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This article was published on May 19, 2023

5 ways Europe can reduce the risks of AI replacing jobs

Kill all robots?


5 ways Europe can reduce the risks of AI replacing jobs Image by: Rebrand Cities (edited)

It seems barely a day goes by without a new report of artificial intelligence replacing jobs. On Thursday, BT added the latest bad news, when the UK telecoms giant announced plans to replace 10,000 staff with AI.

Across Europe, predictions on automation’s effect on jobs vary wildly, but all agree that major changes are inevitable. With the impact already being felt, the need for government action is becoming urgent.

Here are five interventions they can take.

1. Retraining the workforce

The concept of a “job for life,” was disappearing even before AI’s relentless march into the workplace. Increasingly, we’re becoming accustomed to refreshing our skill sets.

Government policies can ease the transition. Italy, for instance, launched a new fund this week to help retrain workers. The country has allocated €10 million to boost the skills of people whose jobs are at risk of automation.

It’s not the biggest funding pot, but it’s a start.

2. Adapting education systems

As well as upskilling the current workforce, governments need to prepare students for the future of work.

To support them, analysts have recommended a variety of education priorities. They range from STEM skills for jobs in tech to soft skills that will make people adaptable throughout their working lives.

One popular approach is prioritising “21st-century skills,” such as creativity, critical thinking, and communication. Another is creating highly specialised training. Finland, for example, has launched a free online course on AI, because if you can’t beat the robots, you might as well work with them.

3. Wage supplements

Technology doesn’t always replace jobs; sometimes, it just cuts earnings. The rise of Uber, for instance, didn’t reduce the number of taxis on our streets, but it did push down the wages of salaried drivers.

One way to mitigate a loss of earnings is by improving wage supplements. The idea is to “make work pay” for people on low-paid jobs, which can offer little more than subsistence-level welfare benefits. Providing supplements — such as better child care, higher income tax credits, or wage insurance for earnings lost to automation — can make their pay go much further.

It won’t come cheap, but it could still be cheaper than financially supporting unemployed people. It could also provide more fulfilment and societal benefit.

4. “Good job” creation

If workers are displaced by AI, governments could help them get “good jobs” to replace the ones they lost. 

Harry Holzer, a former chief economist for the US Department of Labor, argues that “good jobs” should pay well, offer advancement possibilities, and provide some security.

“Tax and subsidy policies for ‘good job’ creation can encourage employers to improve job quality,” Holzer said in a blogpost for the Brookings Institution. “Mandates on employers can be effective as well, though such mandates must not be so severe and costly that they speed up employer incentives to automate (like a $15 minimum wage might do in low-wage regions of the US).”

5. Universal basic income

No list of responses to automation would be complete without a mention of Universal Basic Income (UBI).

It’s a simple concept: every citizen gets a fixed payment, paid equally by the government, that’s enough to support their basic names. Proponents argue that it could end poverty, improve well-being, and redistribute wealth, while critics warn that’s too expensive, heightens inequalities, and removes incentives to work.

Love it or hate, the concept is gaining traction across Europe. A recent poll by YouGov found strong support in all seven European countries surveyed. Respondents in Germany, Spain, Italy, and Great Britain were all more in favour of UBI than against it. Sweden was split, while France and Denmark expressed more opposition.

It’s far from the only social welfare option, but it merits a spot on this list. If you have a better idea — or just want to slate ours — let us know via the usual channels.

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