Britain set to become world leader in unemployment technology

1 April 2016

By Neil Patrick

As technology continues to transform jobs, a new government initiative will virtually eliminate jobs in the Jobs Centre network across the UK.

The flagship programme called ‘Care4Jobs’ will massively reduce staffing in job centres and in some centres eliminate them completely. Touch screens which automatically connect jobseekers’ social media accounts with suitable employers are being used to help people find work faster than was ever possible before. Because employers and jobseekers are now both using social media every day, the scheme was described as being a “no-brainer” by Jeremy Twonkington-Smyth, Under Secretary of Work for State and Pensions. He said:

“Britain has a long and proud history of world-leading innovation in the delivery of public services. We are determined to ensure we remain committed to the vital services we provide for job-seekers and employers. Our pilot study carried out in Grimsby, a northern town I hope I never have to visit, showed that the automated social media connection of employers and job-seekers had an immediate impact on the time taken to locate suitable jobs. This has resulted in a rapid decline in the number of unemployment benefit claimants. Many have already found jobs in Starbucks, McDonalds, Asda and other leading high quality employers who have embraced the digital and social media world. Some claimants have simply vanished completely which is a mystery we have set up a sub-committee to look into. ”

The use of this new technology in Job Centres means that the costs and difficulties of maintaining staffing levels are significantly reduced.

“We inherited a massively bloated and unproductive department from the previous government and have been working hard to rectify this. We have always had problems with staff in job centres. Some take several days off each year claiming to be sick, others take far too long to get their work done.”

Not only does this innovation increase productivity in job centres, it is enabling unemployed people in the UK to become part of the new ‘global gig economy’:

“We want to future proof our services and the use of these televisual screen thingies connected to the world wide interweb, means UK job-seekers can find jobs all over the world. Unemployed people in Britain have amassed many skills much sought after overseas. More than 20 have already secured work in dynamic overseas economies like Brazil, Colombia and Romania.”

Thanks to this innovative new scheme, Barry
 Clunge, 41 from Stockport has already found
 a new job working part-time in sunny Madrid.

The programme to automate job centres has cost £3.4bn and Mr Twonkington-Smyth said this was an excellent investment:

“This technology will establish Britain as a world leader in unemployment. Because technology works so much better than people, we will see both a reduction in unemployment claims and faster hirings. Best of all, the costs the unemployed impose on hard working families will fall dramatically.”

When asked about the forecast 28,000 redundancies in job centres, he was upbeat:

“We sincerely regret that a number of valued colleagues in our job centres can no-longer be paid for their work. Some will choose our community service option, where they can still attend the job centre as usual and work on a voluntary basis. I know many care passionately about helping people find work, and this will enable them to continue with their valuable work and continue to find personal fulfilment.”

“Those who choose not to take up this attractive option thanks to their excellent skills will be much in demand by other employers. Their skills such as working with people with financial, mental, drug and alcohol problems will be much sought after by all sorts of employers from call centres to retail.”

The Think-tank on Work and Technology (TWAT) said, “Our studies have shown that this sort of work is carried out much faster and more reliably by IT systems than people. Our research found that over 70% of employers prefer to use technology to automatically select candidates rather than having people manually review applications. The savings for businesses will be considerable.”

The technology for the programme has been developed by tech entrepreneur, Josh Jones, founder and CEO of Govetech Systems, an innovative IT developer which Josh founded in 2014 with a young entrepreneur grant of £1.2m from the EU Innovation Fund.

He said: “We are delighted with the success of the Care4Jobs platforms. This sort of system has many applications and we are already working on a further system which will enable the armed services to largely avoid the need to deploy troops into conflict zones. Instead they will use a combination of gaming technology and social media to connect with and then invite adversaries to fight them online. It will save billions of government spending on defence and enable the reduction of already overstretched armed forces troops and support staff.”

Josh Jones, 28, dynamic young entrepreneur
and CEO of Govetech Systems

“Enquiries from oversea governments have been coming faster than we ever thought possible. We are already in discussions with government representatives from Greece, Russia and most exciting of all the United States. Excuse me, I have to take this Skype call from my stock-broker.”

The opposition spokesperson on Work and Jobs, Miranda Trellis MP said:

“This is a cruel and uncaring government that is cynically attempting to export unemployment. Thousands of families will be devastated by this move. We are liaising closely with the Union for Technology Workers’ Employment Rights and Policy Unit (UTWERPU) to organise a protest campaign to force the government to rethink this regressive strategy which will bring misery to people already deprived of opportunities. Sorry, I’m late for an equality and human rights committee meeting with JC. Can I go now?”

Who will take ownership of the jobs crisis?

By Neil Patrick

My recent posts have talked about the impact of technology on jobs. But this is far from the only threat to employment and a jobs recovery in the west. Off-shoring is a major progenitor of the jobs crisis. And the biggest problem with off-shoring is that no-one thinks it's a problem....except those who suffer its consequences and can do nothing about it.

The jobs crisis is real. The World Bank certainly thinks so as you can see here.

The problem is that no-one wants to take ownership of it. Just like the old saying, “Success has many fathers, but failure is an orphan”.

Empires have a habit of crumbling...

Governments have had an easy ride until now. Provide some tax-breaks and incentives to business here, some support for the unemployed there. Survive some rough and tumble with trade union negotiations without too much alienation of the electorate.

None of these things are comparable to the systemic collapse of jobs we now have to deal with in Europe and North America.

Thus, nothing that has gone before has equipped anyone in government with the skills and tools required to solve this problem.

And worse, big business can no longer be relied upon to act as a committed ally in the struggle. Globalization and off-shoring mean that the win-wins that were previously available for governments who acted benignly towards big business have disappeared. Permanently.

And this is why governments must rethink their relationships with big business.

Businesses drive to make the most profit they possibly can. Provided they stay within the law, no holds are barred. That’s the very nature of capitalism and a free market economy.

Big businesses think and act globally. But governments and citizens naturally enough think nationally and locally.

It is this mismatch in scale and geography which is at the heart of the problem.


Offshoring is a genie let out of the bottle

About 35 years ago, western firms started sending low skilled manufacturing work abroad on an ever increasing scale. By the late 1980s this was well established. And it grew. And grew. This mass-migration of jobs was overwhelmingly in one direction: away from rich countries to places where workers with adequate skills were much cheaper.

Shanghai - plenty of jobs here

Whether openly stated or not, lower labour costs were almost always the biggest driver. At first. For many firms, their survival was at stake, since new competitors were undercutting them on price. This usually involved closing plants in America and Europe and moving production to new factories in China, Mexico, Taiwan, Thailand, or Eastern Europe.

The most commonly cited benefits of off-shoring were fourfold:

• For workers in low-cost countries it would provide jobs and rapidly rising standards of living.
• Rich-world workers would be able to leave the dreary work to someone else.
• For consumers, they’d be able to buy goods at much lower prices than if production was onshore.
• For companies, lower labour costs would bring higher profits.

The trouble is that whilst these are all good things in small doses, what happens when the scale of the activity becomes so great that the migration of jobs elsewhere exceeds the ability of the domestic economy to create new ones at home?

Who cares that they can buy a new TV cheaper than ever before, if they cannot even afford to buy food or fuel?



The jobs are never coming back – even Steve Jobs thought so…

Off-shoring from West to East is now a major creator of job losses in rich countries. And not just for the less skilled, it’s now devastating the middle classes too.

US jobs reduction mirrors off-shoring

When Barack Obama joined Silicon Valley’s captains of tech for dinner in California in February 2011, each guest was asked to come with a question for the president.

As Steve Jobs of Apple spoke, Obama interrupted him with a question: “What would it take to make iPhones in the United States?”

Not so very long before, Apple had boasted that all its products were made in America. Today, few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold the previous year had been manufactured overseas.

"Why can’t that work come home?" Obama asked.

Jobs’ reply was unambiguous. “Those jobs aren't coming back,” he said.

Jobs' answer revealed the attitude at Apple and most global businesses. It isn’t just that labour is cheaper abroad. Rather, Apple’s executives believe the vast scale of overseas factories , their flexibility and industrial skills have so outpaced their American counterparts that “Made in the U.S.A.” is no longer a viable option for most consumer products.



Government thinks big business is its friend…not anymore

Apple is one of the best-known, most admired and most imitated companies on earth. In 2011, it earned over $400,000 in profit per employee, more than Goldman Sachs, Exxon Mobil or Google.

However, what vexes Obama, economists and policy makers is that Apple and many of its high-technology peers are not nearly as committed to creating American jobs as the previous generations of US industrial giants were.

In its early days, Apple didn't look much beyond its own backyard for manufacturing solutions. A few years after Apple began building the Macintosh in 1983, Jobs bragged that it was “a machine that is made in America.”

But by 2004, Apple had largely turned its back on the US and moved to off-shore manufacturing. Central to that decision was Timothy D. Cook, who replaced Jobs as chief executive in August, 2011, six weeks before Jobs’s death. Most other American electronics companies had already gone abroad, and Apple, which at the time was struggling, felt it had to seize any advantage it could find.

In part, Asian manufacturing was attractive because the semiskilled workers there were cheaper. But that wasn’t the main thing that attracted Apple.

For technology companies, the cost of labor is minimal compared with the expense of buying parts and managing supply chains that bring together components and services from hundreds of sources and suppliers. And as automation and AI inexorably increase, so the labour part of the equation becomes even less of a factor.

For Cook, the focus on Asia came down to two things. Factories in Asia can scale up and down faster and Asian supply chains have now surpassed what’s possible in the U.S. The result is that much of America’s manufacturing capacity has become largely obsolete. American manufacturing relative to Asia is now not unlike the Soviet Union was relative to the west in the Cold War era.



How many Apple’s are needed to make one General Motors? 10 actually…

Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s.

“Apple’s an example of why it’s so hard to create middle-class jobs in the U.S. now,” said Jared Bernstein, formerly an economic adviser to the White House.

“If it’s the pinnacle of capitalism, we should be worried.”

This used to be US car factory - today, it's a shopping mall

Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.

A foreman immediately roused 8,000 workers inside the company’s on-site dormitories. Each employee was given a biscuit and a cup of tea and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.

“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”

Similar stories could be told about almost any electronics company — outsourcing has become common in hundreds of industries, including accounting, legal services, banking, auto manufacturing and pharmaceuticals.



So who wants to own this problem?

Apple’s decisions reveal why the success of some prominent companies has not translated into large numbers of domestic jobs. “Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice,” said Betsey Stevenson, formerly the chief economist at the Labor Department. “That’s disappeared. Profits and efficiency have trumped generosity.”

Companies and other economists think that notion is naïve. Though Americans are among the most educated workers in the world, they say the government has stopped training enough people in the mid-level skills that factories need. Clearly education alone is not enough to solve the problem.

To thrive, companies argue they need to move work where it can generate enough profits to keep paying for innovation. Doing otherwise risks losing even more American jobs over time, as evidenced by the legions of once-proud domestic manufacturers, including GM and others that have shrunk as more nimble competitors have emerged.

“We sell iPhones in over a hundred countries,” a current Apple executive said. “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.”

So business says it's not their problem and government doesn't know how to solve it. And just like two squabbling children, neither will accept any responsibility. Let alone ownership.

And that’s the crux…business will keep on doing what business does, chasing profits. And government will keep on doing what government does…

This may be the biggest problem facing North America and Europe today, but no-one wants to own it.



Some information in this post was taken from this article in the New York Times: LINK