The report, authored by leading labor economist Professor Richard Freeman from Harvard University, released to mark International Workers Day (1st May 2015), also sets out a new solution to the rising trend of income inequality where rich workers and capital owners get richer and workers get poorer
According to Freeman's report, the solution is for workers to own part of the capital gained from the robots in order to benefit from the technologies threatening to replace them.
Professor Freeman commented:
"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."
To address the problems raised, the report sets out five key recommendations for driving employee ownership:
- Include robots and intellectual property in the valuation of companies and spread employee ownership across the whole company
- Drive up the proportion of workers' income from capital ownership rather than direct employment
- Establish employee ownership trusts to administer this ownership
- Enable more use of stock options as part of workers' pay - or enable workers to buy shares at lower values
- Government backing for driving employee ownership
The report argues that this shared ownership of robots and new technologies will also be good for businesses.
Businesses will only maximize the benefits of robot technologies if existing workers are comfortable with them and become highly skilled employees who can work alongside these machines. To create this culture, the IZA World of Labor report argues that firms throughout the world should embrace the shared ownership principles that companies such as Google and the UK's John Lewis have developed - also resulting in medium term benefits of better performance rates and productivity as well.
Professor Freeman concludes:
"Each country will have to choose the way that best fits it 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 wellbeing, 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."