Dealing with the dark side of digital disruption

There is a dark side to digital disruption and the growth of ‘sharing economy’ business models such as Uber, according to Transport Workers Union (TWU) national secretary Tony Sheldon.

In the case of Uber not only is the income of taxi drivers being eaten into but the service’s contractors are themselves often driving part-time in order to supplement the wages of their full-time job, the union leader said today.

While new business models and emerging technologies such as 3D printing and artificial intelligence can deliver significant productivity gains, but this isn’t necessarily reflected in the wages and working conditions of employees.

“This is the great challenge of digital disruption – how do we capture the benefits of higher productivity, higher income and less working time but avoid the worsening inequality that previous technology revolutions have wrought?” Sheldon said in remarks prepared for an event on digital disruption held by think tank PerCapita.

The choices are either a form of “digital Work Choices” — referring to the wildly unpopular industrial relations program pursued by the Howard government — or “harnessing innovation in a way that spreads prosperity”.

“Perhaps the most important step is to balance market power across society – across employees, contractors, small business and big business – and to retain a strong safety net for those displaced by technology,” Sheldon said.

“This requires not just a set of minimum rights, but the renewed application of community values across markets.Individual rights must be balanced with community ones.

“Much of our public debate focuses on the freedoms of businesses to organise as they see fit, or the freedoms of self-employed contractors to negotiate their own conditions.But we mustn’t forget the freedoms of workers to enjoy kids’ birthday parties, or local footy grand finals, or school working bees.”

There is a need for Australia to maintain a strong social net, the unionist said, including a decent pension, liveable Newstart payments, universal free healthcare and comprehensive superannuation policies to help workers accumulate savings.

Paying for that safety net requires a “reasonable contribution on the part of the companies that are profiting so much from the digital revolution,” Sheldon said.

“In the worst cases, these companies and their apps are ripping through the economy while ripping communities apart.Disruptive firms need to be accountable for the labour markets and supply chains they create, and the impact of these on communities.”

Sheldon cited as an example Google’s payment of $11.7 million in company tax while booking over $2 billion of income through advertising in Australia.

“Disruptive technology companies need to be good corporate citizens,” Sheldon said.

“They need to think through the consequences of their innovations on the labour markets they disrupt, and work with employees, contractors and governments to ensure a framework for decent pay, rights and conditions.”

The Turnbull government’s innovation policies “contain nothing about ensuring the benefits of the digital revolution are spread fairly”.

Opposition leader Bill Shorten has been making progress on “striking the right balance” but Sheldon criticised Labor’s new innovation plan, released last week, as lacking when it comes to helping workers displaced by disruption.

Copyright © 2015 IDG Communications, Inc.

Shop Tech Products at Amazon