Canada should consider radical changes to its social safety net as the country faces the loss of up to 7.5 million jobs to automation in the next 10 to 15 years, says a new study from a think tank at the University of Toronto.
Even people in high-income jobs won’t be spared, as automation will reduce the demand for doctors, lawyers and engineers, among others, the study's authors say.
The report, penned by Sunil Johal and Jordann Thirgood of the Mowat Centre at U of T’s School of Public Policy & Governance, says Canada’s social policies and programs are “woefully inadequate” to deal with such a massive change in the labour market.
The report sees social risk to Canada if policies don’t change. Automation, combined with other trends in employment, is “creating a growing number of workers with little or no attachment to Canada’s social architecture,” the report said.
“Autonomous vehicles are already on the road, robo-advisors are dispensing financial counsel and even lawyers and reporters are starting to see automation take over routine functions.”
— Sunil Johal and Jordann Thirgood, "Working Without a Net," Mowat Centre
Co-author Johal said the study’s projections found a broad range in the number of jobs that could be lost — 1.5 million at the lower end, and 7.5 million at the high end. That amounts to between 8.3 per cent and 41 per cent of the 18 million jobs in existence in Canada today.
“It’s a fairly broad range, but … even if you take the low end of that, over the next 10 to 15 years that’s a lot of people,” Johal said in an interview with University of Toronto News.
He called the situation a “game changer” for employment.
The report lays out a number of possible policy responses. The first one on the list is "flexicurity,” a Danish innovation under which workers retain up to 90 per cent of their income after they lose a job, and are given access to training and skills support. The result is a labour market that works very differently from Canada.
“It’s much easier for Danish companies to hire and fire people – up to 25 per cent of Danes in the private sector switch jobs every year,” Johal said.
“In a world where more disruptions are happening more quickly, we would argue the Danish model is much more nimble and supportive and much more in-tune with the 21st century labour market than Canada’s model, which you could characterize as a very good model in the 1960s but not such a good model in 2016.”
The report floats the idea of "portable benefits" that workers in the sharing economy, such as Uber drivers, would be able to take with them from one job to another.
The report also considered the idea of a basic income, which many other experts have suggested could be a way to address job loss due to automation.
But the Mowat Centre report argued that a basic income for all would be “prohibitively” expensive, costing $500 billion annually if it was set at $15,000 per person, “or nearly double all federal government expenditures.”
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