SOME FURTHER THOUGHTS ABOUT THE FUTURE OF EMPLOYMENT

Some further thoughts about the future of employment

Filip Abraham

I agree with many of the comments I have read. The following points should be seen as complimentary with the other statements.

1. The current crisis does not change the structural drivers of employment but potentially introduces a period of unemployment levels exceeding the natural rate of unemployment. If so, expansionary macro-economic policy may have a role to play in particular since there is no clear inflationary threat at this moment.

2. Educational systems and structural labor market policy must focus on promoting flexible adjustment to changing economic conditions. In today's global world, people are likely to switch jobs during their careers. Current policies are spending to much attention in preserving what exists instead of switching to what is new.

3. It is often argued that employment in the non-traded sector of developed should be expanded as those sectors are shielded from global competition. This is true to some extent as the aging of population, the outsourcing of many personal services by higher income professionals, and the increased demand for art, culture, media...services creates new employment opportunities.

Nevertheless one should recognize the limits of this employment expansion. First, several of those non-traded jobs are or may become exposed to international competition. Second, the expansion of non-profit employment is dependent on the profitability of the rest of the economy. This balance between the development of personal services and international competitiveness of the economy is a matter that will continue to be important in particular in European economies.

4. What are the necessary skills for professionals of the future? The book on the Flat World by T. Friedman devotes some readable chapters to this question. What matters is a skill that allows a  professional to differentiate himself. This can be a specific expertise, creativity, an ability to make people work together in a team, an ability to synthesize ideas, to communicate difficult ideas in a transparant way, to filter the core out of a flood of information.

5. Will the winner take it all (or most) in a global economy as is something claimed in the literature? According to this theory, globalization polarizes the inequality between normal workers and the superstars? While this effect may be present in some occupations, recent research shows that it does only contribute marginally to a widening of income inequality.