Labor Apartheid: the next frontier of social inequality and the role of European Union

Maria Fernanda Brandão, Master's degree student in EU Law at UMinho
 ▪

 

Guiding the reasoning by the dialectic theory, in the perspective of Hegel and Marx, it is possible to contemplate the history of humanity as an inexhaustible class struggle. The conflict between dominant and dominated groups is one of the main legacies of the human action throughout the time. Thesis, antithesis, and synthesis, this seems to be the endless plot of the path taken by man.

The perspective of what is a ruling class is modified routinely over the centuries. In the last two, the polarization have been between the owners of the productive ways and assets and the wage-earning workers, which is, by the way, the feature of the capitalism and its intrinsic contradiction and, despite the conflict, the existence of both classes is necessary for the maintenance of the economic system.

However, several social transformations that occurred throughout the 20th century created new outcast groups in need of society’s attention for its integration. This was the case of women, in the search for effective equality in terms of labor rights, or the disabled and ethnic minority groups, and their notorious difficulty in employability. The State’s action, in all these cases, has been affirmative policies, such as the setting of quotas, subsidies and social integration campaigns.

However, the fourth industrial revolution sheds new light into these issues since a significant portion of the existing jobs is currently at risk of extinction due to the extreme robotization associated with the existence of artificial intelligence (AI). What can be seen, therefore, is a complete change of paradigm that places individuals of the most diverse shades on the same losing side, concentrating people of different races, genders, ages, social strata and schooling in the same group, deepening the inequality that has only skyrocketed since the welfare state collapsed in most parts of the world. This is what we call labor apartheid, due to the profound segregation of human beings from work and consumption caused by their productive unavailability.

In this chapter of a new class struggle, it seems that it is the humanity itself on the losing side of the ring. The speed in which this transformation is taking place may be on an unprecedented scale, placing on the shoulders of States the challenge of reconciling progress and social achievements already conquered. However, in an increasingly connected world, with large global production chains and great mobility of people and goods, the uncoordinated action of countries may turn the use of purely local solutions inefficient, echoing the urgency of adopting multilateral solutions, where the decisive role of the European Union resonates – once again.

Even though the inequality in the distribution of goods and wealth is something common in the history of civilization, the depth in which this phenomenon happens nowadays is impressive. According to Oxfam’s global report, in the year 2018, the 26 richest people in the world concentrated the same wealth as the poorest 3.8 billion. When all the billionaires in the world (2,153 people) are brought together, their wealth is equivalent to that held by 4.6 billion of the poorest people (60% of the world population)[i]. According to World Bank’s calculations, about 3.4 billion people live on less than US $ 5.50 a day, a level considered as the poverty line at low-middle income countries[ii].

However, an analysis by Forbes magazine points out that in the first months of COVID-19 epidemic crisis, while more than 38 million Americans lost their jobs[iii], in the same period the fortunes of American billionaires increased 15%[iv]. A study published in 2016 found that, between 1946 and 1980, the greatest income increase was found in middle and lower classes. On the other hand, between 1980 and 2014, the trend curve was reversed and most of income growth happen in the wealthiest part of population[v].

The State lost control of capitalism’s excesses and the globalization may be one of the causes. The flexibility it provides removes much of effectiveness of government’s distribution policy. A great money flow and large global production chains allowed companies to establish themselves in low tax burden countries, with good infrastructure and poor labor regulation. The migration of industries from developed to emerging countries, in a worldwide effort to reduce costs and expand profits, is a reality that sacrifices the power of distributive justice.

In this scenario, the fourth industrial revolution brings an intensive use of disruptive technologies, such as AI, nanotechnology, hyperconnectivity, internet of things, big data, and 3D printing[vi][vii], providing the creation of autonomous factories. Scholars say that the future of employment will be shaped by career opportunities that do not yet exist[viii] and since these jobs depend on complex technologies, it is estimated that they will be destined to highly specialized professionals[ix]. In addition, the speed in which these disruptive technologies get into market is impressive, turning the comparison to past anachronistic. Humankind was never able to replace so many people simultaneously as fast as this, what turns impossible for workers to adapt professionally[x].

A study published by the OECD in 2019 indicates that in the next 20 years half of the current human jobs could be replaced by robots, which might have catastrophic consequences for quality of life, drastically reduce the middle class and create generalized social disturbances[xi].

The emergency of this situation gives a new perspective to economic and social inequality since creativity and specialized knowledge will dictate career opportunities in the future. In other words, the new balance of labor supply and demand will turn the applicants for existing jobs into extremely qualified persons, regardless gender, social class, race, or country of origin. This is what we call labor apartheid, an economic picture imposed by the technological revolution and which will definitively remove a large group of workers from labor market due to their obsolescence or uselessness[xii]. In this circumstances, affirmative policies may be ineffective to respond to challenges ahead, and innovative solutions are debated in various parts of the world.

The least controversial solution, easiest to apply and, therefore, most quoted, is training. However, some obstacles are obvious. The first one is future´s uncertainty. If neither researcher knows how to define upcoming jobs, how can training be conducted in an assertive and effective way? The second one is career changing. It is never a straightforward process, as involves restart a professional path, welcome uncertainty, and spend more time on education. Not everybody has the drive to do so[xiii]. Finally, the third obstacle is time required for workers fully adapt. So, these difficulties tend to reduce the effectiveness of professional requalification programs.

Another solution is progressive and consistent reduction of work hours[xiv][xv]. Whether is a compulsory decrease in working time, more job offers will arise. This action might accommodate part of those workers who lost their jobs due to market changes. However, training difficulties may persist to remaining activities.

Another possibility claimed as a solution is the universal basic income [xvi][xvii]. According to its supporters, as companies invests in AI and other technologies, profit increase will follow job elimination. Therefore, the principle of solidarity claims that tax burden on these economic sectors should be enhanced, in order to keep a minimum of distributive justice, with a cash benefit program to all unemployed. However, the problem is how to finance it, given the structural problem that countries face in defraying social security systems. Since there is already a collapse of public accounts, it is difficult to imagine taxes as sufficient to deal with larger and permanently expenses, as keeping other State activities operational.

On a world scale, less industrialized countries tend to lose more jobs in the face of countries that owns ultramodern technologies. In this situation, the inequality gap between countries will be even deeper, since the more developed ones have greater capacity to assist their mass of unemployed with a universal basic income[xviii], which can eventually lead to an immigration wave in search of this social benefit. Moreover, no coordinated action between countries and high taxes imposition to finance the basic income might generate a flight of capital and companies to countries that have lower costs.

It is also possible to impose, through legislation, a reserved labor market for humans, but only for domestic sectors (not global competitive chains). In this case, national legislation should support prohibition or mitigation of actions that replace human labor for automated ones. This is the case, for instance, of cashiers or public drivers replacement. Forbid it will not worsen the economic situation of companies or create another collateral damage. It might reflect on price of things, at most, which is why, in these cases, political actions are always possible. However, this strategy would only delay the inevitable, due to undeniable advantages of AI[xix] .

Although, create anti-technological barriers could be an alternative to be used even in global productive chains or worldwide but only in critical situations and in sectors not subjected to automatic production.

Such solutions show the relevance of economy State’s intervention, job protection and maintenance of living standards, and it is vital, in a globalized environment, that actions take place in a multilateral context. This lesson is more intense in the European Union, which has experienced the freedom of circulation over the years.

The Treaty on European Union compels its covenants to seek alternatives to employment decline due to technological revolution. The preamble contemplates the need to promote “economic and social progress for their peoples, taking into account the principle of sustainable development and within the context of the accomplishment of the internal market and of reinforced cohesion and environmental protection, and to implement policies ensuring that advances in economic integration are accompanied by parallel progress in other fields”[xx].

In addition, Article 3 (3) TEU, talking about common market, specifies the need to search for full employment and social progress, major economic competitiveness, and scientific and technological development[xxi]. Since the dawn of robotization and decline of employment, it is necessary to accommodate technological advance, preservation of jobs and possibility of international competitiveness loss.

In legal field, maybe proportionality rule will be used as a theoretical compass. Considering it is a multi-causal process, there is no single action that compose social and economic interests in dispute.

Whether European Union’s legislation will be updated, Directive 2004/38/EC of 29 April 2004 should be remembered. It says that States do not grant care rights just in the first three months after citizen’s change of residence[xxii].  This mechanism exemplifies the difficulty to create protection instruments more amplified, confronting free movement’s ideal and potential rise of populist nationalism.

The Court of Justice of the European Union has already faced conflicts between free movement of people and guarantee of labor rights. For instance, cases Viking (C-438/05)[xxiii] and Laval (C-341/05)[xxiv]. In both situations, free movement were respected. However, the Court said that must exist equal treatment between national and international companies that currently work in the same productive sector[xxv]. And this should also be the understanding on minimum limits of human employment, hours, and benefits, so there are no violations of competition principle.[xxvi]

Accordingly to the Court of Justice interpretation, we could say that market reserve for humans and antitechnological barriers might come up against issues of economic and regulatory law and impact on freedom of movement and fair competitivity. Therefore, any deliberation or regulation on the matter should take place within all European Union States, since it is up to it regulate competition rules within the internal market[xxvii].

Despite the obstacles presented, the truth is that only countries multilateral cooperation will be able to oppose globalization’s excesses and provide a right balance between social and business interests. This is one of the greatest contributions of European Union, although it is necessary to deepen the connection between countries to deal with current and future problems that lie ahead. Only with people and countries cooperation, will political, economic, and social stability and reduction of inequalities be safeguarded.

Technological evolution brings great achievements for humankind, but it also broadens the gap between wealthy classes and those who will be considered expendable. In this perspective, the most profound challenge brought by technology seems to be the future of employment, most important pillar of consumer society. The predictions are disastrous. This is why the State’s presence is so necessary. The order is to integrate, not segregate. However, among various actions that are discussed, the major obstacle seems to be globalization fluidity of goods, turning any purely national solution into a fragile and innocuous one.

European Union once again shows us that is integration and solidarity that allows creation of effective actions capable of protecting the European social well-being and that there is no real solution outside multilateralism.

[i] See Inês Chaíça, “Os 26 mais ricos têm tanto dinheiro quanto a metade mais pobre da população mundial,” Público, January 21, 2019, access June, 4, 2020, https://www.publico.pt/2019/01/21/economia/noticia/ricos-50-pobres-1858751.

[ii] See World Bank, “Press Release no.o 2019/044 / DEC-GPV: Nearly Half the World Lives on Less than $5.50 a Day”(Washington, October 17, 2018), access June, 4, 2020, https://www.worldbank.org/en/news/press-release/2018/10/17/nearly-half-the-world-lives-on-less-than-550-a-day.

[iii] See “EUA com 38,6 Milhões de pedidos de subsídio de desemprego desde março,” RTP Notícias, May 21, 2020, acessed June, 4, 2020, https://www.rtp.pt/noticias/covid-19/eua-com-386-milhoes-de-pedidos-de-subsidio-de-desemprego-desde-marco_n1230696.

[iv] See Nuno de Noronha, “Bilionários dos EUA enriqueceram ainda mais com a pandemia COVID-19,” Sapo Lifestyle, May 22, 2020, acessed June, 4, 2020, https://lifestyle.sapo.pt/saude/noticias-saude/artigos/bilionarios-dos-eua-enriqueceram-ainda-mais-com-a-pandemia.

[v] See Filipe Duarte Santos, “Crescentes Desigualdades Sociais e Económicas. A Causa Não é o Neolítico,” Público, May 13, 2018, acessed June, 4, 2020, https://www.publico.pt/2018/05/13/economia/opiniao/crescentes-desigualdades-sociais-e-economicas-a-causa-nao-e-o-neolitico-1829717.

[vi] See Valeria Perasso, “O Que é a 4.a Revolução Industrial – e Como Ela Deve Afetar Nossas Vidas,” BBC News Brasil, October 22, 2016, acessed June, 4, 2020, https://www.bbc.com/portuguese/geral-37658309.

[vii] See Vesselina Ratcheva, Till Alexander Leopold, and Saadia Zahidi, “Jobs of Tomorrow: Mapping Opportunity in the New Economy ” (Genebra, January 2020), acessed June, 4, 2020, http://www3.weforum.org/docs/WEF_Jobs_of_Tomorrow_2020.pdf.

[viii] See Yuval Noah Harari, 21 Lições Para o Século 21, 1.a ed. (São Paulo: Companhia das Letras, 2018), p. 26.

[ix] See James Manyika et al., “Jobs Lost, Jobs Gained: Workforce Transitions in a Time of Automation,” December 2017, acessed June, 04, 2020, https://www.mckinsey.com/~/media/mckinsey/featured insights/Future of Organizations/What the future of work will mean for jobs skills and wages/MGI-Jobs-Lost-Jobs-Gained-Report-December-6-2017.ashx.

[x] See Manyka, “Jobs Lost, Jobs Gained…”

[xi] See “Automação Pode Acabar Com Quase Metade Dos Empregos Em 20 Anos,” Revista Época Negócios (São Paulo, May 21, 2019), acessed June, 4, 2020, https://epocanegocios.globo.com/Carreira/noticia/2019/05/automacao-pode-acabar-com-quase-metade-dos-empregos-em-20-anos.html.

[xii] See Harari, 21 Lições…, p. 37-38.

[xiii] See Harari, 21 Lições…, p. 37-38.

[xiv] See Maria Lopes, “Modernização e Tecnologia Deviam Reduzir Horário de Trabalho Sem Corte de Salário”, Público, May 15, 2017, acessed June, 7, 2020, https://www.publico.pt/2017/05/15/politica/noticia/modernizacao-e-tecnologia-deviam-reduzir-horario-de-trabalho-sem-corte-de-salario-1772285.

[xv] See Andrea Torrente, “Inteligência Artificial Promete Milhões de Empregos e Menos Horas Trabalhadas,” Gazeta Do Povo, November 13, 2019, acessed June, 7, 2020, https://www.gazetadopovo.com.br/economia/inteligencia-artificial-promete-milhoes-empregos-e-jornada-reduzida/.

[xvi] See UN Brasil, “COVID-19: ONU Defende Renda Básica Universal Para Combater Desigualdade Crescente,” May 6, 2020, acessed June, 7, 2020, https://nacoesunidas.org/covid-19-onu-defende-renda-basica-universal-para-combater-desigualdade-crescente/.

[xvii] See  Miguel Ángel García Vega, “Renda Básica Universal: A Última Fronteira Do Estado de Bem-Estar Social,” El País, June 17, 2018, acessed June, 7, 2020, https://brasil.elpais.com/brasil/2018/06/15/economia/ 1529054985_121637.html.

[xviii] See Harari, 21 Lições…, p. 37-38.

[xix] See Harari, 21 Lições…, p. 42-43.

[xx] See “Treaty on European Union (Consolidated Version)” (2016), accessed May, 21, 2020, https://euricando/resource.html?uri=cellar:9e8d52e1-2c70-11e6-b497 -01aa75ed71a1.0019.01 / DOC_2 & format = PDF.

[xxi] See “Treaty on European Union…” art. 3 (3).

[xxii] See “Directive 2004/38 / EC of the European Parliament and of the Council” (2004), article 24, (2), accessed June, 9, 2020, https://euricando/legal-content/ PT / TXT / PDF /? Uri = CELEX: 32004L0038 & from = PT.

[xxiii] See Judgment CJEU, Viking, 11 December 2007, Case C-438/05 accessed June, 9, 2020, http://curia.europa.eu/juris/showPdf.jsf? text = & docid = 71495 & pageIndex = 0 & doclang = EN & mode = lst & dir = & occ = first & part = 1 & cid = 3532590

[xxiv] See Judgment CJEU, Laval, 18 December 2007, Case C-341/05, accessed June, 9, 2020, https://euricando/legal-content/ PT / TXT /? Uri = CELEX: 62005CJ0431

[xxv] See Laval, recital 66.

[xxvi] See Laval, recital 56.

[xxvii] See “Treaty on the Functioning of the European Union (Consolidated Version)” (2012), article 3, (1), a and b, accessed May, 21, 2020, https://euricando / legal-content / PT / TXT / PDF /? uri = CELEX: 12012E / TXT & from = PT.

Picture credits: Wall art… by Pikist.

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