excess profits, integrating labor into production and services once again encouraging leasing and sharing programs, taxing corporations that shift production abroad, and relieving payroll taxes.

Some of these strategies have already been implemented, with varying degrees of success. In Germany, for example, massive job losses were prevented by providing subsidies to workers and shortening their work hours. This prevented Germany from suffering the same rate of unemployment as other EU nations in the wake of the 2008 recession. However, data reveals that although jobs were saved, the low-wage and temporary-job sectors were boosted, thereby increasing wealth inequality. Integrating labor back into production and services is often difficult, as people become accustomed to conducting business on the Internet or using technology in place of human-labor—but perhaps not in all cases. Few people I know would complain if a human helped them check out their groceries or check in for their flight, instead of being forced to try on their own with a not-so-friendly touch screen computer.

Now you can scan and bag your own groceries as you shop and then just pay a machine after you're done. Soon groceries stores will only need to employ one person simply to check your receipt as you leave. (Image courtesy of Ben Schumin via Wikimedia)

In this context, however, worker-owned co-operatives have been successful, with the Mondragon Corporation in Spain as the largest example.  Although some worker-owned co-operatives have survived in the current economic climate, it is difficult to imagine a world in which multinational corporations evolve to be more worker-owned—not without some serious interventions by governments at least.

One way governments can help workers is by cutting payroll taxes. This will encourage employment as it allows employers more flexible finances. The United States recently extended its payroll tax cut in an effort to encourage employment and growth. However, the government depends on revenues generated from the payroll tax, and so as it cuts payroll taxes, it must find another revenue stream. One possibility is to shift payroll taxes to pollution or carbon taxes, thereby taxing “what we burn, not what we earn.” Several countries including Russia, Denmark, Ireland, Spain, and Sweden have already transitioned so they tax pollution instead  of increasing payroll taxes. This method is both logical and economically viable.

Other tax reforms can contribute to a sustainable employment regime. For example, taxing technology could produce government revenue while still encouraging technological innovation and employment. There are already small fees on some technological conveniences, such as online orders and payments. Perhaps taxing airport kiosks, self-checkouts, and other forms of convenience that replace jobs is a solution? But then again, this transitions the cost of technological innovation onto the consumer, so probably wouldn’t deter this technological shift. Also, taxing corporations that move their productions overseas would encourage localized growth and employment.

What is clear is that the traditional employment mechanisms have failed in the current economic crisis. Though labor reform may be difficult, having enough job opportunities for all is absolutely critical for a sustainable and prosperous society.

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