what makes humans work?

Under Argentinian presidency the B(usiness)20 Task force on Employment and Education has identified policy recommendations and an underlying action plan to provide to G(overnment)20 leaders at the B20 summit held on October 4 and 5 in Buenos Aires. The Task force has focused on two main topics which both are vital to well-functioning labor markets, today and in the future. The first topic is the promotion of open, dynamic and inclusive labor markets. The second one is about strengthening skills development and lifelong learning for sustainable growth. Below we will mainly zoom in on the first topic. You'll find the full B20 policy paper here. 

The future of work is today. Business possibilities, challenges and needs are evolving faster than ever before. We need to adapt. Countries which do not fully embrace these new realities in their regulatory frameworks and social and economic policies, and don't encourage social partners to discuss these issues in their dialogues, will either lack job creation or push employment into the informal sector. Given the mega trends of shifting demographics, evolving technology and progressing globalization, we know for certain that jobs will shift. Work will appear and disappear, as it always has been. Work patterns are changing and humans will move forward with the flow. Today's challenge is the increasing speed of the flow. In allowing tech to work for touch in conjunction, people need to be prepared and prepare themselves. Decent work needs to be available to people, therefore, generating labor market demand, i.e., job creation must remain the number one top priority for G20 countries and the rest of the world. 

Incentivizing labor market supply, i.e., increasing labor market participation also remains a key issue. In that framework, we need to give special attention to bringing more women, youth and other groups with a distance to the labor market to decent, formal work. Inclusive labor markets with simple, transparent, flexible and predictable legal employment frameworks are key to a sustainable future of work. This is why the B20 Employment & Education Task force reiterates the need for governments to promote flexible labor laws and a diversity of forms of employment that are conductive to robust job creation. Allowing for a diversity of work contracts that allows companies to react adequately to market changes and quickly create jobs. At the same time, labor market flexibility will allow humans to live and work in accordance with their personal situation and preferences. Diverse forms of work, like agency work and fixed-term contracts, are a proven stepping stone to the formal economy. There is a clear positive correlation. Restrictions on these flexible forms of work are counterproductive to creating more decent jobs. In the future of work the career path of people will be less linear. We all will not only have more and different jobs, but also more diversity in types of contracts and employers. 

An essential part of decent flexible work is transforming our current social systems in such an innovative way that social benefits and rights, for instance, for health care, skilling and pensions are transferable and portable across different sectors and jobs, regardless of specific contractual employment relations. In other words, we need to ensure that the flexibility the labor market and all its inhabitants are calling for is matched by stable working conditions to provide for a secure environment for all to move from work to work.

The B20 Task force on Employment and Education has been promoting female employment steadily over the last years. Recommending to governments and regulators to put in place policy frameworks that improve female entrepreneurship and labor market participation. That closed or closes the gender gap for obvious and clear economic reasons. Significant talent challenges are looming over the next decades. In many countries and sectors shortages of available talent are already being felt. Economic growth expectations coinciding with projected waves of retirements will force employers to find, attract and retain scarce talent. And in this 'war on talent' society is structurally underestimating and undervaluing half of their population! Female participation in the G20 countries is on average a staggering 26 percentage points lower than their male counterpart. Of course the differences are significant from country to country. But there is no major country to be found were female and male participation are on par. In Argentina female participation stands at almost 60 percent versus 73 for males. A 13 points gap. A ten point one in Brazil with 62% versus 72%. In Germany it’s 79% female and 83% male, in the US 73% versus 79%. The latter gaps may be smaller, but still.... it's a gap. A gap that is reflected in other labor market data as well. Women earn less than men on average. US Labor Department data showed that women who worked full-time on average had median weekly earnings that were 82% of their male counterparts. Recent UK data show that 78% of UK companies paid men more than women for comparable work, with a median pay gap of 9.7% on average.

One of the underlying causes of the gap is education. Although women are over represented in OECD countries among tertiary graduates they remain under-represented in certain fields of study, such as science and engineering. Skills that ensure good career options in today's and tomorrow's world of work. Research shows that in Latin American countries the root cause of this lies in culture and gender stereotypes, in parents that continue to be more prone to picturing their sons in careers in science, math and engineering. The Task force recommends to address those cultural norms that discourage women and to ensure access for all girls and women from a very early age to compulsory, high quality education systems with proper acquisition and application of the core competences, particularly in STEM skills. 

Furthermore, women and other groups with a distance to the labor market, as well as lower skilled, are still over represented in informal employment, particularly in developing countries. Simplifying taxation schemes that encourage small business to enter the formal labor market can help. Also lower entry barriers may support that transition, such as decreasing the costs and the time needed for bureaucratic procedures. But always combined with a level playing field. No rule of law will function or deliver if governments aren’t willing to invest in control and enforcement. 

Last, but certainly not least, governments could pay more attention to facilitating the combination of work and  care. By providing a framework for decent flexible work options as mentioned above. And by facilitating affordable and easy access to care. Society needs to invest in improving supportive mechanisms such as childcare centers, which are easily reachable, affordable and have long, flexible opening hours. People in their economically most productive years are becoming 'sandwiched' between raising their children and taking care of their elderly parents.

To conclude the Task force dares to address a topic societies are wrestling with, notably labor migration. All governments recognize the need to be competitive in our fast moving global economy. The need to attract talent.  In today's world, skills scarcity, which we do see arising in certain areas geographically as well as in fields of expertise, needs to be addressed in an integrated approach. First and foremost through the strengthening of skills development and lifelong learning policies, but that may not be enough. Nor does that cater to the needs and wishes of the talent themselves that might want to move across the globe. To gain experience, to gain knowledge, to get to know other cultures. Labor migration is important in resolving future labor shortages that will be increasing due to demographic developments. People will want to move to jobs elsewhere, and jobs will move to people in other geographies. The Task force recommends governments to adopt policies that are timely and flexible in order to accommodate new and longstanding business models, but those policies should also be predictable and transparent so that employers can effectively manage compliance and governments can efficiently control and enforce. We need to develop tools to better predict and identify skills gaps and there is an absolute need to establish frameworks for assessing formal and informal qualifications of workers, so those that wish to enter a new career in a new country can more easily transfer.

The Argentinian G20 Presidency marks the 10th anniversary of the G20 process in its current form and with it the engagement of the G20 on employment creation, skills development, gender equality, working conditions and entrepreneurship. Although the financial crises and the subsequent recession, which triggered the development of the G20 process,  has been overcome, many of the long-term structural problems and challenges in G20 countries still remain barriers for job creation, growth, prosperity and development. 

All in all the B20 Task force on Employment and Education hopes that with their 2018 set of recommendations we can provide more decent work to humans!