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London black cab drivers protest over Uber
London black cab drivers protest over Uber. Photograph: Oli Scarff/Getty Images
London black cab drivers protest over Uber. Photograph: Oli Scarff/Getty Images

I can’t wait for the next Airbnb or Uber, but we can’t let them kill middle-class jobs

This article is more than 8 years old
Tom Watson
The latest wave of the digital revolution is changing the job landscape and creating vast wealth. Labour must strive to ensure this benefits everyone

It’s safe to say that Hillary Clinton is no luddite. But the 2016 US presidential hopeful acknowledged this week that new technology is transforming the world of work and warned that we need to wake up to the consequences. She was right to do so.

In a major speech on the economy, Clinton talked about the threat to middle-class jobs posed by the so-called “gig economy”. The internet has enabled millions of people to make money by renting out a room or using their own cars to become part-time minicab drivers. That, said Hillary, is “creating exciting opportunities and unleashing innovation but it’s also raising hard questions about workplace protections and what a good job will look like in the future”.

The digital and technological revolution that created companies like Amazon and Facebook is making life easier, more entertaining and cheaper for many of us. But it also places secure jobs at risk and threatens to lay entire industries to waste. A Labour party whose founding mission was to make sure work pays needs to find its own answers to some of the hard questions Clinton identified.

Ask any taxi driver, self-employed accountant or small hotelier and they will tell you the disruptive force of new technology is turning their world upside down. The arrival of Uber in the UK has reduced the cost of taxi fares for consumers, for example. But cabbies who are more heavily regulated in our cities see their incomes plummet as a result.

Tourists and travellers pay less for accommodation by using websites like Airbnb; but hotels suffer – along with their employees – because they have to pay business taxes that Airbnb is exempt from. New accountancy software makes it easier for people to do their own finances (and enriches its inventors) but threatens the employment prospects of accountants – a white-collar profession traditionally regarded as one of the most secure.

As someone who loves new technical innovation – whether it’s a new game, a new phone or new music service – I think we should do more to celebrate technical innovation in Britain. But we also need to ensure the wealth created by the digital revolution doesn’t produce a “winner takes all” economy in which a tiny number of dotcom billionaires displace millions of workers in formerly secure jobs. We need to protect the interests of professionals and blue-collar workers even as we seek to reap the rewards generated by the new digital economy.

It is a difficult balance to strike. I don’t have all the answers. But I do know that technology will become as potent a force as globalisation in the coming decades. In fact, most economists already agree that it is technological change, rather than globalisation, that does most to explain wage stagnation and rising inequality in advanced democracies.

It took Labour too long to acknowledge that many voters felt immigration, one of the defining features of globalisation, was the most important issue facing the country. It would be wrong to make the same mistake twice by underestimating the impact the digital revolution will have on wages and jobs.

I am a huge enthusiast for new technology. I served as the country’s first digital minister under Gordon Brown. I even review video games for the New Statesman. Over time, technology could mean we all spend less on everything from the weekly shop to cars, clothing end energy. It will give millions of people the chance to do more creative and fulfilling work. But the effect the digital revolution could have on middle-class jobs could be as dramatic as that experienced by the working classes in the industrial age, as machines began to take on the jobs they’d done for centuries.

Reforming socialists have always believed change can be harnessed so that it produces better outcomes for everyone. So it is absolutely crucial that we continue to close the digital divide, so that all our workforce has the skills and training it needs so to claim a share of the enormous wealth the digital age is creating. It is too easy to pretend everyone has superfast broadband or a laptop. They don’t. We need to ensure everyone benefits – whether they’re from a country estate, or a council estate.

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