Should Employment Matter? A Policymakers Perspective on this Wicked Problem
Updated: Sep 2, 2022
For policymakers, this is a wicked problem. Complex, inter-determinant, and highly resistant to finding solutions (or at least happy ones)! On the one hand, more people employed means more economic revenue (people need to buy things, rent houses, and use services like sending their kids to school). These transactions create a spillover from the one primary job in a sector. For example, the aluminum industry in UAE is very specialized; if you just look at the factory, it supports approximately 10,000 directly-employed workers, but if you look at the supply chain and employee spending, that is an additional 50,000 jobs! So the first job of policymakers is to understand how the increase/reduction of salaries or addition/removal of jobs (retrenchment, layoffs), etc., have a spillover effect on the economy.
While listed companies are responsible to shareholders, they also should be very aware of the ecosystems (the vast layoffs in the tech sector in the USA are very worrisome!!!). If suppose the Securities and Exchange Commission that regulates stock markets asks in its annual reports: how many jobs are continuous (how long has the employee worked) and independently to list why people were fired, they just become more than a number (10% layoffs to ensure 25% more profits).
We may have a better understanding of how this affects the economy (sell off the house, relocate, take kids out of the schools, stop buying groceries, sell off the car, live off the savings, no health care…..). This becomes more than the CSR /ESG PR fluff companies love to report! After all it should start first start inside the organization. We need more accountability from large companies first, which needs to trickle down to smaller companies. Providing jobs helps the community thrive! This may be an equity problem (how many unemployed have you provided jobs? How long were they unemployed? How many fired people have you helped place in other careers?). It could be added to annual reports and under ESG reporting.
In Germany, post-pandemic and with an influx of Ukrainian refugees, unemployment increased to 5.5%. The country has very complicated laws that do not make the employment of workers easy. Further, there was an interesting case of Lufthansa, which took state subsidies during the pandemic and yet laid off many workers. The tension between profits, solvency, and employment needs a robust policy discussion.
Employment is a design problem. Which are focal industries that will support jobs? How do you create job security to ensure that the employees who work there will feel secure enough to spend in the country and support other jobs? If the employees come from other nationalities, they tend to remit to their home country if they feel their job or savings are not safe. This does not help the host country
If a country takes taxes or pension (and deducts this from the employee pay), the employee will expect services – health, safety, and pension that at least covers the cost of living. This question of pension has been a sticky issue for many socialist countries as the average life span grows, new health interventions are discovered to prolong life (but cost an excessive amount), and the money invested is not enough for the lifespan as more and more employees take early retirement. This situation is an economic problem and a foresight problem.
Why should retirement be 60 or 65? Why should it not be longer, especially as the one thing we lack is mentorship for younger workers? This situation falls under the “inclusive Aging Plan,” – a method to irradicate poverty levels for the elderly and something South Korea is experimenting with. As society evolves - we see also at the backend of COVID, a lot more senior people lost their jobs, and with this was extensive knowledge! A knowledge society cannot afford this gap. One of the reasons, for example, is why we still have not successfully returned to the moon since 1972.
Another issue is education. If future jobs are undefined (and we seem unable to predict them even five years ahead), how do we prepare the youngster for work? So, on the one hand, there is a skill discussion versus a knowledge discussion. This question is interesting as many large organizations invest heavily in skills (in fact, many young people say that what they learn in school is applied very sparingly at work). Yet, the friends they make, the skills they learn, and their work ethic may be something they take into the workplace. So should education be about the joy of learning and possibilities of opportunity rather than that ruthless focus on a career? And about resilience and financial acumen to plan for worse times? How many young kids have a bank account and learn to make enough money for their college education (think of the student loans in the USA)?
The whole education system needs to be revamped as it was developed with the industrial revolution and colonization in mind and has not evolved significantly. Are top 100 university kids smarter than others? I have not found this to be necessarily true, but the top 100 universities have priceless experiences, access to knowledge (old and new), and networks that money cannot buy! So your best opportunities come from tapping into your pre-existing networks – schools, universes, and workplaces!
Last (though there are many other points), education is an access problem. No, I am not talking about remote or online learning. That is content delivery– not education. Education is about shaping attitudes and behaviors; a side effect is the knowledge you learn (keep in mind a significant population knows content but may not have knowledge). So how do we create access? By choosing the best teachers, giving them the time, and not focusing on content but on critical thinking and experiences. We really need to change education. Of course, skills are part of education, but we are at an inflection point. As we have rapidly embraced virtual as our first priority was health during the global pandemic, it is time to think about what binds societies together. Global citizenship? The ability to create social ties (not virtual), the ability to read people? What about Gut instinct (something we like in founders), but we don't or can't teach it! We have an access problem. If a child goes through education with blinkers on, I need to be a doctor – he may miss the confluence of robotics, AI, and diagnostics and be unprepared for the new world that is emerging. So really, it is about access. But how many teachers are also allowed to experience these rich contexts? I do not see it in many Ministry of Education plans – which is a pity.
So employment is a wicked problem.