Forging a new workplace compact: An optimistic Labor Day message – Thomas Kochan

MIT Sloan Professor Thomas Kochan

MIT Sloan Professor Thomas Kochan

From The Hill

I approach this Labor Day optimistic that a broad cross-section of American workers and leaders are ready to negotiate and build a new workplace compact that reduces income inequality, restores dignity and respect for all who work, narrows the divides that separate us and ushers in a new era of sustained prosperity.

Workers and labor organizations are taking action to rebuild their bargaining power in new ways, business leaders are calling for a more balanced view of corporate responsibility than they have been espousing throughout the era of financial capitalism, educational institutions are offering new ideas and concrete programs to prepare for the future of work and Democratic candidates for president are determined to win back the support of the workers who abandoned them in 2016.

I see a common thread in these developments — a thirst for building a new workplace compact that focuses on our shared values and aspirations and that recognizes the political crisis we are living through must end before we destroy our democracy. But making this happen will require bringing all these parties together to start a dialogue focused on the interests that bind rather than divide them.

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Raising wages is the right thing to do, and doesn’t have to be bad for your bottom line – Zeynep Ton

MIT Sloan Adjunct Associate Professor Zeynep Ton

MIT Sloan Adjunct Associate Professor Zeynep Ton

From Harvard Business Review 

The “working poor” are a growing problem in America — one that is increasingly embarrassing to the corporate elite. Business leaders who are morally inclined to do the right thing should and can play a stronger role in solving this problem by raising wages to a level where their employees’ earnings cover the cost of living.

Jamie Dimon, CEO of JPMorgan Chase, was recently stumped in a U.S. House Financial Services Committee hearing when California Congresswoman Katie Porter asked him what advice he could give to a constituent — one of his own bank’s tellers, who makes $2,425 a month and lives with her daughter in a one-bedroom apartment with a $1,600 rent in Irvine. Food, utilities, childcare, and commuting cost about another $1,400, leaving her $567 short every month. Dimon had no good answer.

Yet Dimon is one of a number of corporate leaders — others include Warren Buffett, Ray Dalio, and Paul Tudor Jones — who have expressed public concern that the version of capitalism that has allowed them to be so successful is not sustainable for our society. The data are daunting. Between 1980 and 2014, while the pre-tax income doubled for the top 1% and tripled for the top 0.1%, there was little change for the bottom 50%. In 2017, more than 45 million Americans worked in occupations whose median wage was below $15 an hour. Although wages increases have finally been accelerating, 40% of Americans are living so close to the edge that they cannot absorb an unexpected $400 expense—not much, as car repairs or dental work go.

For business leaders operating in settings like that of JPMorgan Chase, where profit margins are high and low-wage employees are a small driver of overall costs, doing the right thing morally is not even that risky. Some wage increases would even pay themselves by increasing productivity and reducing turnover — employees would be more motivated, less distracted with life problems, and less eager to find a better job. For those leaders compelled by the same moral argument but operating in businesses with low profit margins and a high percentage of low-wage employees, doing the right thing morally is still possible. But it requires a lot more work.

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Robots might not take your job — but they will probably make it boring – Matt Beane

Matt Beane
Research Affiliate in
Management Science

From Wired

Whether they believe robots are going to create or destroy jobs, most experts say that robots are particularly useful for handling “dirty, dangerous and dull” work. They point to jobs like shutting down a leaky nuclear reactor, cleaning sewers, or inspecting electronic components to really drive the point home. Robots don’t get offended, they are cheap to repair when they get “hurt,” and they don’t get bored. It’s hard to disagree: What could possibly be wrong about automating jobs that are disgusting, mangle people, or make them act like robots?

The problem is that installing robots often makes the jobs around them worse. Use a robot for aerial reconnaissance, and remote pilots end up bored. Use a robot for surgery, and surgical trainees end up watching, not learning. Use a robot to transport materials, and workers that handle those materials can no longer interact with and learn from their customers. Use a robot to farm, and farmers end up barred from repairing their own tractors.

I know this firsthand: For most of the last seven years, I have been studying these dynamics in the field. I spent over two years looking at robotic surgery in top-tier hospitals around the US, and at every single one of them, most nurses and surgical assistants were bored out of their skulls.

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Tech innovators open the digital economy to job seekers, financially underserved – Irving Wladawsky-Berger

MIT Sloan Visiting Lecturer Irving Wladawsky-Berger

MIT Sloan Visiting Lecturer Irving Wladawsky-Berger

From The Wall Street Journal

The future of work is a prime interest of the MIT Initiative on the Digital Economy, started in 2013 by researchers Erik Brynjolfsson and Andy McAfee. To help come up with answers to questions about the impact of automation on jobs and the effects of digital innovation, the group launched the MIT Inclusive Innovation Challenge last year, inviting organizations around the world to compete in the realm of improving the economic opportunities of middle- and base-level workers.

 More than $1 million in prizes went to winners of the 2017 competition in Boston last month in four categories: Job creation and income growth, skills development and matching, technology access, and financial inclusion. Awards were funded with support from Google.org, The Joyce Foundation, software firm ISN, and ISN President and CEO Joseph Eastin.

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Artificial intelligence and the future of work – Thomas Kochan

MIT Sloan Professor Thomas Kochan

MIT Sloan Professor Thomas Kochan

From InfoTechnology

Artificial intelligence is quickly coming of age and there remain lingering questions about how we will manage this change.

AI will eliminate some jobs, there’s no question, but it will also create some new ones. So the first question we will face as business people, workers and citizens is about balance: are we going to create more jobs than we eliminate or not?

The second and much more fundamental question is: how are we going to proactively manage our AI investments so we can use AI to create new jobs or career opportunities for the future? And how will we make sure those jobs reach out to various sectors of our society increasing our overall wealth and well being and not overly increasing the inequities that already exist in our society.

I believe if we think about it strategically and if we engage more people in the design of AI systems, we’ll be able to make this transition successfully. It will require a proactive strategy. The American public and people all over the world have been shown the negative consequences of not being proactive—take global trade for example. The benefits of global trade have not been widely shared and we are now witnessing the effects of the anger and frustrations this has produced in the movement to more extreme politics and the deeper social divisions laid bare by recent events. We can’t make the same mistake about the future developments of technology.

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