A new generation of serfs could be created if employers don’t take more action to create shared ownership of companies and technologies, warns Richard Freeman (Harvard University) in a new IZA World of Labor article. His suggested solution also addresses the rising income inequality: Workers must own part of the investment gained from robots. This will enable workers to benefit from the technologies that threaten to replace them:
“Without ownership stakes, workers will become serfs working on behalf of the robots’ overlords who own the companies and corporate capital. […] If human workers own a stake in the capital gained from the technologies that are changing the world of work, they will be provided with a steady stream of income and more inclined to accept increasing robotization of the workplace.”
The article sets out five key recommendations for creating employee ownership:
- Spreading employee ownership across the whole company by including robots and intellectual property in the company valuation
- Increase the proportions of workers’ income through capital ownership rather than direct employment
- Create employee ownership trusts to manage ownership
- Support more stock options as part of an employee’s pay package, or allow workers to buy shares at lower rates
- Government support for the creation of employee ownership
The IZA World of Labor article argues that the establishment of shared ownership of robots and new technologies will also help businesses maximize on the benefits of robot technologies. If workers are comfortable with them and become a highly skilled workforce alongside machines, this will also result in better performance rates and increased productivity.
Freeman concludes:
“Each country will have to choose the way that best fits to spread worker ownership and capital so as to give a stream of earnings that are changing the world of work. With appropriate policies, the higher productivity due to robots can improve worker well-being, by raising incomes and creating more leisure time. To benefit from this, workers need to own the capital of companies rather than rely on government redistribution policies.”
The article attracted international attention in leading papers like Süddeutsche Zeitung (Germany) and El Mundo (Spain).