Council conference on the future of work
‘Only marriage and divorce are not digital’
SW/Dr.S-W – 10/2017
A high-level conference organised by the Estonian Presidency of the EU Council on 13 and 14 September was dedicated to the Future of Work. The three main topics discussed at the conference were: the future of work, the future of education and the future of public digital administration. In the latter, Estonia is a true pioneer in every aspect.
EUROFOUND had prepared a background paper for the conference on recent developments in non-standard forms of employment. Generally speaking, the proportion of people in self-employment or non-standard employment in Europe has remained relatively stable since 2005; this was confirmed by other participants. The only countries to have experienced a significant increase in self-employment are the UK and the Netherlands. Of note are the reorientation and differentiation of working forms within the group of self-employed persons. The growing percentage of solo self-employed workers and digital platform workers are outstanding examples, albeit most platform workers only earn additional income from this form of work.
What does technological change mean for the future world of work?
There was broad consensus that many traditional jobs will disappear and new ones will emerge without being able to reliably quantify the effects over time. New skills and abilities are required. How do we best deal with change? There are two problems in particular that need to be tackled: guaranteeing the financial sustainability of social security and adapting social security to this guarantee.
Estonian President Kersti Kaljulaid set the tone in her opening speech: taxing technological advancement based on a ‘robot tax’ is absurd, as is a universal basic income for all. Technological advancement and digital change should not have to adapt to people, rather people should adapt to change. The inevitable transformation must also include the poor and those without a good education, even if this means through social assistance. With changes in the economy and society, individual models of living also change and the traditional elements of social security in these models no longer play the same role as they used to. Therefore, it is time to think about more flexible models with ‘opt-ins’ instead of all-encompassing compulsory protection against all risks, said Kaljulaid.
This was echoed by Markus Beyrer, Director General of Business Europe: self-employed people do not need the ‘same’ social security as those in dependent employment but rather an ‘appropriate’ level – and that includes more freedom of choice. For example, maybe platform workers don’t even want to be safeguarded against all traditional risks – this offers a lot more flexibility.
The core social risk of the future was identified as a ‘lack of employability’. The EU Commission’s Director-General of Directorate-General ‘Employment’ Michel Servoz provided the introduction. In the EU countries, 70 million people are unskilled or not skilled enough when it comes to digital competences – which is essentially confirmed by the Commission’s Scientific Service. According to this, there are 100 million Europeans who have never used the internet, and 45% of the population (37% of the workforce) have insufficient digital knowledge. Of those without sufficient digital knowledge, 42% are unemployed.
New regulatory framework to ensure social security?
Given new forms of work such as platform work, do we need a new regulatory framework to ensure social security in the future? No, was the answer from EUROFOUND Director Juan Menendez-Valdes, but the existing rules must be adapted. Valdes explicitly referred to a study conducted by the European Social Insurance Platform. This showed that there are quite interesting practices in the various Member States aimed at also including these people in statutory pension insurance schemes.
Professor Paul Schoukens from the University of Leuven took a different view: social security schemes should no longer be built around ‘typical work’ as the source of income, but rather should include all sources of income. Business models such as Airbnb show that there is little difference between work income, professional income and capital income. Therefore, it is increasingly making little sense to link social protection to the standard working relationship with a unitary employer, which is the case of the second pillar of pension insurance. This link must be replaced with a universal system.
Journey into the vision of digital administration
New forms of work could require new ways to collect taxes. A representative of the Estonian Ministry of Finance drew attention to the problem that it is almost impossible to work out the location where ‘digital nomads’ are working from. Ultimately, this puts them in the position to ‘cherry pick’ in terms of taxes and social security. As such, cross-border exchange of tax-relevant data will become even more important; however, up until now, this has been bilateral at best. At national level, there are already some promising approaches being taken such as the possibility for Uber drivers to voluntarily agree to their tax-relevant data being automatically provided to the tax office via the platform.
There was a broad discussion on lifelong learning. The discussion addressed both the issue of an ‘obligation’ to provide continuing education as well as the issue of financing. Some participants favoured more of a mix – worker, employer, state, possible joint funds and individual retirement accounts. Others believed that this is a state obligation, similar to primary and secondary education.
Although not unequivocally related to the topic of the ‘Future of Work’, the host of the event, Estonia, could not resist a journey into the vision, or in the case of Estonia, the reality of digital administration. An Estonian government official and a representative from the Ministry of Finance explained that other than marriage, divorce and selling your house, everything else can be done online, including parliamentary elections; 30% of Estonians cast their vote electronically. The healthcare sector has also been converted to electronic data and information. Taxes can be declared and paid automatically using electronic bank data. This makes annual tax declarations superfluous.
Every citizen has an e-ID card, including an electronic signature function which can be used both for private and public purposes. All public services converge via an ‘X-road platform’ and the ‘once only’ principle is applied, meaning a citizen only has to provide their information once and then all other public authorities have access to this information.
90% of Estonian citizens use electronic government services; the rest still have to be convinced. However, the government official regretted that this ‘beautiful new world’ stops at the border. But in further debate, an issue was raised which shows the risks of this ‘beautiful new world’. Up to 50% of electronic ID cards have been hacked.