Skilling for the future is the way to fight inequality

The COVID-19 pandemic has highlighted the growing inequality between rich and poor, but that inequality is set to grow unless we address how to reduce poverty by preparing people for the changing world of work, a discussion led by five Nobel Prize winners was told.

The Nobel Prize Dialogue took place on 18 May hosted by the University of Pretoria, South Africa. Five Nobel Prize laureates in economics, peace and physics, other world-leading scientists, policy-makers and thought leaders came together to talk about the future of work, for which the University World News Africa edition was the media partner.

The dialogue kicked off with Muhammad Yunus (Nobel Peace Prize winner, 2006) introducing the ‘impact of COVID-19’ panel by highlighting growing inequality between the African poor and the wealthy West. On the one hand, he said, many Africans have seen their daily income slip from US$5.50 to perhaps US$4.50 over the last year, while ‘people at the top’ have seen a huge increase in their wealth.

Christopher Pissarides (Nobel Prize in Economic Sciences, 2010) expanded on this point by identifying two other signs of increasing inequality: that of people who have to work in contact with others and therefore are at great risk of catching the virus, and those who can avoid this risk and reduce their costs by meeting online.

“These inequalities are likely to remain,” he argued, “but rather than just look at the difference between rich and poor, we need to focus on reducing poverty, because that is what is really important.”

Impact varies by age group

Irma Eloff, former dean of the faculty of education at the University of Pretoria, picked up on another aspect of inequality caused by the pandemic, specifically that of the varying impact on different age groups.

“Reports show that older people are both more productive and happier,” she said. Part of the reason for this is that they now define themselves less in terms of their career and more in relation to their hobbies.

Lebone Nkhumeleni, lecturer at the University of Pretoria’s department of business management, argued that the pandemic has seen business models change. By 2025 50% of the workforce are going to be millennials and they prefer flexibility, innovation and contracting out their services to organisations that matter to them most. In this sense businesses will need to “reconfigure purposefulness in work”, she said.

Nonetheless, the panel had more hopes than fears regarding the future of work post-pandemic, with the general consensus being to invest in people, particularly those ‘at the bottom of the labour market’.

This contextual debate flowed into an interview with Christopher Pissarides on ‘shaping the future of work’.

Moderator Margaret Chitiga-Mabugu, from the University of Pretoria’s school of public management and administration, opened by asking what we should do to prevent COVID-19 worsening poverty and unemployment.

‘No quick fix’

“There is no quick fix,” Pissarides said. “We need governments to take initiatives like investing in schools and the digital infrastructure, but also in the physical infrastructure. In Africa many children can’t walk to school from their villages during the rainy season, for example, and these things rarely occur to us in the West.”

Pissarides argued that pupils should be equipped with basic skills in STEM subjects (science, technology, engineering and mathematics) – because we will all be users if not producers of technology – but also in social skills.

While there is likely to be less face-to-face interaction in the future, “in the hospitality sector, for example, I do not want my host to be a robot,” he said.

Young people in general will need to take the initiative more as they need to get into the labour market before having any chance of progressing within it, Pissarides said.

Young women, specifically, can be empowered by governments offering high quality childcare and three months of paternity leave. In Norway and Sweden, for example, these policies have led to higher rates of female participation in work.

The future of employment was also addressed by Joseph Stiglitz (Nobel Prize in Economic Sciences, 2001), who was interviewed by Adam Smith, chief scientific officer at Nobel Prize Outreach, in a session that followed.

Stiglitz reinforced the earlier point about Zoom making some workers even more productive and feel better, while at the other end work precarity has grown.

“We need to ensure that the technology companies who have made enormous profits pay their taxes and that this revenue goes to those in emerging markets,” he said.

“[Furthermore], the tech giants establish regulatory frameworks that benefit themselves and they make money out of false information, for example, that undermines our democracies. This has angered people,” said Stiglitz.

“In Africa, in particular, we need enormous investment to make the green transition and raise standards of living,” he said.

“Jobs will eventually be lost because of advances in technology, but lots of labour will be needed at least over the next 30 to 40 years. We should be making work less onerous for those at the bottom and putting it higher up on our agenda, because it’s obvious that many companies aren’t doing that.”

The dialogue split into three ‘breakout tracks’ focusing in turn on the future of education, the future of employment, and the social and environmental impact of work.

Track two, on employment, was moderated by Cila Myburgh, director of enrolment and student administration at the University of Pretoria, and had Pissarides and Joel Mokyr, professor of economics and history at Northwestern University in the United States, as panellists.

Mokyr gave context to the session by reminding listeners that before the industrial revolution, people worked at home or in fields but did not have jobs in the way the term is understood today.

Industrialisation brought some advantages, but people lost freedom in factory work, for example, whereas thanks to technology many will be able to return to enjoying the freedom we had before the industrial revolution, he argued.

People in particular sectors, like chefs for example, won’t be able to do this, but “technology is going to extend this possibility to increasing segments of the labour force,” he said.

Contextual challenges of reskilling

Myburgh then asked how people living in poverty including in Africa can be upskilled or reskilled. Pissarides replied that it was a long process but that “the basics like clothes and food are important, because learning is fine but not if you are sitting there cold and with an empty stomach”.

Mokyr said that investment in infrastructure was key but compared India with China where he said the latter had been able to make a political decision to invest that has transformed the country.

“There are 100 universities in Shanghai,” he said, “because they have a strong autocratic government that makes those types of decisions, and that is a sobering thought. It perhaps couldn’t happen in India.”

In response to a question from a 15-year-old listener about the need to create steady long-term employment, Pissarides highlighted the case of Singapore, which creates the right jobs because they create the right business environment.

“One mistake people make is saying that you need to give more money to workers,” he said, “but the best thing to do is create the right investment environment. People say I am a neo-liberal educated in the West when I say that, but that’s what you have to do.”

Turning to the increasingly important issue of reskilling, Mokyr argued that the challenge is to find ways of giving new skills to people in their 50s who perhaps have 15 years or more left in the labour market.

“Many millions have learnt how to use new technologies during the pandemic,” he said, “so it is possible.”

“Can people be taught to be entrepreneurial?” enquired Myburgh. “Some young people trade football cards in school,” replied Pissarides, “but if you have that inclination, you also need training such as basic management skills and economics. I am not that entrepreneurial, which is why I became a university professor,” he said with a smile.

“It can be taught; like with music, almost everyone can reach a certain level,” added Mokyr. “But you need to have the right environment for music to flourish and the same is true with the economy. In the US, despite all the things that are wrong with it, we have that.”

Governments cannot make people entrepreneurial, but they can create openness, he said. “They can do this by enabling people to move… in the US look at the immigrant contribution, for example, it is huge.”

Collaboration with universities

“I agree entirely,” said Pissarides, “but there is more to it. We need good universities and collaboration with businesses, like that between Stanford or Berkeley and Silicon Valley.

“The US comes at the top in global innovation reports, but smaller countries like Sweden also are very successful – Spotify and Skype are Swedish apps for example.

“In the EU some countries, like Portugal, are less successful because the innovation environment is not there.”

Mokyr concurred and added that you need an environment that encouraged people to think outside the box, like in Israel, which he suggested ‘has no box’. “Yes, in this kind of environment 99 of the initiatives are going to be from crackpots…”, he concluded, “but one will turn out to be genius.”