History is full of discussion of the risk of technological unemployment. A short history going back to the Luddites will illustrate that this risk has always been there, and that the fight against technological progress always has been lost in the sense that new technology has been implemented and used regardless. Therefore, the question is more how to embrace new technology and use the options provided by it, while at the same time try to ensure options for those who perhaps are less well positioned in the labour market. New technology can produce more efficiently, which will reduce the demand for labour in the years to come, unless new types of production or services – and by this also new jobs – will develop, which will be discussed further in Chapter 3.

This chapter will focus on the development of Big Data, the use of the internet and robots as new emerging trends (although some have been around for some time) with a stronger and faster development than previously, implying that classical production presumably will be wiped out and that in several areas the labour force – even if cost is moving towards zero – will not be able to compete with the speed and efficiency of new technology. Therefore, as historically, existing jobs will become redundant, but also presumably fewer new jobs will be created. This new development is a pressure not only on low-skilled jobs but increasingly also on high-skilled jobs within, for example, the financial sector, higher education, law and medicine. This also brings into question the option and possibilities of the hollowing out of the middle job section of the labour market, although this is still a risk (see also Chapter 5).

The sharing economy or the collaborative economy – there are many names for a new division of production between work and/or capital goods. Part of it is just the use of IT as a means of developing new market platforms to sell goods and especially services. Another is a way of sharing in order to consume less and be less in need of producing and buying new goods and services. If consumption is reduced this will influence the number of jobs. Sharing of jobs using new platforms – such as the development of IT, different types of consultancy, call-centres, accounting services, etc. – implies that only those willing to provide work for the lowest amount of pay will get the work. Further, jobs in many of these branches will not be restricted by national borders, but will be open for international competition. For some who expect to earn money by sharing (flats, cars, etc.) this will also open up a more precarious and unstable situation, thereby reducing economic and social security. Self-employment in a digital economy can thus also be a smokescreen for, in reality, being without income in a household – although not registered as unemployed – thereby reducing the value of unemployment figures.

For a long time there has been discussion on insiders versus outsiders in labour markets, e.g. about the possible impact of insiders’ demands for higher wages preventing outsiders from entering the labour market. Even though the labour market seems to be moving towards a dual labour market, this is presumably less so in the historical sense of insiders versus outsiders but more in line with the disappearance of jobs in the middle of the labour market, while some low-skilled jobs will remain although also highly threatened by the use of new technology. Furthermore, those left behind will run the risk of becoming working poor. In the area of high-skilled labour there will also be a reduction in the number of jobs. In the middle of the job ladder there might still be caring jobs – e.g. especially looking after children in day care where use of robots is less likely to reduce the number of jobs. In other service areas use of technology will also imply a reduction in the number of jobs. This chapter will outline possible changes based on an analysis of changes in job structure within selected European countries from within different welfare state regimes.

Many countries have already seen a decline in membership of trade unions and a weakening of employees’ organisations. This development will presumably continue to reduce the number of employees with membership of a trade union given the increase in the number of “self-employed” people using the sharing economy, short-term contract work, etc. Thus collective agreement as a stabiliser in the labour market – helping in ensuring a decent wage income in order to reduce the risk of becoming working poor – might be wiped out, implying a risk of more unstable labour markets and rising inequality in many countries. Thus, the stable relationship in many welfare states including organisations in the labour market is under threat. This chapter will look into this and the possible consequences thereof, including the issue of stability in labour markets.

If fewer people are employed in the labour market this will imply a risk of lower income for the public sector; further, dependence on the social security system implies significant pressure on its ability to finance the welfare state and to cover those who have previously been covered by employers’ social security contributions. If wage incomes fall then consumption will go down – as will overall economic activity. This will increase the need for new ways of redistributing income and consumption possibilities in many countries. Naturally, the use of new technology can imply the possibility of cheaper delivery of services, for example welfare technology may help in the area of long-term care; however, here also a reduction in the number of jobs will imply more segregated labour markets. The chapter will also include a debate on guaranteed minimum income as one possible way of approaching the problem. New technology will challenge existing ways of measuring societies’ development, as we will be able to have more consumer goods without this influencing economic growth.

This chapter looks into the possible consequence of new technology on inequality –not only economic inequality but also wider and different forms of inequality in relation to other spheres of society, including happiness.

The outsourcing of jobs to lower wage level countries has been one trend in many advanced welfare states. Another trend in recent years has been the significant movement of migrants and refugees around the world, especially towards wealthier societies. The movement of refugees might not be changed by new technology; however, migration towards especially low-skilled jobs might be reduced because there will be fewer of these jobs available. This, combined with the fact that many jobs could be performed at home via the internet, means that migration will perhaps be less significant than it used to be. This chapter will discuss possible trends and consequences thereof.