The new world of work needs to be fair as well as efficient
Autor: Mauricio Rodrigues | Publicado: 2011-09-10T14:51:00-07:00

A better balanceMore feast, less famineThe Economist, Sep 10th 2011&nbsp;               



             WORK TODAY IS about far more than economics. More even than when  Theodore Roosevelt extolled its virtues, people the world over want work  not just to put food on the table and money in the bank, but as a means  of gaining personal satisfaction. The changes now under way stand to  make the world as a whole significantly better off and allow many more  people to win the prize of being able to work hard at something worth  doing. Yet, as this report has explained, there are many people who are  not winning the prize and for whom the outlook is grim, even in rich  countries where getting a decent job had been taken for granted.
Globalisation and other pro-market reforms were sold as a package  deal. Opening up a country’s markets, the argument went, would increase  overall wealth in every country, and policies for internal  redistribution would help the inevitable losers—or else their personal  misery could have serious social consequences for everyone else. That is  why jobs are rightly at the top of the political agenda the world over.
Where unemployment is currently higher than usual, there is  enormous pressure on politicians to spend money they have not got on  quick fixes that almost certainly would not work. But almost everywhere,  what is needed from government are the sort of fundamental reforms that  can make a big difference in the long run, beyond the next electoral  cycle.&nbsp;
The mismatch between the skills demanded by employers and those  available in the market is a reflection both of bad choices by students,  who have not thought hard enough about what will help them find a good  job, and of education systems that are too often indifferent to the  needs of the labour market and too slow to change even if they try. It  is not just Egypt where the universities provide training for  public-sector jobs that are no longer abundant yet fail to equip  students with what they need to thrive in a market economy. Out of  necessity, India is emerging as a model for tackling these problems,  both because its companies have become expert in turning useless  graduates into useful ones and because it has allowed industry to take  the lead in creating a huge new programme to tackle skills shortages.
A second challenge is for governments to create the right conditions  for businesses to create more jobs. That means running sustainable  macroeconomic policies, so that firms need not fear that their  investments will be undermined by another economic crisis; sensible  regulation; and a tax system that is both competitive, with low marginal  rates, and does not distort business decisions in arbitrary ways. Given  the importance of job creation, it would make sense to shift some of  the burden of taxation permanently away from employment towards  consumption or carbon emissions. And since entrepreneurship plays a big  part in creating jobs, especially in the phase when young businesses  expand rapidly, government should do all it can to encourage more of  it—though in view of its poor track record in this area, that should be  mainly a matter of supporting (rather than obstructing)  private-sector-led initiatives.
The goal of creating flexible labour markets should not be abandoned,  but in future the ways in which inflexible labour markets are loosened  up should be given more thought. The countries with the biggest  youth-unemployment problems tend to be those where either there is no  flexibility (as in much of the Middle East) or where flexibility applies  only to newcomers to the jobs market, whereas older incumbents have  continued to enjoy the protection that made the labour market inflexible  in the first place (as in Spain). The political attractions of leaving  the incumbents’ privileges untouched are obvious, but so, by now, are  the social consequences of making the young bear most of the costs of  flexibility.
The political attractions of leaving the  incumbents' privileges untouched are obvious, but so, by now, are the  social consequences
Long-term unemployment often turns into permanent unemployment, so  governments should aim to keep people in work, even if that sometimes  means continuing to pay them benefits as they work. Health care and  pension systems should be (re-)designed to allow workers as much  flexibility as possible, not least in deciding when to retire. In the  rich world these welfare systems were built on the assumption that men  with lifetime nine-to-five jobs were the main breadwinners. In emerging  markets that are introducing social protection for those unable to earn a  living, the systems should be designed in ways that do not discourage  work.
There is no excuse for delay in starting to put in place these  long-term solutions. Jeff Immelt of GE may well be right to think that  in America “ultimately we will get it sorted,” but he is also right that  political dysfunction in Washington, DC, has “an opportunity cost. It  is not like the rest of the world has stopped while we are going through  this.” The same is true in many other countries where reform has  stalled or is not even on the agenda yet.
And while individuals wait for their governments to get their acts  together, there is plenty that they can do to give themselves the best  chance of surviving and thriving in the new world of work. They need to  clean up their image on the internet, get in touch with their  entrepreneurial DNA and brush up on their serial mastery. And form their  very own posse.