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The nature of work is changing. The welfare system needs to respond to employment changes brought on by the growing use of robotics in manufacturing and digital technologies (the 'fourth Industrial Revolution'), the gig-economy, and New Zealand’s transition to a low-carbon economy. The magnitude of these changes cannot be predicted with confidence, but major job losses and considerable structural change in the labour market are virtually certain. Technological advances represent a huge economic opportunity but will also be highly disruptive for many workers. As a nation, we must be prepared to reinvest some of the gains from the new economy in ensuring the disruptive negative side of these changes is not borne unfairly by those whose skills and job opportunities are in decline. This requires an active response by governments as well as employers.
The Government has significant initiatives under way to respond to the future of work, including the broad work programme of the Future of Work Tripartite Forum, and has established the Just Transitions Unit in the Ministry of Business, Innovation and Employment (MBIE). It is important this work continues and the outcomes and findings inform the ongoing development of the welfare system.
The future of work raises major questions around the mechanisms that deliver income to the population of a nation. The current social security system is based on paid employment as the primary mechanism for providing income, augmented by income from the state through the welfare system when required. The issue of a citizen's wage or universal basic income was raised in consultation hui and submissions made to us.
Views differ about universal basic income systems. Some argue that, in the future, traditional paid employment may not be sustainable as the major income source for people, so other mechanisms, including and beyond tax transfers, will need to be developed (Standing, 2009).
Others question whether a universal basic income could deliver enough income to those in the most need, especially under the current tax system (Fletcher, 2011; Stephens, 2019). This important, and ongoing debate requires a clear understanding of what an adequate income is and the future role of work. The Welfare Expert Advisory Group recommends a mechanism for establishing what an adequate income level is (see recommendation 25 in chapter 7, key recommendations, page 115).
To be prepared for an uncertain future of work, the welfare system needs to provide employment services that are effective in enabling transitions. Displaced workers (or 'at-risk' workers) need dedicated support, including retraining and skill-enhancement opportunities and other ALMPs, as well as easy access to income assistance that supports them through the transition. We see these supports as desirable even without the drivers of a changing nature of work.
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