Exponential increases in automation, computerization and digitization is having a profound impact on many people’s jobs. Branko Milanovic’s recent work on global inequality has shown extent to which the lower-middle class jobs in developed countries are being replaced by technology. In particular, economists argue that middle-skilled, routine-intensive jobs are being hollowed-out. And indeed, in Western European countries and the US there has been a decrease in the intensity of routine tasks – both manual and cognitive. However, in Central and Eastern European (CEE) countries, the amount of routine cognitive work has been on the rise. And the pay for these workers has increased faster than for high skilled workers. Why is this happening, when in the most advanced economies the opposite is happening?
The IBS research institute in Poland has analyzed how the nature of the labour market had changed since the country transformed in the 1990s. Those who were born in the 1970s and 1908s have been able to take advantage of new types of jobs that have emerged. But those born before have been left behind. Piotr Lewandowski, President of IBS, explains how a boom in tertiary education has created new types of jobs which have benefited these young workers - but not the older workers. This shows the importance for all workers to engage in lifetime skills development so that they can survive a transformative economic shock.
Adults lacking sufficient computer skills have a lower chance of finding employment. The recent PIAAC survey of adult skills by the OECD finds that adults without computer experience or those who fail on basic ICT tasks when solving problems in a technology rich environment are more often unemployed or out of the labour market. Because of these facts, schools should equip students with computer skills that will allow them to fully participate in our rapidly changing economies. The question remains how to do that effectively and on which computer skills schools should focus. Computers have changed our lives in many ways. They should also change schools and education in general. But, these expectations are not always being met and are not always clearly defined.
In my previous post I showed that Poland has become a country with the highest share of temporary contracts in Europe – now around 26.9% of workers. I argued that this process wasn’t triggered by interactions between several labor regulations. In particular, the use of civil law contracts (as opposed to those based on the labor code) has become increasingly common, resulting in a dual labor market, in which one segment of the work force is better off (in terms of wages, income, and training) than the other. The Polish government has labeled these contracts “junk contracts” but so far it has failed to truly address the issue. What can be done to overcome the current deadlock on this issue?
The political and economic transition of post-communist Central and Eastern European (CEE) countries brought substantial improvements in GDP per capita, productivity, incomes and standard of living. But certain worrying phenomena emerged on the labour markets. One of these was a rise in temporary employment, which has created a “dual labor market” – that is, a segmented market with workers in one segment more privileged than those in the other. For the CEE economies – especially Poland – the onset was in the 2000s. A variety of possible solutions exist, but so far the Polish government has done little to improve the situation.
In recent decades, many European countries have tried to instill greater labor market flexibility through increased use of fixed-term, temporary work contracts, as opposed to open-ended or permanent ones. The result has been dual labor markets, with temporary workers having fewer rights and job security than those on permanent contracts. One expert on the topic – Tito Boeri, Professor of Economics and Dean for Research at Bocconi University, Milan – stresses that temporary workers were especially hard hit during the Great Recession.
Over the past 25 years, Poland has made tremendous progress on the economic front — closing by half the GDP per capita gap with developed countries. However, it now needs new engines of growth to keep the pace, lower the high youth unemployment rate — at 24 percent — and make better use of the available labor.