The union movement and superannuation industry must act to shore up rights for workers in the gig economy if the nation’s enviable retirement savings system is to survive the advent of the fourth industrial revolution.
That was the commonly held view among a panel of stakeholders and experts who discussed the topic “The impact of the changing workforce on super, retirement and the wider community” on Wednesday at the Conference of Major Superannuation Funds 2018, being held in Brisbane on March 14-16.
World Economic Forum executive committee member and head of society and innovation Nicholas Davis encouraged the gathering of super fund trustees to feel empowered that they are in a position to have a positive influence on how the emergence of the gig economy will affect their members.
“The Australian economy is shifting on a fundamental level,” Davis said. “But it’s a myth that this is something that is just coming at us from Silicon Valley that we have no control over…Super funds in particular can play a powerful role in defining how the workforce is reshaped.”
The gig economy refers to the growing number of workers who earn a living via companies that never employ them – for instance, Uber drivers – and thereby never get access to the benefits of more traditional employment such as sick leave, holiday pay, or the superannuation guarantee.
Davis said that although only about 1 per cent of Australian workers are part of the gig economy, this was expected to increase dramatically in the years ahead. He also noted that there are lessons to be learned from observing the problem of rising income inequality in the US, where 16 per cent of workers are now in non-standard employment contracts.
He said it was important to think about how new technologies might augment existing jobs, rather than just automate them, noting that in some US cities hit hard by the collapse of the domestic car-manufacturing industry, about 50 per cent of displaced workers never re-entered the workforce.
“We need to think about how the opportunities that come with the fourth industrial revolution can be spread more broadly…and I see a role for super funds and unions in that conversation,” Davis explained.
Impact on low-income workers
He said that while it is impossible to predict what the future workforce will look like, super fund trustees should ask questions such as: How will benefits be realised and distributed? Who will be worse off? And how might technology advancements help us become more human, not less?
“Technology is not neutral,” Davis said, as he urged delegates to remember that the widespread launch of automation, robotics, and artificial intelligence is likely to cause more harmful disruption to low-income workers.
As an example, he pointed to the distress caused to thousands of Australian welfare recipients last year as a result of Centrelink’s botched ‘robo-debt collector’ campaign.
Queensland Council of Unions general secretary Ros McLennan said the job of the super fund industry was not just to “take the temperature” of Australian society but also to “change the temperature”.
“We need to be mindful about how we use technologies that may displace people and their ability to look after their families,” McLennan said. “We need to have a stronger collective voice on turning back the tide on insecure work.”
She said roughly 40 per cent of Australian workers fall into the category of insecure employment, with many of them struggling to get by week-to-week – let alone think about putting anything aside in super.
Office of Innovation and Science Australia chief executive Dr Charles Day said it was sensible to make changes to the super system in response to the rise of the gig economy.
“The people who founded super couldn’t have imagined the world we live in today so it is only natural to update it,” Day said.
Australian Institute of Superannuation Trustees chief executive Eva Scheerlinck said the time to make changes is now, before the gig economy becomes a much bigger problem.
“We already have a big gap with those people earning less than $450 per month from a single employer and the self-employed falling outside the compulsory system,” Scheerlinck said. “We don’t want the group of people sitting outside the system to continue to grow. We need to make sure people are being paid super from the first dollar they earn.”
AustralianSuper group executive of membership, Rose Kerlin, said scrapping the $450 monthly threshold on the super guarantee would bring 1 million people back into the system. She also advocated for speeding up the timetable to lift the super guarantee from 9 per cent to 12 per cent to improve adequacy, and rethinking who is obligated to pay super on a worker’s behalf.
“Super needs to be an entitlement of work, not an entitlement of employment,” Kerlin said.
PwC global leader, people and organisation, Jon Williams said a recent study conducted by the professional services firm found that employers need to build trust with their employees to be in a good position to apply new technologies to make changes in their business models.
READ MORE: All the coverage from CMSF 2018