The Director-General of the International Labour Organisation, Guy Ryder, warns that the world of work today generates inequality and marginalisation. “It is threatening our political equilibrium”, he told euractiv.com, adding it is high time to react.
Income inequality and the future of jobs became a key topic in the US presidential race. It could also play a decisive role in the upcoming elections in France, where the populist candidate Marine Le Pen has shaken up the political landscape.
Guy Ryder studied Social and Political Sciences at the University of Cambridge and Latin American Studies at the University of Liverpool. He was re-elected as Director-General of ILO this month for another five-year period.
Ryder spoke with euractiv.com’s Jorge Valero.
What should be the policy response to the nascent fourth industrial revolution?
Firstly, we should look at how we manage the global economy. I always find frustrating to think that we can focus uniquely on education, skills or apprenticeships, if we are going to apply macroeconomic policies, fiscal and monetary policies, that are going to shrink the global economy anyway.
We have to start with the macroeconomic settings. Within that, you have to look at issues such as skills development but we also have to look at the institutions and processes that have been in place for a very long while.
We have to ask ourselves about the consequences of the diversification of employment forms, like temporary work for example. Does working in part-time employment mean inferior working conditions, greater insecurity and the exclusion from social protection?
This means fundamental changes…
If you can reorganise the institutions of the labour market, if you want to supplement wages coming from labour with universal benefits or something of that type, then you are talking about a different scenario.
I think there is a fundamental question before us. Whether we try to apply familiar policy instruments, those that we have for 20 or 30 years, to the new circumstances, or whether we consider there is a decreasing marginal return of traditional policy instruments and we have to look at total new ones. It is a question which remains open, and the answer probably lies somewhere in the middle.
The risk is that the gap between winners and losers widens further as winner-takes-all outcomes are very common in the tech world. The rise of populism would only increase exponentially as a result. Are you concerned that the political response will not match the fast-pace of economic and societal changes?
It is a chain reaction: economic failure, social dissatisfaction and political impact. I do worry that we are not going to be in a position to react quickly enough.
The first priority is to escape from the state of denial. We have a problem: the world of work is generating inequality, marginalisation and unfairness. Now people are reacting. It is not enough to pay attention to the fact that it is unfair, because it is threatening our political equilibrium.
Even our democratic values in some cases are questioned. If that does not wake us up, and get us out of the state of denial, I wonder what will get us out. The reaction is urgent. It needs to be assertive. There is going to be quite confrontational politics coming down the road.
The diagnosis seems to be pretty clear: We had several shocks over the last months, including Brexit and the victory of Donald Trump. Still, nothing has substantially changed in Europe and elsewhere.
When I go to meetings like the G20, I hear everybody, unanimously, saying “inequality is a problem”. The IMF also says that inequality is dangerous for growth and societies, and we should do something about it.
But then I don’t see the consequence. There is a problem of consistency here. There is a cognitive disconnection between observed facts and suggested conclusions. That means moving out of some of the established policy settings, or ways of thinking, which have been with us for a very long time, and that is difficult. It is something like a paradigm change, and it requires a mental political effort.
Trump is doing it, but in its own political direction.
In the end, maybe his success is the result of years of failures by current politicians?
I agree, I think it is undeniable. It is the result of our own failures, because we all are in this.