Beware of the "involution" of the labor force in the digital economy era——
The era of digital economy should attach great importance to employment policies
Cai Fang
The Fifth Plenary Session of the Nineteenth Central Committee of the Party put special emphasis on the development of the digital economy.
For the development of the digital economy to move forward in a healthy manner, there must be some full considerations.
What is the impact of the digital economy on jobs
The digital economy is a major area where new technologies are applied.
Since the beginning of the industrial revolution, people talked about the impact of technological progress on the industry, and there was such a saying-new technology destroys old jobs while also creating more new jobs.
This is still being said today, but most people are not convinced.
Why?
It does not mean that it destroys old positions and does not create new ones, but for the following reasons:
First, the jobs destroyed by the new technology are not the same group of workers as the jobs created.
Applying new technology means replacing labor with capital, and the application of new technology will have new demand for talents, so destroying some jobs will naturally create some new jobs.
However, these positions replaced and destroyed and those created by new technologies require different people. They are people with different human capital and skills.
So even though jobs are created for some people, those who lose jobs may not be able to enter new jobs.
In the process, there will be unemployment or underemployment problems.
Second, the number of destroyed jobs is greater than that of newly created jobs.
The quality of newly created jobs may be higher, but not necessarily more in number than destroyed jobs.
Third, the job after the transfer is of lower quality and poorer treatment than before.
Usually, after people are transferred, someone will find that their salary and the quality of employment have deteriorated.
Although some people will improve, in most cases it is worse than before.
The above-mentioned reasons have caused actual labor market problems and employment difficulties. This is also the key to discussing labor market and employment transition issues.
What we want to explore is how to enable the development of new technologies and the development of the digital economy to create more and higher-quality jobs, and to enable those displaced workers to find better jobs again.
Must pay attention to the phenomenon of labor "involution"
With fewer jobs, people always have to go somewhere. So, where did they go?
We look at the number of labor in the three industries. Agricultural labor has been declining for a long time. This is an inevitable law. The proportion of agricultural labor in any country is declining year by year.
At the same time, the growth rate of our secondary industry employment has not been so fast as early as the 1990s, and it has absolutely declined in the past 10 years.
Where are these people who have been reduced?
In most cases, they will not return to agriculture. Agricultural labor productivity is too low and the pay is too low, so most of them go to the tertiary industry.
Of course, it is not going to a financial institution to engage in a skilled job.
In most cases, they went to the service industry, mainly in the life service industry, that is, in the service industry where labor productivity is relatively low.
Therefore, we see that the number of labor in the tertiary industry has increased sharply, agriculture has declined, and manufacturing has also declined.
However, what is the labor productivity status of these three industries?
Agricultural productivity has increased, but it is still significantly lower than that of the secondary and tertiary industries. At the same time, the labor productivity of the tertiary industry is significantly lower than that of the secondary industry, especially lower than that of the manufacturing industry.
It is precisely because of the decline in the proportion of labor in the manufacturing industry and the rapid increase in the proportion of labor in the service industry that the labor productivity of the service industry has further declined.
In this case, the higher the productivity of the department, the more technical support, the faster the increase in labor productivity, and the slower the increase in productivity in the previously low labor productivity department.
There is a word called "involution", which is suitable for use here.
When this part of the labor force used to work in the manufacturing industry with relatively high labor productivity, they earned the wages of a middle-income group.
When they are forced to return to the tertiary industry and labor productivity becomes low, the involution of the labor force occurs.
More people are concentrated in sectors with relatively low productivity, which may even cause a further decline in overall productivity.
Although the jobs are still there, the productivity of "newly created jobs" is lower than that of "destroyed jobs".
This is not the original intention of our digital economy development. We must pay attention to it and avoid further development.
Employment must be a separate policy requirement
We still need to focus on employment in developing the digital economy.
In the development of anything, employment must be given as a separate policy requirement in order to do a good job.
Therefore, I would like to make some policy suggestions for promoting employment in the digital economy era.
First, in the digital economy era, a higher version of the employment priority policy should be created.
Generally speaking, when we put forward the employment priority policy, we can call it 1.0; later we put forward a more active employment policy, which we can regard as 2.0; now, technological progress and changes in the industrial structure are accelerating, and new and updated policies are needed. For a good move, we must propose the employment priority policy 3.0 in the digital economy era.
How did our overall productivity increase in the past?
On the one hand, it is certainly by technological progress, but the fastest and most important path used to rely on labor from low-productivity sectors (agriculture) to high-productivity sectors (non-agricultural industries), this process is the re-allocation of resources, but also a kind of " Pareto improvement", this is welcomed by everyone.
Generally speaking, the rural labor force chooses to go out to work, and he earns more money than he earns on the land, and he gets the benefits.
In this process, the department where (labor) left is low in productivity, and the department in which it entered is high in productivity. The overall labor productivity is also improved, and there is agreement between the micro and macro perspectives.
However, with the decrease of the rural population to be transferred, one of the main ways to improve labor productivity in the future is no longer resource relocation or "Pareto improvement", but "creative destruction".
That is, the increase in labor productivity cannot rely on all enterprises to achieve productivity improvement simultaneously, but can only rely on the survival and development of high-productivity enterprises, and the low-productivity enterprises withdraw, shrink, or even die.
In this process, "creative destruction" means that departments with high productivity can be recombined with new and more production factors, and the overall productivity is improved.
At this time, in the productivity increase, there are both developed market entities and eliminated market entities, so it is no longer a "Pareto improvement."
In the entire process of increasing productivity, there will always be people, companies, and production capacity that will be damaged and destroyed by competition.
However, this process can destroy production capacity and enterprises, but cannot destroy "people", because labor is carried by people, and people cannot be destroyed.
So how to promote employment and protect people is the responsibility of the government.
Under the conditions of higher technological development, such as the development of digital economy, this responsibility is heavier and more demanding.
Therefore, a higher version of the employment priority policy is needed to uniformly solve the problems of total employment, employment structure and employment quality.
Second, the development of the new economy will create new forms of employment, and there will be disharmony between the new forms of employment and the traditional social insurance model.
In particular, the urban job market is inherently "dual". In the past, the coverage of flexible employment, migrant workers, laid-off and re-employed people, and part of the newly-growing labor force was not high.
Under the new employment situation, more flexible forms of employment have been created, such as "riders" who deliver express delivery. This form of employment is even more distant from the original social security relationship.
How to reconstruct a new type of social security method and model to adapt to the new form of employment is a problem that needs to be solved urgently.
The new employment model is still dominated by migrant workers. The proportion of migrant workers in urban employment is already quite high. Therefore, the first and most important way is to allow them to settle in cities and obtain the status of urban residents. There is no difference with urban employment groups, this is a fundamental way out.
The third policy recommendation is to explore the form of the labor market system in the digital economy era.
The labor market is a market mechanism for the allocation of human resources.
Human resources are a special element.
The particularity of the labor force, a production factor, is that its carrier is humans, not objects, and humans are both a means of labor and the goal of development.
Other material elements can survive the fittest, but humans cannot. Humans need to be protected under any circumstances.
Therefore, even in countries and regions with a more laissez-faire market economy, the allocation of labor resources is also configured in a combination of two ways.
One is the market supply and demand mechanism, which uses wages to adjust the allocation of labor; the other is the labor market system, including the minimum wage system, labor contract system, labor law enforcement, and the role of labor unions, all of which are indispensable.
This method will have new requirements in the digital economy era. One is to keep pace with the times and adapt to the development of new technologies; the other is to specifically target new employment patterns and allow workers to be protected by the labor market system. .
In recent years, the minimum wage system has played its due role as a labor market system, and the labor contract system has also played its due role in protecting workers, not the other way around.
Some people have always believed that the labor market system was established prematurely, the minimum wage system has reduced employment, and the labor contract system has increased the constraints on the dismissal of workers by enterprises, and has increased labor costs.
This understanding is wrong. The increase in labor costs is, in the final analysis, a decrease in the working-age population, which is the inevitable result of the disappearance of the demographic dividend.
In the era of digital economy, technological progress and applications are ever-changing, and industrial structure adjustments are changing with each passing day, which means that skills are also changing rapidly.
Today, it took you a few years to learn a seemingly good skill, find a decent job, and get the expected salary, but maybe this skill will be replaced by a robot soon, and the risk of losing this position is very big.
So what to do?
In the final analysis, it depends on education. First of all, general education is to improve people's cognitive ability, improve people's learning ability and adaptability to the labor market. This is more important than a single skill.
And this cannot be obtained from vocational education and vocational training.
Therefore, our general education and vocational education must be balanced, and the two must be integrated. It cannot be said that vocational education should focus on skills. There must be general education and the cognitive ability of the educated must be improved. Otherwise, it will be difficult to adapt to the ever-changing labor market.
Human capital is the key, and human capital must also conform to the principle of demand orientation.
When people talk about the digital economy, they often emphasize the aspect of technological innovation. However, to embrace the digital economy, institutional innovation may have higher requirements, heavier tasks, and more difficult to accomplish.
From the very beginning, we must pay attention to how to adapt to this new wave of technological revolution in terms of policies, otherwise it will be difficult for the digital economy to develop in a healthy manner.
(The author is a member and researcher of the Chinese Academy of Social Sciences)