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The Future of Jobs

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The Future of Jobs

The law addresses the worker as the core component of production

Chile recently went through a process to achieve a profound labor reform. Like Costa Rica, this reform coincided with an economy growing at a minimum and investments practically stagnant, where companies have very few options to avoid letting go their workers.

While this is happening in Latin America, Michael Chui of the McKinsey Global Institute recently indicated that the potential of artificial intelligence and advanced robotics to perform tasks previously reserved for humans will no longer be solely for demonstrations by IBM’s Watson, Baxter of Rethink Robotics, DeepMind or Google’s driverless car.

Let’s look at the most common processes at an airport: automatic check-in kiosks dominate the ticketing areas of many airlines. Pilots actively drive the aircraft for only three or seven minutes of many flights, and the autopilot guides the rest of the trip. Passport control processes at some airports may place more emphasis on scanning bar codes than observing incoming passengers.

In essence, jobs, as we know them today, are undergoing a severe transformation due to advances in artificial intelligence (AI), the development of algorithms and the sophistication of robots, leading to humans being replaced for automation.

Current technologies can mechanize most work activities and the cost of these technologies is decreasing just when human labor costs are increasing.

There are those who claim that automation has the potential to create widespread benefits. However, without proper supervision and leadership it could exacerbate unemployment and economic inequality in our countries.

What can we expect?

The Harvard Business Review (HBR) has shared revealing data. The nature of jobs will undergo a profound transformation on two fronts.

First of all, machines will increasingly take over the routine tasks that defined work in a standardized world of mass market products. Second, the only way to create value will be to redefine jobs at a fundamental level to focus on distinctively human capabilities such as curiosity, imagination, creativity and emotional or social intelligence.

The problem is that the adoption of these technologies will disturb the working world. In addition to the jobs that will be replaced, there are those that will change and those that will be created.

The McKinsey Global Institute suggests that approximately 15% of the global workforce could be displaced by 2030, but that jobs created would compensate for those lost. The condition is that the economies maintain high economic growth and dynamism.

One of the most important effects of automation is related to taxes, since through automation tax revenues would be substantially reduced.

Most of the tax revenues of the countries, both industrialized and developing ones, come from workers taxes.

Therefore, several countries are exploring to solve technological unemployment with a universal basic income, or through a tax on robots to subsidize displaced workers. Interestingly, this latest initiative has been promoted by Bill Gates.

The regulation of work

Increasingly, robots and machines are becoming “cheap”, sophisticated and efficient goods.

Routine and repetitive jobs in the manufacturing factories are done mostly by machines. However, we must not forget that there are some more specialized jobs in the medical, legal, accounting and financial sector, among many others, also being achieved.

The competitive advantage of emerging economies, based on cheaper labor forces, could be eroded as robot production lines and intelligent computer systems reduce the cost of human effort.

Traditionally, our legislations have addressed the worker as the core component of production, strengthening their rights, aplombing it to the position without considering their skills and performance.

Excessive protectionism or saturated laws have motivated industrialists to look for alternatives in the mechanization of procedures, using the resources provided by data mining and algorithms to dispense with jobs that have become a burdened resource of innumerable contingencies.

Conversely, robots do not apply for disability licenses, do not participate in strikes, are not demotivated, or enjoy motherhood, among many other human conditions.

In Costa Rica, if we consider that the last major labor reform took 17 years of negotiations, discussions and concessions, it is possible that when we become aware of the urgency of a modernized regulation and aligned with technological processes, we are already in the middle of the consequences of automation, since these processes tend to advance faster than the reaction capacity of regulators. * Lawyer

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