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- [00:01]
Kirsten Sainbruch
In the UK we have one in four workers who are in what I would consider to be a poor quality job. In London, that's even higher. It's a one in three workers. So these are workers who have poor employment conditions, often low wages, precarious contracts, unstable jobs, work too many hours or work too few hours, and are looking for more work.
- [00:24]
Maya Narad
That's Kirsten Sainbruch from LSE's International Inequalities Institute. For many, the world of work is defined by instability, poor contracts, and rising insecurity. On the other hand, technological shifts are offering unprecedented gains. AI promises a massive productivity uplift, removes drudgery, and stimulates creativity. We're seeing models of employment which promise the ability to work from anywhere, providing geographic flexibility and making location no longer a constraint for individuals choosing where to live. And overall, on average, people are working slightly less. Welcome to lseiq, the podcast where we ask social scientists and other experts to answer one intelligent question. I am Maya Narad from the IQ team where we work with academics to bring you their latest research and ideas and talk to people affected by the issues we explore. In this episode I Are jobs getting better? And if so, for whom? I learn why we need to focus on job quality, not just quantity, and discover how AI is reshaping creativity and productivity. I also find out if a new model of work could finally stop the brain drain from smaller towns. We'll return to Kirsten saintbuch's warning about the precarious nature of the workforce later, but first let's hear about the Geography of Work. Raj Chaudhry is a professor of organizational behavior in LSE's Department of Management. He argues that the working from anywhere model isn't just a pandemic hangover, it's a unique opportunity to solve deep rooted economic and societal problems.
- [02:03]
Raj Chaudhry
I think the geography of work is changing quite rapidly, and it was changing prior to the pandemic. But the pandemic acted as a sort of like event that precipitated many other companies to embrace remote and distributed work practices. And the reason I was excited about starting Work from Anywhere is it gives employees and individuals a lot of freedom to choose where to live while giving companies the ability to hire from more places. So I see Work from Anywhere as a win win. It's good for individual workers and it's good for companies.
- [02:39]
Maya Narad
Raj explains to me the difference between the concept of working from anywhere and the more familiar idea of working from home.
- [02:45]
Raj Chaudhry
So work from anywhere is a work arrangement where the worker gets to choose where to live and it may not be complete freedom, but some freedom. In some cases, it might be the city, the state, and even the country. So if I'm a young worker, housing costs in a city like London or any large city in the world is prohibitive now. But if my company allows me to work from anywhere, I can go and live in a smaller town. I could go and live in Leeds, in Liverpool or Bristol, where the housing costs are much lower, so it becomes more affordable. And then I can afford a bigger house. Work from anywhere allows individuals to live closer to their parents. And many people have caring responsibilities. So if you're living closer to your parents, that's a very important priority for many individuals. For many couples, getting two jobs in the same place is a struggle. So the dual career problem, and there's both research and I have anecdotes of women losing out on career progression because of the location. So if you're a woman living in London and the company's giving a promotion but asks you to relocate to New York, maybe your partner or your kids don't want to move. But if your company gives you work from anywhere as a flexibility, then you don't have to move for the promotion.
- [04:10]
Maya Narad
And what about employers? There are also many benefits to employers that we can explore. I think some of them might be concerned that you know about productivity, how that might be impacted when their employees are working from other places. They have less contact in the office than you would have in a, in an office setting. What is your perspective on that?
- [04:31]
Raj Chaudhry
The biggest benefit for employers if they embrace work from anywhere is they can hire from anywhere. So instead of getting all the talent from one single location, now your labor market expands. So you can now hire from not only London, but you can hire from the rest of the uk. You might be able to hire from other European countries, maybe North Africa, Latin America, even Asia. So the world becomes your labor market. That's the biggest benefit. And my research has shown that work from anywhere could lead to, to productivity increases. But let me also quickly add something here. I'm a strong believer of work from anywhere being beneficial to both companies and workers. But I'm also a strong believer of in person. And when I say work from anywhere, it doesn't mean that we never meet in person. I actually think of different forms of hybrid work that allow for both work from anywhere and in person time.
- [05:31]
Maya Narad
But getting the balance right can be difficult. We've all experienced the frustration of commuting into the office only to spend a day sitting on video calls that we could have Done from home. For Raj, this defeats the purpose. He argues that if we're going to ask people working from anywhere to come in, we need to completely rethink what the time is actually for.
- [05:51]
Raj Chaudhry
The first design principle is we should not be working on individual tasks because right now what's happening is many people are going to the office or wherever and then they're wearing headphones and getting on zoom, or they're closing their doors and doing coding, or they're closing their doors and writing their reports. And I see no sense in that because those individual tasks can be done from anywhere. So when we are in person with the team, those days should be scheduled as only team based activities. So it should be focused on mentoring, it should be focused on brainstorming, it should be focused on collaboration exercises, and most importantly, it should be focused on building trust.
- [06:33]
Maya Narad
And I think often when we think about working from anywhere, it's mostly big tech companies or private sector that comes to mind. Where do you see this working really well also for the public sector, work.
- [06:46]
Raj Chaudhry
From anywhere is important for all companies, but especially for public sector, because the public sector cannot compete with the private sector on wages, on salaries. So what the public sector can offer is flexibility. So I think work from anywhere is actually more important in the public sector compared to the private sector. So earlier the criticism of work from anywhere or work flexibility was that it's not possible to do flexible work or work from anywhere if you are a doctor or, or if you're a nurse or you're a factory worker. Now, because of digital twins, it's possible to work from anywhere, even in these settings. So I think because of digital twins, work from anywhere is going to now become more popular in sectors that was not possible even like five years back.
- [07:39]
Maya Narad
Raj describes his digital twins as a system where sensors and AI create a real time virtual replica of a physical site like a hospital or a factory, allowing professionals to monitor and manage them from anywhere. For Raj, this isn't just about efficiency, but also a mechanism to reverse the brain drain that has diverted talent from smaller communities for generations. But while work from anywhere changes where we are different forces, fundamentally reshaping what we are capable of doing, artificial intelligence is the elephant in the room. And according to Fabien Cortomier, the chief economist at Google, we shouldn't underestimate the historic scale of this moment.
- [08:20]
Fabien Cortomier
This is the most profound shift that I've come across in my professional career as an economist. We haven't quite seen something like this. And firstly, it's something quite rare. That we're observing. So AI is a general purpose technology. It joins a very select club of technologies. You've got a steam engine, electrification, personal computing, and now you have AI. And these are technologies that transform economies really profoundly. I think, and this is quite special, that AI is also what you might call an invention of a method of invention. So the late Nicholas Crafts, you know, had this expression and was already pondering whether AI might be. And so what we mean here is that AI is not just a single breakthrough, but a breakthrough in breakthroughs. So that you see, especially when you apply AI to science, that it accelerates the pace of scientific research. And the best example of that is, you know, it's a homemade example. So AlphaFold, which is a system released by, you know, Google DeepMind, that won the Nobel Prize to a couple of my colleagues, Demis Hassabis and John Jumper, in 2024. And essentially it predicts the structure, the 3D structure of 200 million proteins. And that's now released openly for many millions of researchers across more than 190 countries across the world to use in their research. So, I mean, the use of it is formidable. But to give you a sense of how transformative this is to predict or to understand the structure of a single protein that could cost you hundreds of thousands of dollars and potentially years in the lab. And Suddenly, thanks to AI, in one fell swoop, you've got 200 million of these that are out. And so now you've got people working on malaria vaccines, cancer treatments. I mean, it's formidable, the unlock that it has facilitated. So that's why this is more profound, I think, than even other GPTs than we have seen. And it's coming not a moment too soon. In terms of the challenges we have as societies, in terms of the adverse demographics we face, it really has the potential for a massive productivity uplift.
- [10:29]
Maya Narad
Recent studies have shown tangible productivity gains ranging from 14 to 40% across professions like customer support, coding and professional writing for Fabien. These micro improvements are already adding up to significant time back for the average worker.
- [10:45]
Fabien Cortomier
We found that workers on average could make time savings of 122 hours in a year. So the productivity evidence is tantalizing. It's tangible at the micro level. The question is, when is this going to translate into the macro level? And that's a whole other ball game. It's early innings right now. There's higher creativity and higher quality of output in the work. And so these dimensions of well being at work are also things that we find, we found in our own research and that Erik Bryngelson paper on call centers, which is a very tense environment, right? I mean, customers are sometimes not happy when they're talking to customer service agents. But Erik Bringelson and his Stanford colleagues found that there was higher retention of agents who used AI because the conversations were less hostile, there was less escalation to managers.
- [11:33]
Maya Narad
What do you think people get wrong when they talk about AI and jobs generally, and which very common claim doesn't really match the evidence that we have so far?
- [11:42]
Fabien Cortomier
There's a lot of discussion out there around AI impacting jobs as a whole. And that's not how technology works. The way technology works from an economic perspective is it automates individual tasks and the job is really a collection of tasks. And so a job only gets fully automated away when a significant proportion of the underlying tasks are automated, which is a fairly rare event. So Jim Besson looked at the 1950 census, 270 occupations in the US and found, I think he published in 2016, that only one had been automated away, which was elevator operator. And on the whole, technology is a net creator of jobs. The other part is around the idea that AI is a sort of white collar affair, that it only impacts the cognitive realm. And of course it does. It very much impacts the cognitive realm. But I think people are underappreciating how transformative it is going to be for blue collar occupations as well. So in the US we have a shortage of 100,000 electricians right now, similarly, I mean, slightly lower, but large scale shortages of welders, H Vac engineers. And a lot of that is driven by the AI boom, essentially where investment in data centers and all of that build out is requiring a lot more people in those traditional trades who are thriving. So that's doing very, very well, even short of their occupations being modified day to day. But I think those occupations will be modified day to day, because if you take a step back, what AI does essentially is it radically reduces the price of knowledge and analysis in the economy or reduces the cost. And so knowledge and analysis is present throughout the economy and of course is present in blue collar occupations.
- [13:31]
Maya Narad
Democratizing access to knowledge is one part of the equation for a better labor market. The other part is ensuring the jobs themselves are sustainable for the people doing them. Kirsten Steinbuch's research looks past the technology to focus on the human experience of the employment contract. She estimates that one in four workers in the UK are currently in what she refers to as poor quality employment.
- [13:55]
Kirsten Sainbruch
So at the moment, for example, the only way we compare workers is their wages per hour. But say, for example, you've got John, who's on a zero hour contract working in the retail industry at the minimum wage. You have Sophia who is working on a platform with very irregular wages, but also basically making the minimum wage, but never knows how many hours she's going to be working. And you have somebody who is, say, also a minimum wage earner and has a stable job, has been in the Same job over 10 years, has access to training, job security, et cetera. These three workers are all minimum wage earners and so saying okay, they're low income earners, that isn't going to help us. So one of those workers is going to be the most deprived and one of them is going to be the least deprived. And our public policy should be oriented towards the one who is the most deprived, taking into account also their personal circumstances and the ability that they have to convert their earnings potential into employment capabilities. So somebody who is looking after a small child, for example, and is restricted in terms of working hours, that person will need very, very different support to somebody who hasn't got any caring responsibilities.
- [15:22]
Maya Narad
We often assume that skills automatically lead to good jobs. But for many workers, especially women, the need to care for children or elderly relatives forces them to make a difficult trade off. They have to accept jobs well below their qualification level simply because they need the hours to work around their lives.
- [15:40]
Kirsten Sainbruch
They adapt to the fact that they have caring responsibilities and therefore they often have short term contracts, part time contracts, flexible contracts, etc. The problem with flexible jobs is not the fact that they're flexible, it's the fact that they often come and are associated with other employment conditions that are not very good.
- [15:58]
Maya Narad
This is a crucial distinction. Flexibility sounds like a perk, a way to balance life and work. But if that flexibility comes with low pay and zero security, it creates a trap. Kirsten argues this isn't just a problem for the individual worker trying to pay the bills. When you have millions of people trapped in low quality work, the cost eventually lands on the taxpayer's desk.
- [16:21]
Kirsten Sainbruch
There is a tipping point in this model where if you have too many workers who are in poor quality jobs, then that requires an awful lot more resources on the part of the state to sustain them. So for example, in the UK that would be universal credit. And at the same time people in precarious jobs pay less into welfare benefits either because they're working part time or because they're working flexibly or they have interruptions in their, in their employment trajectories. And so at the end of the day, you're earning less from those jobs as a government, but you're also paying out more to sustain them.
- [16:56]
Maya Narad
What daily problems do people describe most often when they talk about their job, when they talk about poor quality employment? Were there any stories in particular that stayed with you that you've heard?
- [17:07]
Kirsten Sainbruch
What we often hear is how difficult life is when you have small children because you have to balance your work situation with childcare. And if you don't have grandparents close by who are on hand to help, that can be extremely difficult. So that's a very sort of typical middle class problem of a particular age group. When that gets really difficult is when it's a low income situation. So typically like a single mother, somebody I know who has three children, nobody around to help with caring responsibilities, and you will either have a shortfall in terms of how the children are cared for or you will have a shortfall in terms of employment. The level of stress that that causes in families is, in my view, in the long term, unsustainable. And when you talk to people, it's. I mean, the stories are sometimes heartbreaking. What we end up with very often is people who are, especially mothers, stepping out of the labour market so that they can take care of children because they can't do it both or because their earnings don't cover childcare costs. And the problem with that, of course, is that the minute you stop working, your skills atrophy, it becomes much, much harder to reinsert yourself in the labor market.
- [18:21]
Maya Narad
And this creates a catch 22. You step out of the workforce because the childcare costs are too high. And often the only way back in is to retrain. But for many people with a mortgage or a family to feed, taking two years off to study is a luxury they simply can't afford.
- [18:36]
Kirsten Sainbruch
If you are older and have a family, you often can't stop working in a job that's of poor quality because you can't afford to retrain. You can't just say, okay, for two years I'm going to be without earnings. So other countries, the case I know best is Germany, where you can apply for not only the new training, often that comes in the form of apprenticeships or sustained courses over one or two years, etc. And if it's an apprenticeship, you will be getting a small wage from that employer and then the government will compensate, taking into account the earnings that you had before. They will make up the difference between an apprenticeship wage and your previous wage up to an amount of like 80% or other forms of funding education like that. So I think the biggest question that we need to think about in the UK is once people have entered the labor market, how are they developing going forwards and who is funding that further development? Looking at just technologies isn't enough, but is universal credit going to be enough to help people into new jobs? Or do we need a training for life program where a university or apprenticeship is just the first training that you get or that is funded? We don't really have an infrastructure in place at the moment. It's all quite ad hoc. So that's, I think, the biggest policy gap that we need to fill.
- [20:05]
Maya Narad
Kirsten argues that her current safety net is too reactive. It waits for you to crash before it steps in. In an ideal world, she would like to see Britain rolling out unemployment insurance.
- [20:17]
Kirsten Sainbruch
Not unemployment, but employment, where you have in one system a sort of three tiered level of support, one which helps companies and advises companies on how to adapt, the second to help workers adapt to new skills, training, qualifications, et cetera. And the third would be, if all else fails, then a decent system of unemployment insurance that can genuinely help workers over a longer period of time not just be unemployed and survive, but also find new employment through new training and technology. So what we have at the moment is really a system that pushes you into the next available job, regardless of how good that job is, how many hours it is, as long as they get you over 30 hours.
- [21:02]
Maya Narad
Kirsten's arguing for a safety net that helps workers retrain and adapt to new technologies, rather than grabbing the first low quality job available. But in recent months there's been a growing fear that one demographic is particularly vulnerable. If AI can write basic code, draft emails and process data, what happens to the entry level employees who used to do these tasks to learn the ropes? Fabien Courtamier points to a much discussed study that claims these young workers are the canaries in a coal mine, the first signal that human labor is being replaced.
- [21:34]
Fabien Cortomier
So the best paper on this topic, even though I disagree radically with his conclusions, as I'll say in a moment, but it's again by Eric Brindelson at Stanford. It's called Canneries in the Coal Mine and him and his co authors believe they have identified the proverbial canary. So they have data from millions of workers, essentially via adp, which is a private payroll processor in the us and the headline finding of the paper is that There is a 13% relative decline in employment for early career workers ages 22 to 25 in highly AI exposed occupations. So it's a little bit of a mouthful, but that's kind of the finding. And essentially if you look at their paper, they find that right on queue. ChatGPT launches November 2022. And from that point onwards, the fate of these sort of young workers in highly AI exposed industries starts diverging from the rest of the economy. So that's what they find. Great paper, but the interpretation for me is totally not correct in terms of pinpointing AI. And the reason is these guys are looking at employment numbers, whereas if you look at job postings, job postings actually started to shift six months ahead of the curve, ahead of ChatGPT coming out. So this is April 2022. What was happening then? The Federal Reserve started the sort of largest interest rate hike in 40 years. So it was of course trying to control inflation, very massive sort of macro event. And from that point onward you find sort of a finding in this paper, but absolutely linked untimed with a macro event. Why is it that highly AI exposed occupations seem to be more affected? Because we believe that those are also more sensitive to interest rates. So actually what they're picking up in this paper is interest rate sensitivity. And again, I'm referencing this paper from Denmark, Humblung and Westergaard, phenomenal paper. They look at the same problem for early career workers as the Stanford researchers and find that there is no impact of AI. And they have very, very rich data there. So my read of the literature up to this point is that AI is not sort of the culprit of the current situation, but it is a low hire, low fire labor market, certainly in the us and that affects mostly people who don't currently have work, which is predominantly young people.
- [23:54]
Maya Narad
Fabien pointed out that these are still early days and we need more data to better understand this phenomena. But if the current slump is driven by interest rates rather than automation, the future might not be so bleak. In fact, Fabian reminds us that historically when a new technology arrives, it's usually the younger workers who win.
- [24:13]
Fabien Cortomier
Young people are typically the ones who make best use of technology. We saw that in previous waves. It was the sort of older generations where we, we saw evidence of excessive retirement or higher retirement than expected, who couldn't quite keep up. But the young people thrived.
- [24:28]
Maya Narad
What advice would you give to young people entering the labor market?
- [24:31]
Fabien Cortomier
What I tell young people is become masters of AI. Make sure that you leverage it to your benefit and to develop experience, develop judgment, so that you are leaning into those human qualities that are irreplaceable Leaning.
- [24:46]
Maya Narad
Into those human qualities is how we stay relevant. But if we zoom out, new technologies come with the promise of something beyond job security. They offer a new way of living. I asked Raj Chowdhury what a better job truly looks like for individuals and how it helps them to live their life to the fullest. For him, it's about finally solving a dilemma that has forced workers to compromise for generations.
- [25:09]
Raj Chaudhry
For far too long, geography has been a problem for most people, for many people, I won't say most people. So you have to leave your parents and migrate or you have to live in a very high cost city and somehow convince yourself that that's the right thing to do. The quality of life would be much better if people are allowed to choose where to live. See, if I like the mountains, I can go and live in the mountains. If I like the ocean, I can live close to the ocean. If I have caring responsibilities, I go live close to the, to my parents. If I'm a young person with two or three kids, I can go and live in a smaller town and get a big house and afford childcare. So I think we can turn geography into our friend, not our foe.
- [25:58]
Maya Narad
I also asked a central question to both Fabian and Kirsten. Looking at the big picture, are jobs actually getting better?
- [26:05]
Fabien Cortomier
I think it's getting better. And that sort of relies, I mean, or links back to the discussion we had earlier around, you know, more empowerment of people being able to do more expert work, less drudgery, that's the main one. And more creativity or ability to sort of tap into creativity in many sectors. We're not running out of work, but we're running out of workers. We could really use a productivity boost. So I'm looking forward to that, to AI rolling out and to it rolling out responsibly because it's of course going to require adaptation not at the level of cohorts, which is the most comfortable means of adaptation of the labor market, but at the level of individuals because it's happening within our lifetimes very, very fast and all of us are going to have to tool up.
- [26:51]
Kirsten Sainbruch
So if you look at it from a public policy perspective, actually what we always tend to find is that wages are going up in part because we increase minimum wages. So that decreases the level of earnings deprivation, especially when minimum wages increase by a little bit more than inflation. This doesn't do much about the overall distribution of earnings because higher earnings increase by much, much more than minimum wages. But in general, we'll find that earnings deprivation is either stable or decreases a little bit. And the other thing that has improved significantly in the UK is access to pensions. As employer pensions have been rolled out, that's been. That's made a huge difference. Another slow trend over time is that on average, people are working slightly less, a very gradual decline in hours towards more manageable numbers. Especially as in most families, both parents are working and sharing to some extent or form, caring responsibilities. What's deteriorated, however, is the stability of jobs, the types of contracts, the number of people working in precarious conditions, other employment conditions. And one of the big concerns also going forwards, especially with the rollout of new technologies, is devices that control workers which will have a significant or have the potential to have a significant impact on both your mental or physical health. So if you think about workers wearing wearable devices as they run around a warehouse, not having enough time for breaks, not being close enough to facilities, not having enough time to eat, that has both physical and mental consequences. Having people who are being tracked on their computers in terms of eye movements, how productive they are, number of clicks per hours, those are all devices that we haven't really thought about enough yet in terms of how we should regulate them. So the role of the government is not just to mediate between the different social actors, but also to think about the future and the institutions that we need going forward, especially in a context of adapting to new technologies. One of the issues about labour markets is it sort of has repercussions throughout your entire life, into your family, your household and beyond. It affects your well being, it affects the well being of your family, your children and so on. And so there's a social component or a social fallout of labour markets that we don't often take into account. There are many people out there who say growth is the best medicine, growth is the best social policy, etc. Yes, growth is certainly helpful, but it's not in and of itself necessarily enough. Much depends on the regulation, on the institutions that this growth occurs in.
- [29:44]
Maya Narad
This episode was written and produced by me, Maya Narad, and edited by Oliver Johnson. If you'd like to find out more about the research in this episode, head to the Show Notes. And if you enjoy iq, please leave us a review to help other people discover the podcast. Join us next month when Anna Bevan asks, why are we having fewer children?