Grimshaw 2020

International Review
Journal of Industrial Relations

0(0) 1–31
International ! Australian Labour and Employment
Relations Association (ALERA) 2020
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DOI: 10.1177/0022185620913129
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inequality shaped the
narratives in 2019
Damian Grimshaw
King’s College London, UK
Abstract
In a critical review of seven prominent flagship reports from five international organisa-
tions – the International Labour Organization (ILO), Organisation for Economic Co-
operation and Development (OECD), United Nations Industrial Development
Organization (UNIDO), United Nations Development Programme (UNDP) and World
Bank – this article explores how the policy narratives set out during 2019 and early 2020
have characterised the major future of work challenges associated with new technologies
and inequality. It identifies some similarities in viewpoints, including about the unevenness
of job changes caused by new technologies and about the declining labour income share, a
key measure of inequality. However, there are major points of differentiation. The ILO,
OECD and UNDP express serious concerns about the interaction between new tech-
nologies and growing inequalities, on the one hand, and a rise in precarious work, con-
centration of corporate power and erosion of labour bargaining power on the other. Also,
UNIDO emphasises the inequalities in technological capacities between developed and
developing countries, which make it difficult for markets to distribute the gains from
growth evenly. While the World Bank makes some concessions, it remains less open
to real-world heterodox evidence about how labour markets function in society. The
World Bank aside, there is a growing consensus that labour institutions around the world
need to be reinvigorated in order to respond to the challenges facing the future of work.
Corresponding author:
Damian Grimshaw, Professor of Employment Studies, Business School, King’s College London, Strand, London
WC2R 2LS, UK.
Email: damian.grimshaw@kcl.ac.uk
2 Journal of Industrial Relations 0(0)
Keywords
Future of work, inequality, International Labour Organization, labour income share,
international organisations, new technologies
Introduction
There are good reasons for industrial relations specialists (academics and practi-
tioners) to pay close attention to the policy narratives of the major international
organisations, especially the various United Nations (UN) agencies, the
Organisation for Economic Co-operation and Development (OECD) and the
World Bank. The first is that many of the potentially transformative ‘future of
work’ challenges confronting contemporary labour markets require international
cooperation, and it is within the multilateral system where the possibilities of an
overarching policy framework are most visibly negotiated and articulated.
Examples of challenges that are unlikely to be solved by a nation state acting
alone include establishing international labour standards, moving to sustainable
development, protecting workers in global value chains, migration, regulating dig-
ital labour platforms, and corporate taxation. Critical and constructive analysis of
the international policy narrative in these areas therefore supports a potentially
more effective and legitimate policy response.
A second reason is that the multilateral system is riddled with conflicts and
disagreements about the nature of the policy approach required and thus deserves
close scrutiny to shed light on problems of empirical evidence, theoretical assump-
tions or misunderstandings of literature so that policy recommendations are as
robust as might be expected. International organisations routinely draw on the
latest academic research, and yet in the field of employment there is far greater
reliance on macro- and labour economics literature than industrial relations (or
development studies, feminist economics or sociology of work) despite the strong
interest in policy analysis of these other fields. The OECD has considerably wid-
ened its reach recently (including an entire chapter on collective bargaining in its
Employment Outlook 2019 report) and the International Labour Organization
(ILO) promises to launch a new flagship report on industrial relations in 2021.
Nevertheless, far greater interaction with the industrial relations community is
needed in order to improve the way ‘future of work’ issues are interpreted.
A third reason is simply that the policy narratives of international organisations
are very influential, particularly among governments and civil society organisa-
tions, despite the often virulent opposition from right-wing populist governments
and certain corporate lobby groups. Major employment-related themes and policy
recommendations are routinely picked up by national governments, re-designed
and implemented for the local context. This means that attention to the underlying
analysis is useful.
Grimshaw 3
Box 1. Seven flagship reports selected for review.

This article reviews a selection of seven flagship reports from international organisations,
chosen to provide illustrations of analysis and policy recommendations in the broad area of
‘future of work’ challenges, especially with regard to new technologies and income
inequalities. The seven reports are as follows:
International Labour Organization (2019) Global Commission on the Future of Work:
Work for a Brighter Future. Geneva: ILO.
International Labour Organization (2020) World Employment and Social Outcomes:
Trends 2020. Geneva: ILO.
OECD (2019) OECD Employment Outlook 2019: The Future of Work, Paris: OECD.
UNDP (2019) Human Development Report 2019: Beyond Income, Beyond Averages,
Beyond Today – Inequalities in Human Development in the 21st Century. New York: UNDP.
UNIDO (2019) Industrial Development Report 2020: Industrializing in the Digital Age.
Vienna: UNIDO.
World Bank (2019) World Development Report 2019: the Changing Nature of Work.
Washington DC: World Bank.
World Bank (2020) World Development Report 2020: Trading for Development in the Age
of Global Value Chains. Washington DC: World Bank.
This article presents a critical review of a sample of seven flagship reports

published in 2019 or early 2020 by five international organisations: the ILO, the
OECD, the United Nations Development Programme (UNDP), the United
Nations Industrial Development Organization (UNIDO) and the World Bank
(Box 1). In order to narrow the range of analysis, the article asks two specific
questions related to debates on the ‘future of work’: What are the major insights
concerning the impact of new technologies on work and employment? What are
the causes and consequences of high-income inequality with regard to employment
issues? The first two sections explore each question in turn. In both cases, the
analysis includes an appraisal of the role of labour institutions in the recommended
international policy response. The article concludes by emphasising some of the
notable differences among international organisations and identifying areas of
research needed to answer questions about the future of work.
New technologies: Job losses, inequalities and precarious work

The flagship reports of the international organisations selected for review each
chose not to exploit the headline forecasts about possible job losses resulting
from new technologies. Instead, they emphasised the array of positive counter-
vailing effects, as well as the contingencies of technological design and implemen-
tation. The common identified employment risks concerned various dimensions of
inequalities, especially regarding patterns of segmentation across developed and
developing countries, industries and workforce groups (including by skill and by
gender). Only the ILO OECD and UNDP reports investigated the problematic
consequences for the standard employment relationship and in particular the asso-
ciation between new technologies (especially digital) and precarious work. These
reports call for a revitalisation of labour institutions to sustain and extend employ-
ment protections. Table 1 presents extracts of the relevant headline messages from
all seven reports.
Job losses
Despite several high-profile studies that argued massive job losses would result
from new technologies (Brynjolfsson and McAfee, 2012; McKinsey, 2017), in
their 2019 flagship reports the OECD, World Bank and United Nations agencies
each adopted a cautiously optimistic stance. In large part, this reflects the analyt-
ical rebuttal by the economists David Autor and Daron Acemoglu to the rather
alarmist perspective (Acemoglu and Restrepo, 2018, 2019; Autor, 2015; Autor and
Salamons, 2018). Drawing on historical evidence and the results of technical
modelling, their work has been very influential in showing that the quantitative
labour displacement effects of automation and artificial intelligence1 are likely to
be accompanied by several important countervailing effects. These can be sum-
marised as:
• a productivity effect (which reduces prices, raises demand for goods and services
and thus increases demand for labour, including in customer and supplier indus-
tries and to perform non-automated tasks);
• a capital accumulation effect (triggered by new investments that increase the
demand for labour);
• a deepening of automation effect (that improves the productivity of tasks that
have already been automated); and
• a growth of jobs effect to complete new tasks (in areas where humans have an
advantage over machines).
This alternative more holistic economics perspective tends to emphasise the

interconnections between high-tech and low-tech sectors of the economy, the pos-
itive and negative aggregate multiplier effects of new technologies on prices and
productivity, and the way in which technologies substitute for labour at the level of
work tasks rather than entire occupational groups.
The flagship reports all support this nuanced economics perspective (see Table
2). For example, while the OECD presents its own modelled estimates that around
one in seven jobs (14%) are at high risk of automation, it argues that this risk is
offset at the aggregate level by possibly larger job-creation effects as evidenced by
the pattern of rising employment rates in the last three decades among developed
and emerging economies (except the United States and Brazil) (2019: 44–49).
UNIDO finds that the ‘direct effect’ of increased use of robots was in fact positive
globally for the period 2000–2014 and was further reinforced by the ‘indirect
effects’ of increased employment in customer and supplier industries (UNIDO,
Grimshaw 5
Table 1. Headline messages regarding impacts of new technologies: Selected flagship reports.
Headline messages
ILO The human-centred agenda requires . . . attention to the broader role of technology in
advancing decent work . . . . Realizing the potential of technology in the future of
work depends on fundamental choices about work design We also subscribe to a
‘human-in-command’ approach to artificial intelligence that ensures that the final
decisions affecting work are taken by human beings, not algorithms. As we expect
this form of work [digital labour platform] to expand in the future, we recommend
the development of an international governance system . . . that sets and requires
platforms (and their clients) to respect certain minimum rights and protections . . . .
Regulation needs to be developed to govern data use and algorithmic accountability
in the world of work. (2019: 43–44)
To ensure that the gains brought by technological progress are distributed more
equitably, policy-makers will need to balance their technology and innovation
strategies, with a strong focus on improving infrastructure, access, investments and
knowledge in rural areas. Policies and programmes should also be adopted to
mitigate the possible adverse impacts of new technologies in terms of job losses or
income inequality, including urban–rural disparities. (2020: 56)
OECD A sharp decline in overall employment seems unlikely. While certain jobs and tasks are
disappearing, others are emerging and employment has been growing . . . . a key
challenge lies in managing the transitions of workers in declining industries and
regions towards new job opportunities. There are also concerns about job quality.
While diversity in employment contracts can provide welcome flexibility for many
firms and workers, important challenges remain in ensuring the quality of non-
standard work. (2019: 19)
UNDP [W]hile access to basic technologies is converging, there is a growing divergence in the
use of advanced ones . . . some aspects of technology are associated with the rise
of some forms of inequality – for instance, by shifting income towards capital and
away from labour and the increasing market concentration and power of firms . . . .
artificial intelligence and frontier technologies [have the potential] to narrow
inequalities in health, education and governance – pointing to technology’s potential
in redressing inequalities in human development . . . . technology can either replace
or reinstate labour – it is ultimately a matter of choice, a choice not determined by
technology alone. (2019: 200)
UNIDO Advanced digital production technologies applied to manufacturing production offer
huge potential to advance economic growth and human wellbeing and to safeguard
the environment . . . Although a large number of jobs will be vulnerable to
automation . . . , it is also likely to create new industries and new job opportunities in
more skilled and knowledge-based sectors. The evidence in this report suggests that,
once indirect effects along the value chain are considered, the increase in the stock
of robots . . . is actually creating employment not destroying it. (2019: v)
World Bank We know that robots are taking over thousands of routine tasks and will eliminate
many low-skill jobs in advanced economies and developing countries. At the same
time, technology is creating opportunities, paving the way for new and altered jobs,
increasing productivity, and improving the delivery of public services . . . . That is why
(continued)
Table 1. Continued.
Headline messages
this Report emphasizes the primacy of human capital in meeting a challenge that,
by its very definition, resists simple and prescriptive solutions. Many jobs today, and
many more in the near future, will require specific skills – a combination of tech-
nological know-how, problem-solving, and critical thinking, as well as soft skills . . .
(2019: vii)
The emergence of [new technologies] . . . is creating both opportunities and risks. But
the evidence so far suggests that on balance these technologies are enhancing trade
and global value chains. Innovation is leading to the emergence of new traded goods
and services, which contribute to faster trade growth . . . . The evidence on reshoring
is limited and the evidence on automation and 3D printing suggests that these
technologies have contributed to higher productivity and a larger scale of
production . . . . Similarly, digital platform firms are reducing the cost of trade and
making it easier for small firms to break out of their local markets . . . But there are
signs that the rising market power of platform firms is affecting the distribution of
the gains from trade. (2020: 4)
Source: Author’s compilation; see box 1 for a listing of the seven reports.
2019: 83–84). Figure 1 presents UNIDO’s estimates of the gains and losses for
industrialised and emerging economies; while the total job effect is positive
(around 0.3% per year), there is a large (unexplained) indirect job loss in domestic
supplier industries, especially in emerging economies.
The World Bank’s flagship report is also critical of studies that only focus on the
direct job losses and points out that the differential country absorption rates of
new technologies mean that job losses vary significantly depending on the context
(2019: 22). The ILO and UNDP reports cite the results of secondary studies and
argue for closer attention to how new technologies can advance ‘decent work’ and
‘the quality of work’, respectively, since we cannot predict with any certainty the
net change in jobs (ILO, 2019: 43; UNDP, 2019: 209; see below).
Inequalities and new technologies

In their flagship reports, these international organisations thus consistently direct
policy-makers’ attention away from large-scale aggregate job losses resulting from
automation and advanced digital production technologies. Instead, albeit with
varied emphasis, each report draws attention to the uneven and contingent
impact of new technologies on employment by country, industry and workforce
group (Table 3).
The unevenness of country differences in the scale of job impacts is especially
highlighted in the UNIDO, World Bank and OECD reports, as part of a broader
effort to understand the shifting international division of labour. By far the richest
analytical account is presented in the UNIDO (2019) report, reflecting its deeper
Table 2. Summary of evidence of job losses from new technologies: Selected flagship reports.
Effect Report Evidence

Grimshaw
Direct job losses? ILO (2019) Cites secondary studies (Table 1)

OECD (2019) Original modelled estimates: 14% of jobs in OECD at high risk of automation (i.e. the
likelihood of job being automated is >70%) and risk of ‘significant change’ in a further 32%
of jobs (Figure 2.6)
UNDP (2019) Cites secondary studies (e.g. Table 6.1)
UNIDO (2019) Original modelled estimates: small but positive annual job growth (0.14%) from 2000 to 2014
in industrialising and emerging economies (Figure 2.19)
World Bank (2019) Cites secondary studies: e.g. 7%–47% job losses for the United States, 6%–55% for Japan
Overall direct and ILO (2019) No statement on the quantitative effects. Instead highlights qualitative effects of new
indirect job gains technologies on the nature of work, job quality and employment relations
or losses OECD (2019) No modelled estimates for indirect job effects but states that the direct job loss figures ‘do
not account for the (possibly larger) number of jobs that technology generates’ (p. 48); also notes
that 4 out of 10 new jobs were created in digitally-intensive industries in the OECD in the
past decade (p. 45)
UNDP (2019) No modelled estimates but states, ‘Automation and artificial intelligence do not have to shrink the
net demand for labour. Automation can be leveraged to create new tasks – a reinstatement effect,
which would counter the displacement effect’ (p. 209)
UNIDO (2019) Original modelled estimates show an overall net job effect of 0.32% growth per year. This
includes indirect job effects via linkages with customer and supplier industries: positive job
gains in customer industries (domestic, 0.18% per year, international, 0.06%); positive job
gains in international suppliers (0.24%); but job losses in domestic suppliers (0.30%)
(pp. 83–85)
World Bank (2019) No modelled estimates but states,‘ . . . it is impossible to put a figure on the level of job dis-
placement that will take place overall . . . Moreover, using one country’s occupational categories to
estimate possible job losses from automation elsewhere is problematic’ (pp. 21–22)
Source: Author’s compilation.
7
Figure 1. Modelled estimates of direct and indirect employment gains and losses (percent per
year) due to robots, 2000–2014.
Source: UNIDO (2019: Figure 2.19).
intellectual association with the literature on innovation, firm capabilities and

uneven development. Inter-country inequalities primarily reflect differences in
technological development. The world is characterised by highly unequal divisions
between leader, follower and latecomer countries concerning the production and
use of new technologies,2 rooted in differences in capabilities and endowments, as
well as infrastructural and institutional conditions. While latecomers may be able
to leapfrog into new technologies, minimum levels of technological and production
capabilities are nevertheless still required (UNIDO, 2019: 49–60). This sets the
context for the likely unequal international effects of positive and negative employ-
ment effects of new technologies.
While all countries may benefit from the countervailing positive employment
effects identified above, some will be more exposed to the adverse risks of robot-
isation than others and therefore more likely to suffer net job losses. This is
particularly the case for middle-income countries with a high share of exports
in industries characterised as having tasks that are replaceable by robots
Grimshaw 9
Table 3. Summary of the potential inequality effects of new technologies on employment:

Selected flagship reports.
Inequality effects Examples of evidence
(i) Level of Major inequalities in country capabilities to exploit new technologies –

development between leader, follower and latecomer countries – shape likely
employment effects (UNIDO, 2019)
Middle-income countries are more likely than high-income countries to have
export industries at high risk of robotisation (World Bank 2020) –
although limited resources for capital investments and abundance of cheap
labour in these countries limit the risk (OECD, 2019)
Risk of reshoring of previously offshored jobs by high-income countries, but
empirical evidence still limited (UNIDO, 2019)
Digital platform work collapses geographical barriers, provides new work
and income opportunities in all countries, but brings new risks of
unregulated and non-standard work with quasi-informal economy busi-
ness models (ILO, 2019; OECD, 2019; UNDP, 2019)
(ii) Industry Job gains in digital-intensive industries and falls in non-digital industries
(World Bank, 2020)
Differential effects among manufacturing industries (UNIDO, 2019), in part
due to role of higher share of KIBS industries in leader and follower
countries (UNIDO, 2019), and across occupational groups (UNDP, 2019)
(iii) Skill Lower skilled workers more exposed than higher skilled to risk of auto-
mation/job loss (OECD, 2019; World Bank, 2019)
Decline of middle-skill jobs due in part to automation, leading to job
polarisation in certain contexts (OECD, 2019)
Analytical, technology-related and soft skills are likely to be in greater
demand (ILO, 2019; UNIDO, 2019)
(iv) Gender Women face higher a higher risk of job loss than men due to over-repre-
sentation in routine jobs (OECD, 2019; World Bank, 2019)
Women face a higher risk of job displacement than men in manufacturing
due to gender gaps in skill and access to job quality, among others
(UNIDO, 2019)
(v) Labour Falling price of investment goods (computing and communication
income share technologies) explains part of the falling labour income share (World
Bank, 2020), although effects are contingent (OECD, 2019)
Adverse effects of firm concentration in digital-intensive industries – higher
mark-ups and market power mean weaker worker bargaining power and
a falling labour income share (OECD 2019; UNDP 2019; World Bank,
2020)
(World Bank, 2020: 147–153). However, as the OECD points out, many middle-
income countries will not be making the predicted cost-saving technology invest-
ments in the short term – both because the vast majority of businesses are small or
medium-sized and lack the resources for such investments and because of an
abundance of cheap and low-skilled labour among expanding youth populations in

many developing countries (OECD, 2019: 48–50).
In addition to the direct job displacement caused by robots in these industries,
there may in the future be reshoring of jobs from low- and middle-income coun-
tries to high-income countries if tasks previously performed by inexpensive work-
ers in emerging economies can be carried out by inexpensive robots in high-income
countries (Rodrik, 2018). Labour-cost savings from adopting advanced industrial
robots, estimated at 33% in Korea and 25% in Japan, suggest such reshoring
disruptions could be significant. Again, however, the empirical evidence presented
in some of the flagship reports suggests such fears are not yet warranted. For
example, a survey of manufacturing firms in Europe found that of those firms
that had reshored some activities it was a concern for flexibility and quality
rather than labour-cost savings that was more likely to have motivated the decision
(UNIDO, 2019: Figure 3.13). This may be related to a perception that labour-cost
savings from offshoring still exceed the potential savings from automation and
reshoring.
Inequalities in the international division of labour are further impacted by the
way digital platform work is collapsing geographical barriers, especially those
barriers that had restricted access of workers in developing countries to new sour-
ces of income and types of paid work (Rani and Grimshaw, 2019). The World
Development Report places special emphasis on this point. It notes that Bangladesh
now contributes an estimated 15% of the global online labour pool via its 650,000
online freelance workers (World Bank, 2019: 25). In tracing the impact of digital
labour platforms on global inequalities, we face a similar set of context-contingent
issues addressed in research on global value chains (GVCs) (e.g. Reinecke and
Posthuma, 2019). While the new work opportunities provided on a digital platform
(or by a GVC supplier firm) may in many countries be more attractive than the
next best domestic alternative, they are unlikely to offer anything like the standard
of remuneration paid in the home country of the business client – although country
context (institutions, gender relations, legal compliance and trade unions) matter
very much (Barrientos, 2019). Moreover, because the next best alternative in the
developing country may involve poor working conditions and informal
economic status, there is no guarantee that new forms of digitally enabled work
lift workers out of poverty and insecurity, as a recent ILO report demonstrates
(Berg et al., 2018).
A further distributive effect concerns the way new technologies can shift
employment and wage prospects by industry within countries. The World Bank
observes that growth of e-commerce through digital platforms may have delivered
welfare gains by reducing prices and making more consumer goods accessible to a
greater share of the world’s population, but it is displacing a growing share of
workers from the traditional bricks and mortar retail stores (World Bank, 2020).
In the United States, the growth of e-commerce as a share of total retail sales is
associated not only with a drop in traditional retail employment, but also with a
relative decline in wages and job stability in those retail stores neighbouring the
Grimshaw 11
mammoth Amazon fulfilment centres compared to other retail stores (Chava et al.,
2018). While the World Bank over-emphasises welfare gains for the consumer,
especially in its headline observations, it does acknowledge that, ‘Consumption
gains . . . come at the expense of labor market adjustments’ (2020: 145).
Considering the effects of new technologies by skill and gender of workers, there
is clear evidence that existing inequalities are being exacerbated. The OECD and
the World Bank note that lower skilled workers are more at risk of automation
than higher skilled workers and that women are over-represented in jobs involving
routine tasks (Nedelkoska and Quintini, 2018, cited in OECD, 2019: 48; World
Bank, 2019: 153). Valuable detail is presented in the UNIDO report, which devotes
an explicit section (of around six pages) to investigating the gendered nature of
new technologies on manufacturing employment in developing and emerging econ-
omies. It raises four key issues:3 on average the risk of job displacement is higher
for women in manufacturing than for men; women’s risk is higher than for men at
all levels of skill (measured by level of education); men are far more likely to have
developed ‘skills of the future’ than women, which are valuable for working with
new technologies; and women’s access to high-quality jobs in manufacturing is
constrained by employer stereotypes and patriarchal cultural norms (UNIDO,
2019: 76–81). These issues have parallels with work in the services sectors. More
nuanced research identifies shifting gender inequalities resulting from trends
towards flexible work locations, greater diversity of working hours, uncertain
prospects for relational skills and uneven entitlements to employment and social
protection (Howcroft and Rubery, 2019; Piasna and Drahokoupil 2017).
A further gender inequality issue not addressed in the flagship reports is that
adjustments in the retail workforce caused by the growth of e-commerce are more
likely to impact women than men, given women’s over-representation in retail.
Findings from the industrial relations and feminist economics literatures are
instructive. Research on the restructuring practices of managers in supermarket
chains demonstrates that the combination of feminisation, low union membership,
low pay and part-time employment status make retail workers especially vulnera-
ble to cost-cutting adjustments and, even where unions are present, to concession-
ary spirals that allow terms and conditions to deteriorate over time (Beynon et al.,
2002; Kainer, 1998). Further displacement and recalibration of retail jobs is likely
with the growing share of e-commerce, and further research is needed to identify
the gender and industrial relations dynamics in developed and developing
countries.
With respect to changing employment dynamics in industry, the UNIDO report
similarly calls for more gender-sensitive research: ‘Filling this information gap is
crucial for developing a policy agenda to increase women’s equitable participation
in the industrial workforce and in the development of technologies, which is
fundamental to promoting inclusive and sustainable industrial development’
(2019: 76).
A final, major inequality effect of new technologies, addressed in all flagship
reports selected here, concerns the labour income share. All international
organisations appear to be concerned that technological progress, accompanied by

a fall in the price of capital goods, may be a reason for the falling labour income
share. Drawing on EU data, the World Development Report observes that the
decline is highest in industries with higher robot density (World Bank, 2020: Figure
6.8). More generally, all reports follow the insights of Autor et al. (2017) and warn
of the adverse effects of firm concentration in digital-intensive sectors, of oversized
mark-ups or rents and of the emergence of superstar firms. The problem is that the
labour share in digital-intensive sectors is already, on average, lower than in non-
digital sectors and in addition is declining. The next main section elaborates on this
issue.
Precarious work
In their 2019 flagship reports the ILO, OECD and UNDP share a common focus
on the potentially adverse effects of new technologies, especially digital platform
technologies, on the quality of work. This marks a welcome contrast with the
conventional economics approaches that focus solely on the long-term beneficial
capacities of technologies a) to raise productivity, earnings and work standards
and b) to reduce workers’ exposure to hazards, especially in the agriculture, con-
struction and mining industries. While recognising the long-term positive potential
of current technological transformations, the ILO, OECD and UNDP emphasise
three specific downside risks.
First, in direct contrast to economic theories of the upwards skill-bias of tech-
nical change, these international organisations now stress that automation and
digitalisation can in fact reduce the richness of work content, leading to deskilling
and a worsening of worker satisfaction (ILO, 2019: 43; UNDP, 2019: 213; OECD,
2019: 54). For example, the distribution of digital work to a globally dispersed
online workforce involves the algorithmic unbundling of jobs into ‘micro tasks’,
which significantly reduces the skill (and value) required for the overall job. The
empirical evidence collected by the ILO, drawing on original international surveys
of ‘microtask workers’, demonstrates that despite the high education of most
online platform workers4 the work tends to be (in the words of workers) ‘repeti-
tive’, ‘boring’ and ‘mindnumbing’ (Berg et al., 2018: 84–85). This has wider impli-
cations for economic development, as the ILO report’s authors describe:
The risk is that crowdwork, particularly microtask work, has the potential of deskilling
work and also displacing or replacing some forms of skilled labour with unskilled labour,
as jobs tend to be broken down into smaller tasks. Moreover, for developing countries
(but true as well for industrialized countries), the public investments in education, par-
ticularly in science, technology, engineering and mathematics (STEM) undertaken to
promote innovations and country-specific leadership in IT, risk being wasted or under-
utilized. (Berg et al., 2018: 89)
Grimshaw 13
The ILO’s (2019) Global Commission report calls for an alternative ‘human-in-
command approach’ to technology design and application. This would mean
ensuring that job requests from clients are re-engineered so as to maximise their
skill content and/or tailor them to fulfil the skills and expertise of available work-
ers. There is no scientific reason, given the sophistication of software programming
underpinning platform algorithms, why this could not be achieved, thereby
enabling an upward trajectory of jobs, value-added skill development and job
fulfilment. Without urgent interventions to improve work design, the world of
microtask work will continue down the Taylorist pathway already trodden by
millions of deskilled manufacturing workers in the United States more than one
hundred years ago. In contrast to the ILO, OECD and UNDP perspective, the
World Bank promotes a singular supply-side emphasis on human capital invest-
ment. In doing so it makes a valuable pitch for the value of socio-behavioural skills
(as opposed to only technical skills) for humans to retain an advantage over
machines (2019: 50), but it ignores the need for purposeful, skill-upgrading systems
of technical advancement that attend to the demand side of job design, sustainable
financial investments and ethical business strategy.
Closely related to digital deskilling is the business practice of ‘management by
algorithm’, a second downside risk. Research evidence demonstrates that the new
models of digital management are associated with both intensive digital surveil-
lance, which reduces worker control and autonomy, and illegal bias against certain
workforce groups in recruitment, selection and job allocation decisions (Kellogg
et al., 2020; Lambrecht and Tucker, 2019). As well as new challenges for employ-
ees, digital platform workers with uncertain legal status are also at risk of customer
discrimination. There is increased potential for explicit or implicit customer dis-
crimination against workers with the growing use of photographs and other per-
sonal data used to screen workers who provide domestic, transport and delivery
services (Kotkin, 2019). The OECD is alert to current business surveillance prac-
tices5 and alerts policy-makers to the risk that they ‘may have negative impacts on
their (workers’) job quality and well-being’ (2019: 55; see also UNDP, 2019: box
6.3). In warning against digitised use of sensors, wearables and online monitoring,
as well as potentially biased algorithmic job matching, the ILO goes further and
calls for workers to have the right to access surveillance data ownership and for
new governance rules for ‘algorithmic accountability’ (ILO, 2019: 44).
A third and major driver of more precarious work concerns the way that digital
platforms have expanded the number of workers in the grey area of statutory
rights between employee and self-employed, leading to proven legal cases of
false self-employment. Despite the business rhetoric espoused by the digital plat-
form companies, many of the jobs they offer do not provide the worker the
required set of freedoms that would align with the legal status of self-
employment. Depending on the legal context, these may include the freedom to
set the level of earnings per gig, choice of hours of work, choice of work clothing,
ability to contract with more than one business client, information about custom-
ers and ownership over data related to the transaction and business delivered (De
Stefano and Aloisi, 2020). Overall, the increasing imbalance of market power
means that precarious work is increasingly associated with advanced digital tech-
nologies. As the UNDP report puts it, ‘While crowdwork is a product of techno-
logical advances, it also represents a return to the past casual labour in
industrialized economies, and in developing economies it adds to the casual
labour force’ (2019: 208).
What role for labour institutions?

On the surface, each of the seven reports seem to follow the same policy narrative
regarding the challenges posed by new technologies for decent work. For example,
there is a common theme that digital platform technologies have evolved a pattern
of working that conflicts with the standard open-ended formal contract, which has
traditionally provided worker rights, trade union representation and social protec-
tion. However, there is no agreement on what ought to be done regarding reforms
of labour and social policy institutions. This disagreement reflects in part the
specific mandate and focus of these organisations, but also their openness to het-
erodox research outside of traditional macro and labour economics.
In its introduction, the 2019 World Development Report states, ‘Creating
formal jobs is the first-best policy, consistent with the International Labour
Organization’s decent work agenda, to seize the benefits of technological change’
(World Bank, 2019: 4). However, the report subsequently questions the relevance
of existing labour laws in developed and developing countries, given what it per-
ceives as the inevitable blurring of the formal and informal work boundaries
spurred on by digital technologies (World Bank, 2019: 26–27). Drawing on
recent World Bank technical papers and others (especially Bartelsman et al.,
2016; Packard and Montenegro, 2017), the report brings back the argument
from the 1980s that labour regulations reduce the speed of labour market adjust-
ment and therefore slow down the capacity of an economy to benefit from new
technologies and to increase productivity:
. . . while regulations address labor market imperfections, they often reduce dynamism in
the economy by affecting labor market flows and increasing the length of time spent in
both employment and unemployment. When regulations are too strict and exclude many
workers, . . . firms find it difficult to adjust the composition of their workforces. The
ability to adjust is an important condition for adopting new technologies and increasing
productivity. (World Bank, 2019: 116)
By contrast, for the ILO, OECD and the UNDP, a key challenge of new technol-
ogies concerns their effects on traditional forms of employment. These interna-
tional organisations support a recalibration of the standard employment model
that is inclusive of new non-standard forms of employment arising especially in the
digital economy, including the formalisation of false self-employment. They share
a non-determinist perspective of the design and application of new technologies,
Grimshaw 15
pointing instead to the need for socio-political choices about regulation of fair
competition among firms, attention to work design and strengthening of worker
rights and job protections to guard against adverse effects on job quality – in other
words, a ‘human-centred’ approach.
The human-centred agenda requires equally urgent attention to the broader role of
technology in advancing decent work . . . . Governments and workers’ and employers’
organisations need to invest in incubating, testing and disseminating digital technologies
in support of decent work. (ILO, 2019: 43–44)
Governments should ensure that all workers in the labour market have access to an
adequate set of rights and protections, regardless of their employment status or contract
type, and guarantee a level playing field among firms by preventing some from gaining a
competitive advantage by avoiding their obligations and responsibilities. (OECD, 2019:
157)
Realizing technology’s potential in the future of work depends on fundamental choices

about work design, including detailed job-crafting discussions between workers and
management. (UNDP, 2019: 211)
For the ILO, a reinvigoration of labour institutions extends to the international

arena. Its Global Commission report calls for development financing to support
strategic technology investments and an international governance system for dig-
ital labour platforms that obliges platforms and their business clients to respect
minimum rights and protections (ILO, 2019: 44).
Income inequality and economic power

A very significant feature of the narrative about international economic policy and
the future of work during 2019 was its general acknowledgement, as well as often
detailed analysis, about the effects of income inequality – in particular the role of
economic power in aggravating and reinforcing inequality and its adverse employ-
ment effects. This does not imply of course that we have arrived at a consensus
among the World Bank, OECD and United Nations about the scale of the prob-
lem, its causes and what ought to be done. But it does mark a significant shift in
narrative, especially at the World Bank, where notions of inequalities and econom-
ic power have not tended to figure prominently.
The declining labour income share as a key measure of inequality

Thanks to improvements in the collection of international data, high-profile eco-
nomic analyses (especially Autor et al., 2017; Karabarbounis and Neiman, 2014)
and its adoption as an indicator for one of the UN Sustainable Development
Goals,6 a measure of labour’s share of income is now routinely integrated into
Figure 2. Global and regional labour income shares, 2004–2017.

Note: the ILO data are estimated from household surveys for 95 countries from the ILO Harmonised
Microdata collection. Self-employed income is estimated using data for employees with similar characteristics.
Source: Gomis (2019: Figure 5).
reviews of the international economy and appears as a key indicator of income

inequality. This is certainly true of the seven reports reviewed here. Labour’s share
of income is defined as the proportion of a country’s GDP that accrues to workers
in the form of compensation, as opposed to capital income (profits and physical
capital). Attention is likely to intensify in coming years thanks to further efforts by
the ILO to improve labour income data – both by improving methodological
techniques to incorporate estimates of self-employed workers’ earnings (who
account for almost half the world’s workforce) and by expanding the sample of
countries (Gomis, 2019).
Analysis of labour income share data reveals three interesting features about
income inequality. The first, and most widely cited, is that the labour share of
income at the global level has declined significantly. The ILO data reproduced in
Figure 2 suggest a drop of around two percentage points since 2004. This is cor-
roborated by alternative estimations using different datasets: for example, the
OECD reports a fall of 3.5 percentage points over the last two decades in 24
OECD countries (OECD, 2019); and longer trend international data suggest
that the contemporary downward trend began in 1980, marked by a five percent-
age point fall during 1980–2012 (Karabarbounis and Neiman, 2014).
Grimshaw 17
The second feature is that the trend is not uniform around the world. In fact, a
handful of high-income countries account for the bulk of the global decline in
labour income share. This includes the United States, which experienced a fall
of three percentage points during 2004–2017, along with Germany, the UK,
Italy and Spain (Gomis, 2019: 25–26). More diverse patterns are apparent
among low- and middle-income countries. For example, Brazil experienced a sig-
nificant rise in labour income share during 2004–2017 (56 to 60%, among the
highest rises), while Mexico fell from 39 to 35% (ILO data7).
The third feature is the considerable disparity in absolute levels of labour
income shares by region. There is some convergence over the 2004–2017 period
shown in Figure 2, but the gap remains wide between the average labour income
shares in Africa (around 47%) and the Americas region (56%). Workers in Africa
are thus doubly penalised, suffering lower earnings as a function of both the level
of development and a worse bargain with capital in distributing the shares of
national income. Moreover, the gaps are even wider at the sub-region and country
levels given the close positive association between a country’s income level and
labour income share.
While the aggregate labour share of income is referenced in all seven reports,
there is less systematic attention to the distribution of labour income, whether at
global, regional or national level; it is only referenced in the ILO, OECD and
UNDP reports. According to ILO data for 2017, the top decile of workers in
the world earned almost half of total labour income (48%), while the bottom
decile earned just 0.1% (ILO, 2020: Figure 3.5). In general, the poorer the
region the greater the inequality in labour income distribution: in Africa, the
richest half enjoy 28 times the share of total labour income as the poorest half,
while in Europe and Central Asia the ratio is four times (ILO, 2020).Similarly, the
UNDP observes that more unequal distributions of labour income are strongly
associated with low levels of productivity. It argues that because the direction of
causation is not clear, policies to raise productivity must be ‘consistent with a
framework of inclusive income expansion’ (UNDP, 2019: 233).
Technological change and the declining labour income share

The flagship reports advance various explanations for the declining labour income
share (Table 4). A first explanation emphasises the role of technological change.
The argument is that new ‘capital-augmenting’ technologies have tended to lower
the price of investment goods (especially computing and communication technol-
ogies) compared to the price of labour and consumer goods, thereby increasing
overall capital intensity and lowering the labour income share via labour-capital
substitution effects. The widely referenced study by Karabarbounis and Neiman
(2014) shows that there was an inflection point in the early 1980s beyond which the
relative price of investment goods exhibits a steep downward trend all around the
world (op. cit.: Figure 7). Their application of a macroeconomic model to the data
finds a statistically significant association between labour income share and the
Table 4. Explanatory factors associated with the declining labour income share: Selected flagship
reports.
Explanatory Detailed reasoning OECD UNDP UNIDOb WBa

a
factor ILO
Technological Lower relative price of investment – 䊊 – 䊊䊊

change goods increases capital intensity
via substitution for labour
Market power Superstar, monopsony firms in 䊊䊉䊉 – –
increasingly concentrated indus-
tries extract large markups and
hold down wages
Global value Higher capital intensity and produc- – 䊊 – – 䊉
chains tivity of GVC firms underpin the
power to extract higher markups
at the expense of labour
Labour Less effective institutions and 䊉䊊䊊 – –
institutions weakened or underdeveloped
collective actors (unions and
employer bodies) reduce the
coordinated distribution of
income
䊉: strong emphasis in the report; 䊊: weak emphasis.
a
Markers for the ILO and the World Bank refer to flagship reports for 2019 and 2020.
b
The UNIDO report only makes one small mention of the labour income share in reference to a case study of
robotisation in Spanish manufacturing (UNIDO, 2019: 87).
relative price of investment goods (with a coefficient of 0.28), averaged out across
50 or so countries.8 Controlling for changes in skill composition, their model fur-
ther suggests that the falling price of investment goods can explain around half the
total global decline of labour income share (op. cit.).
This general result is repeated in the OECD (2019: 67) and World Bank (2020:
149) reports. While a seemingly robust result from state-of-the-art economic
modelling, it nevertheless feels like an analytical short-cut. This is largely because
of a reliance on relative prices as the key action variable and the assumed exoge-
neity of the change in technology. There are three substantive problems. The first is
the failure to consider interaction, or feedback effects, between the model of eco-
nomic growth associated with the new technology and the level of inequality as
characterised by the labour income share. Early work by Dani Rodrik, picked up
by many scholars since, demonstrated a negative association between inequality
and economic growth (Alesina and Rodrik, 1994; Van der Weide and Milanovic,
2018).
A second problem is that in reality actors make investment decisions in a given
institutional context, and it is this context that shapes the long-term distributional
Grimshaw 19
impact of capital-labour substitution practices. Diverse production systems (or

varieties of capitalism) favour low or high inequality for a given technology, via
a complex array of high or low financialised investment systems, strong versus
weak institutionalised bodies of countervailing power (such as trade unions and
employer bodies), skill-inducing or skill-degrading labour market rules and regu-
lated versus deregulated product markets (Berg, 2015; Grimshaw et al., 2017;
Roberts and Kwon, 2017). Relative prices open up the opportunities for hiring
capital versus labour, but the distributional and growth impacts are contingent.
The OECD report is certainly open to such an approach:
. . . the cross-country evidence on rising inequality also shows that there is nothing inev-
itable about its rise. Policies and institutions matter and can play an important role in
mitigating the impact of new technologies . . . on inequality (OECD, 2019: 71).
A third and related problem is the weight given to transactional, price-led eco-
nomic theorising that is devoid of the wider context of technological and learning
systems. The Schumpeterian-inspired innovation studies literature argues for an
alternative approach that identifies an important interaction between production
input prices and the technological eco-system (at industry and country levels). This
interaction in turn drives transformations in, and applications of, new technologies
(Freeman, 2013). This literature has generated many rich industry studies that
explore how past accumulations of technological knowhow influence the present
potential of an industry (and country) to absorb new knowledge (e.g. Malerba,
2004). Moreover, the evidence relates to the development studies literature that
considers how differences in economic complexity and diversification shape paths
of development and the distribution of income between capital and labour (e.g.
Hidalgo et al., 2007).
Market power and the declining labour income share

A second related explanation, especially emphasised in the OECD and World
Bank narratives, is the growing concentration of market power among firms
that has skewed the distribution of capital and labour in countries by increasing
the profit rate or mark-up. The argument set out mainly in economics studies is
that within many sectors of the economy an elite of ‘superstar firms’ and individ-
uals have taken advantage of conditions that generate ‘winner takes most’ out-
comes. Firms have rapidly scaled up by exploiting falling information and
communications technology (ICT) and transport costs, easier access to consumer
data and reduced tariffs, while a small class of high-income individuals have cap-
tured an increasing share of a country’s wealth (Allen, 2017; Autor et al., 2017;
Brown and Lauder, 2012; Piketty and Zucman, 2014).
The underlying empirical analysis certainly confirms an increase in industry
concentration in the United States and Europe. In an OECD working paper,
Bajgar et al. (2019) find an increase in the market share of the top decile of
20
Table 5. Market size, major producers and clients of frontier technologies.
Artificial intelligence Internet of things Big data 5G
Market sizea $16b $130b $32b $608b

Major producers Alphabet, Amazon, Apple, Alphabet, Amazon, Cisco, Alphabet, Amazon, Dell, Network equipment
IBM, Microsoft IBM, Microsoft, Oracle, HP, IBM, Microsoft, suppliers: Ericsson,
PTC, Salesforce, SAP Oracle, SAP, Splunk, Huawei, Nokia
Teradata ZTE Chip makers:
Huawei, Intel, Mediatek,
Qualcomm, Samsung
Main users Retail, banking, discrete Consumer, insurance, Banking, discrete Energy utilities,
manufacturing healthcare manufacturing, profes- manufacturing, public
sional services safety
a
Data refer to the years 2017, 2018, 2017, 2018, respectively; major producers are identified from a review of technology spending worldwide.
Source: adapted from UNCTAD (2019: Table 1).
Journal of Industrial Relations 0(0)
Grimshaw 21
firms in both manufacturing and services, as well as an increase when limited to the
top eight firms.9
However, firm power is exercised both within an industry and, perhaps more
importantly, on the basis of prowess in a given technology at an international level,
which extends a company’s reach. For each of the ‘frontier technologies’ (artificial
intelligence, internet of things, big data and 5G), a few large companies dominate
through providing all-in-one platforms (hardware, software, servers, cloud plat-
forms, etc.) to clients across all industries. The effect is to crowd out development
of technologies by potential competitors (UNCTAD, 2020). Table 5 presents the
estimated size of each frontier technology market and lists the major players.
The dominance of an industry and/or technology by so-called superstar firms
has increased concerns about the problematic consequences of labour market
monopsony power for delivering fair rewards to workers (OECD, 2019: 68;
UNDP, 2019: 208; World Bank, 2020: 223). This is a situation where a company
can exert power by holding wages low because of the relative absence of job
alternatives, influenced also by the degree of limited information about alternative
jobs and/or workers’ mobility constraints (Manning, 2003). Therefore, the growing
industry concentration and associated monopsony power exercised by employers
contribute, at an aggregate level, both to a bifurcation between productivity
growth and real wage gains and to a declining labour income share.
The World Bank and OECD are essentially making a ‘market failure’ argument,
as if a perfectly competitive labour market devoid of labour institutions would
establish a level playing field for workers to negotiate fair wages. Nevertheless,
both organisations instrumentalise the evidence of monopsony power in labour
markets to justify a strengthening of labour institutions to bolster workers’ wage
bargaining power. While not listed among its headline policy recommendations,
the World Bank report does align with the ILO and OECD in calling for collective
bargaining and a transparent minimum wage policy implemented via tripartite
social dialogue to protect workers’ earnings (World Bank, 2020: 195, 199). The
World Bank also calls for investment in public transport and travel subsidies (e.g.
to export processing zones) so as to improve workers’ mobility and employment
possibilities, thereby potentially reducing the degree of monopsony power.
Global value chain power imbalances and income inequality

A further explanation of growing inequality concerns the way that GVCs reflect
and reinforce global power inequalities among firms across different industries,
particularly between developed and developing countries. The World Bank argues
that GVCs, on average, deliver more productive jobs through scale effects that
increase productivity and output (World Bank, 2020). The problem is that with a
higher profit rate for firms, ‘GVCs also generate a force that results in a lower
share of an economy’s income being paid to labor’ (op. cit.: 86). Its statistical
analysis suggests the rise in GVC integration of firms around the world accounts
for around one-quarter of the global decline in labour income share (op. cit.:
Figure 3.17b). However, the chain of argument between increased productivity for
GVC firms and a higher mark-up or profit for capital, as opposed to higher com-
pensation for labour (or lower prices for consumers), is ambiguous. The 2020
report offers two possible reasons: first, increased concentration of market
power among GVC superstar buyer firms (see above) reduces the likelihood of
cost reductions being passed on to consumers, presumably due to restricted con-
sumer choice; and second, GVC firms must cover the fixed costs of more complex
global sourcing (op. cit.).
What is not fully incorporated into the World Bank’s frame of analysis is the
relationship between market power (meaning stronger GVC capital compared to
non-GVC capital) and employer power (meaning stronger capital compared to
labour). Furthermore, the World Bank’s own data analysis suggests that the gen-
eral picture of higher mark-ups, higher productivity and falling labour income
share is in fact a story about developed countries. Albeit without referencing
any of the wider literature that already documents the unequal distribution of
mark-ups in GVCs (e.g. Barrientos et al., 2011; Heintz, 2005; Kaplinsky, 2000),
the World Bank report shows that buyer firms in developed countries have expe-
rienced fast growth in mark-ups since the late 1990s. By contrast, suppliers in
developing countries have registered falling mark-ups, or mark-ups that are
lower than non-GVC firms; empirical evidence is reported for Ethiopia, Poland,
India and South Africa, among other countries, although China is referenced as a
key exception to this pattern (World Bank, 2020: 84–86). This is a remarkable
admission. As the World Bank puts it: ‘The risk that firms from developing coun-
tries experience limited profits after becoming suppliers for global firms mirrors the
rise in profits in developed countries’ (2020: 86). The squeeze on suppliers in devel-
oping countries is especially significant since it signals increased stress on workers.
In a further surprising admission, albeit restricted to the case of Bangladesh, the
World Bank acknowledges that GVC suppliers exploit leverage over their
workforces.
Moreover, because GVCs can emerge as enclaves or dominant sectors in developing

country economies, there is a risk that employers take advantage of monopsony and
political power in labor bargaining. For example, in Bangladesh garment factory owners
have managed, despite repeated large-scale protests, to avoid any real term increase in
garment factory wages. Depressed wages can be particularly problematic for low-income
workers in developing countries where GVC integration is associated with rapid urban-
ization and where housing and transport costs are rising far more quickly than overall
inflation rates (World Bank 2020: 199).
As such, the GVC contribution to the falling labour income share is in fact a
narrative about global inequality among GVCs wherein higher mark-ups in
(mostly) developed country GVC firms have both reduced labour’s share of
income worldwide and reduced the share of capital among GVC firms located in
developing countries. This more nuanced set of results may go some way to
Grimshaw 23
explaining the heterogeneous pattern of change in labour income share reported

above. Capital has gained at the expense of labour in developed countries, but also,
thanks to GVC power inequalities, at the expense of both capital and labour in
developing countries. This points to a possible resurgence of patterns of global
unequal exchange.
Finally, as with all statistical indicators that focus attention on a single percent-
age share figure, care is needed to disentangle what is happening to actual levels of
labour income and capital income. In developing countries, less income may be
accruing to both capital and labour, so whether or not the labour income share is
rising or falling is really a secondary consideration.
The effect of labour institutions on income inequality

The weakening countervailing power of labour institutions is noted with more or
less emphasis in four of the seven reports (not in UNIDO, 2019; World Bank,
2019, 2020) and explicitly tied to evidence of high-income inequality and declining
labour income share. Three key features are highlighted with respect to income
inequality. The first is the decline in the strength of trade unions. ILO data for a
sample of 69 countries shows that between 2006 and 2016, 41 countries experi-
enced a decline of more than one percentage point and just 16 a rise by more than
one point. There is no obvious pattern by high or low union density or high or low
country income. Countries with high declines include Zambia, Malawi and Russia,
while those experiencing large increases in union membership include Egypt,
Uruguay and Bolivia (Figure 3). In a context of increasingly concentrated corpo-
rate power (above), as well as financialisation (Kus, 2012), the decline in power of
workers’ organisations is argued to have failed to combat rising inequality within
countries (ILO, 2019: 41; OECD, 2019: 66–67; UNDP, 2019: 234).
The second feature is the limited success of workers’ organisations in expanding
membership to workers in non-standard employment and, especially, to informal
workers. The fragmentation of services and goods production, associated with
domestic and global supply chains, has further complicated boundaries between
standard and non-standard, formal and informal work and made the organising
job of unions more difficult. The OECD (2019) devotes most of its very welcome
chapter on collective bargaining to this issue, drawing especially on European
research to highlight obstacles and opportunities, including strategies to reduce
use of non-standard and informal workers, to establish a bridge to standard con-
tracts, or to extend protections to workers outside the standard employment rela-
tionship (e.g. Benassi and Dorigatti, 2015). The ILO (2019) warns of the major
challenges confronting unions in organising workers outside standard employment
contracts and traditional workplaces. More inclusive union organising strategies
would contribute to formalisation of work (ILO, 2019: 42). This would extend
employment and social rights to more workers and in turn amplify their voice to
bargain for a higher claim to income, improving the aggregate labour income
share. The World Bank (2020: 88–90) does briefly acknowledge that ‘GVC
Figure 3. Change in trade union density, 2006–2016.

Source: Grimshaw and Hayter (2020: Figure 1) using ILO data.
participation can increase casual employment’ and lists examples of displacement

of farmers, poor worker conditions and violations of core labour standards.
However, it does not identify the potential role of trade unions, instead calling
for private firms and international policy action to play a role.
The third feature concerns the ineffectiveness of wage-setting institutions (col-
lective bargaining and minimum wages) to shore up the labour income share and
reduce inequality. There is strong empirical evidence to suggest that minimum
wages and collective bargaining coverage combine to lower wage inequality
(Grimshaw et al., 2014; Hayter, 2015), although the evidence tends to focus on
the impact of wage institutions on the lower half of the distribution. The UNDP
report goes further and shows for the first time the power of minimum wages to
reduce the extreme inequality of labour income; it shows a strong positive associ-
ation between the value of a country’s minimum wage and the share of labour
income earned by the richest 10% (2019: Figure 7.4).
The World Bank stands in stark opposition to this position. It still assumes,
despite longstanding intellectual arguments by Nobel-prize winning economists
and developing country evidence to the contrary (Ghosh, 2016; Solow, 1990),
including World Bank papers (Bhorat et al., 2017), that labour institutions dis-
tort an assumed natural state of labour market functioning. It argues that min-
imum wages (and other labour regulations) ‘ensure that informality is appealing
Grimshaw 25
for all but the most productive workers before the economy grows’ (World Bank,
2019: 31). This is one part of the World Bank’s (2019) broader strategic policy
position to call governments to shift from ‘regulation-based redistribution’ to
‘direct social welfare support’. In other words, it seeks to shift responsibility
and financial contributions from private business to the government. The
UNDP report presents an articulate response. It argues that minimum wages
can be effective in a context of informality precisely because the informal
sector is not perfectly competitive. Rather it is characterised by a major imbal-
ance of employer–worker power, lack of information and incomplete contracts
(associated with a risk of wage theft, for example) (see also Basu et al., 2015).
Therefore, in the same way that wage-setting institutions correct an imbalance of
power in formal labour markets, all the more reason for them to play an effective
role in informal labour markets and thereby extend the zone of formal work and
contribute to a fairer distribution of income (UNDP, 2019: 235–236).
Conclusion
In a critical review of seven prominent flagship reports from five of the leading inter-
national organisations – the ILO, OECD, UNIDO, UNDP and World Bank – this
article has explored how the policy narratives set out during 2019 and early 2020 have
characterised the major future of work challenges associated with new technologies
and inequality. In many areas, it identifies a perhaps surprising consensus of view-
points. For example, all five international organisations embrace the relatively
nuanced economics account of job change caused by new technologies, which iden-
tifies direct and indirect countervailing effects via numerous ripple effects throughout
the economy. This stands in stark contrast to some of the highly cited academic and
management consultancy reports of recent years which insist on massive job displace-
ment by robots and artificial intelligence. There is also a concerted effort by all five
organisations to highlight the global unevenness of employment effects caused by new
technologies, whether by level of development, industry, skill or gender. Furthermore,
and perhaps most surprising, all five organisations acknowledge that the global labour
income share is declining and that this is a fundamental concern for economic gov-
ernance. These common viewpoints mean that all five organisations can share plat-
forms and possibly join up on research programmes on broad questions of new
technologies, inequalities and the future of work.
For an industrial relations audience, however, this article has illuminated key
points of differentiation, which may be said to reflect the overarching ethos and
mission of each international organisation, as well as its openness to heterodox
thinking about how labour markets function in contemporary society. This can be
illustrated in the approach to evidence of a declining labour income share. In its
headline narrative, the World Bank draws a strong association with the increase in
productivity in digital-intensive sectors, falling price of capital investment and
higher profits or mark-ups. The falling labour income share is presented as an
unfortunate consequence of a more dynamic economy. The problem is that this
ignores the potentially destabilising interaction between rising inequality and eco-
nomic growth. Furthermore, it assumes the uneven distributional impact of new
technologies is a given rather than shaped, for example, by labour institutions, and
it sidesteps the considerable (and diverging) global inequalities in trends in both
capital and labour income levels. In its 2020 flagship report, the World Bank does
in fact present evidence of poor working conditions and falling business mark-ups
in global value chain suppliers in developing countries (World Bank, 2020: 86), but
this does not feed into the central narrative.
By contrast, the ILO, OECD and UNDP express serious concerns about the rela-
tionship between new technologies and growing inequalities on the one hand and a
growth in precarious work, growing corporate power in key industries and erosion of
labour bargaining power on the other. The UNIDO flagship report is especially pow-
erful in its emphasis on major structural inequalities between countries by level of
development and technological capacities. These organisations therefore provide a
more grounded analysis of, and recommendations for, the kinds of reinvigorated
labour institutions required to confront and shape the challenges facing the future
of work, from pursuing more inclusive union-organising strategies to extending rules
governing the standard employment relationship in order to embrace non-standard
and informal work arrangements. The ILO’s (2019) Global Commission report is
especially powerful in calling for new institutions at the international level, including
measures of the distributional dimensions of economic growth and governance sys-
tems to regulate digital labour platforms and their client businesses.
Many areas highlighted in this article point to knowledge gaps and avenues for
further research. First, while there is much industrial relations research on the
exploitative character of certain forms of digital platform work, there is a need
to understand the potential for advanced digital technologies to advance an agenda
of decent work, attentive to differences by country level of development, gender
and skill: What institutional conditions can best advance a ‘human-in-command’
approach to applying such technologies? What is the relationship between a coun-
try’s positioning in leading or following developments in digital technologies
(including within global value chains) and its capacity to leverage benefits for its
workforce? Are trade unions sufficiently resourced to navigate (and negotiate) this
fast changing dynamic between new technologies and decent work? A second
research agenda could explore the new ILO data on labour income share to inter-
rogate the relationship between labour income distribution and (a) patterns of
productivity by industry and country (particularly in light of the finding that
labour income inequality is strongly associated with low productivity – UNDP,
2019: 233) and (b) different industrial relations systems so as to test the thesis that
stronger, more inclusive systems are associated with greater equality.
Acknowledgements
Thanks very much to the editor and reviewers, as well as Uma Rani (ILO) and Jill Rubery
(University of Manchester), for very helpful comments on an earlier draft.
Grimshaw 27
Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, author-
ship and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship and/or publication
of this article.
Notes
1. Moreover, in recent empirical studies, which apply state-of-the-art statistical techniques
to the best available data, even the supposed direct effect that robots will replace low-skill
jobs in manufacturing sectors is disputed (Klenert et al., 2020).
2. For example, the top 10 economies in the world account for 91% of all global patenting
of advanced digital production technologies (UNIDO, 2019: 49).
3. The key findings relate to a detailed analysis of 11 developing and emerging countries (see
UNIDO, 2019: 76–82).
4. In Asia, for example, 80% of platform workers had a university degree or higher qual-
ification, while in Africa the figure was 47% (Berg et al., 2018: 36).
5. For example, the digital platform for freelancers, Crossover, provides its clients with a
focus score and intensity score for each freelancer via digital surveillance of their work by
taking photographs from their PC or laptop every 10 minutes, screenshots and measures
of app use and number of keystrokes (O. Solon, The Guardian, 6 November 2017).
6. The associated sustainable development goal target, 10.4, calls on countries ‘to adopt
policies, especially fiscal, wage and social protection policies, and progressively achieve
greater equality’ (https://unstats.un.org/sdgs/metadata/ ?Text=&Goal=10&Target=
10.4, accessed 24 January 2020).
7. Author’s analysis from ILO data; available online at https://ilostat.ilo.org/data/ (accessed
30 January 2020). Further research is needed to make sense of the disparate patterns.
8. A dozen or so countries nevertheless do not fit the general pattern and experienced either
rising prices for investment goods and a falling labour income share (including Argentina
and Romania) or falling prices and an increase in the country’s labour income share
(including South Korea, Israel and Kenya) (Karabarbounis and Neiman, 2014). The
variety of country experience is therefore an interesting factor to be accounted for despite
the overall global pattern.
9. Yet they also find, rather counterintuitively, that in Canada and the United States (com-
bined) the rate of growth of concentration in digital-intensive industries between 2000
and 2015 was lower than in other industries (Bajgar et al., 2019: Figure 10) – although
both digital and non-digital industries in Canada and the United States increased in
concentration at a faster rate than in Europe.
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Biographical note
Damian Grimshaw is Professor of Employment Studies and Assistant Dean for
Research Impact at King’s College London. He was previously Director of the
Research Department at the International Labour Organization for 2 years
Grimshaw 31
(Geneva, 2018–2019). Prior to that, he was Professor at the University of

Manchester, Head of the HR and Employment Relations and Law group and
Director of the European Work and Employment Research Centre. His published
work covers international comparisons of low-wage labour markets, outsourcing
and HRM, technology and the future of work, precarious work, collective bar-
gaining and gender inequality. His research outlook crosses multiple disciplines,
including labour market analysis, comparative employment relations, feminist eco-
nomics and the sociology of work and management.

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International Review

Journal of Industrial Relations

new technologies and sagepub.com/journals-permissions

Box 1. Seven flagship reports selected for review.

This article presents a critical review of a sample of seven flagship reports

New technologies: Job losses, inequalities and precarious work

This alternative more holistic economics perspective tends to emphasise the

Inequalities and new technologies

Effect Report Evidence

Direct job losses? ILO (2019) Cites secondary studies (Table 1)

intellectual association with the literature on innovation, firm capabilities and

Table 3. Summary of the potential inequality effects of new technologies on employment:

Inequality effects Examples of evidence

(i) Level of Major inequalities in country capabilities to exploit new technologies –

abundance of cheap and low-skilled labour among expanding youth populations in

organisations appear to be concerned that technological progress, accompanied by

What role for labour institutions?

Realizing technology’s potential in the future of work depends on fundamental choices

For the ILO, a reinvigoration of labour institutions extends to the international

Income inequality and economic power

The declining labour income share as a key measure of inequality

Figure 2. Global and regional labour income shares, 2004–2017.

reviews of the international economy and appears as a key indicator of income

Technological change and the declining labour income share

Explanatory Detailed reasoning OECD UNDP UNIDOb WBa

Technological Lower relative price of investment – 䊊 – 䊊 䊊

impact of capital-labour substitution practices. Diverse production systems (or

Market power and the declining labour income share

Table 5. Market size, major producers and clients of frontier technologies.

Artificial intelligence Internet of things Big data 5G

Market sizea $16b $130b $32b $608b

Global value chain power imbalances and income inequality

Moreover, because GVCs can emerge as enclaves or dominant sectors in developing

explaining the heterogeneous pattern of change in labour income share reported

The effect of labour institutions on income inequality

Figure 3. Change in trade union density, 2006–2016.

participation can increase casual employment’ and lists examples of displacement

Declaration of conflicting interests

Case of India. Employment Working Paper 206. Geneva: International Labour

Manning A (2003) Monopsony in Motion: Imperfect Competition in Labor Markets.

(Geneva, 2018–2019). Prior to that, he was Professor at the University of

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Technological Lower relative price of investment – 䊊 – 䊊䊊