Big breakfast

“Labour markets and the world of work are transforming. An estimated 14% of jobs across the OECD face a high likelihood of automation and another 32% are likely to experience significant change over the next 10 to 20 years.” This, from the OECD’s new Going Digital: Shaping Policies, Improving Lives report, is a moderate take on a jobless future world we’ve been warned about for years now.

Despite rapid technological developments, mass technological-unemployment hasn’t materialised. Over the last decade, total employment across the OECD grew by near 38 million jobs (an increase of about 7 per cent).

But that’s not to say the job landscape hasn’t changed. Two fifths of the new jobs, for example, were created in digital-intensive industries. In addition, the demand for cognitive skills like reasoning and problem solving has grown rapidly, while the demand for routine and physical tasks has fallen.

Clearly technology benefits some more than others. High skilled workers are among the greatest beneficiaries, their skills a likely to be more complementary and more transferable. Low skilled workers, are more likely to find themselves in occupations that can be substituted for robots and automation.

But it’s the nature of technological progress, that no one is “safe”. Workers of all competencies need to constantly reinvest in their skills.

While we recognise the need for ongoing training and education, the system (including the education sector and employers) isn’t necessarily set up to allow this to happen. Education follows a big breakfast model — we’re fed a huge scholarly breakfast before our careers begin, and this is meant to see us through until we retire. But of course, we’d be much better off gnoshing and grazing on smaller snacks throughout our working lives.

Last week saw the Trudeau’s fourth budget handed down (his last before the election in October), pointedly titled “Investing in the Middle Class”. Contained in the Budget is the new Canada Training Credit (CTC).

The CTC provides a personalised, portable training benefit to support ongoing training. From 2020, Canadians will accumulate $250 a year that they can put towards cost of occupational skills training at eligible colleges and universities. The CTC cannot be used to pay for more than half the cost of the course, is means tested to a cap of $150k and is paid as a tax credit. Complementing the CTC is a new Employment Insurance Training Support Benefit that will provide 55 per cent of a person’s average weekly earnings to help workers cover their living expenses during their training.

Participation in analogous programs around the world is surprisingly low. For example, Singapore’s SkillsFuture Credit, on which the CTC is loosely based, has a very modest uptake rate of about 5 per cent. In France, participation in a similar but different program is around 20 per cent. By best estimates, something like 15 per cent of working aged Canadians paid for formal training in the last 12 months. Canada’s Budget allocates $1.7 billion to the scheme over the forward estimates, which should have a moderate impact.

For those interested, the OECD, as part of their Going Digital work program, did a study on the costs and opportunities of retraining for some 127 occupation in 31 countries. Their work broke down which types of occupations suffered the greatest skill “distances”, and the types of training required to upskill those workers.

The future of work narrative tends to over play substitution, and underplay complementarity. And while the robocalypse might not be arriving anytime soon, the OECD warns that we still need to “Get ready for a massive training challenge” that lies ahead.