Yellow Vests

Or how digitization divides the labour market in two

Dichotomy. France was plagued for weeks by actions of the yellow vests. People who organised via social media and initially protested higher petrol prices. In the meantime it also spread to other countries. What happened here?

This action is the most well-known incident in a long series that has resulted from the transition from classical industrial society to digital. Where highly educated people increasingly work in big cities and, moreover, thanks to technology, not location-bound, while people who do low-paid manual labour have to do it in random places. The latter group is very dependent on a car or other transport to get to places where they can do their work, while the first group can use public transport in large cities or work behind a computer. This dichotomy between two categories of people in society occurs all over the world and becomes more and more. In America, large groups of workers are unemployed when car factories close, in France entire villages are vacant and more generally the traditional companies, where a lot of manual labour is done, lose out from the technology companies where with a minimum of high paid workers maximum productivity and profit is made.

Understand digitisation. In this way, more and more people are being expelled from the labour process, while the economy is running well. This is a mystery to many economists, who after all expect that a growing economy will also lead to lower unemployment or higher wages. In the digital economy, however, a growing economy is partly accompanied by fewer labour options for large groups of people. In addition, an overload for the smaller group of highly educated and well-paid people. In fact, that process has only just started, but will irrevocably continue in the coming years as more traditional products and services are replaced by digital services.

It is high time that politicians and economists understand that a gigantic digital transformation is taking place worldwide, which is much more than just the disappearance of a number of banks or shops. The economy in the digital society functions completely differently than in the classical society. So the labour market will also start functioning completely differently, with many more self-employed people (in the Netherlands: self-employed persons). And a stronger separation between groups that do hands work and others who perform think work that is not linked to a place.

Growing migration. Non-local work is currently being reorganised and optimised internationally at a rapid pace. Where in the past all kinds of companies across the border opened companies to have work done, now more and more work is done from behind a computer, so it is irrelevant where the employee is located. In short: the growing group employees in the world of thought-work has less of a need to organise work in large central offices. Work is, as it were, delivered to your home. In contrast is the work of the people who perform classic manual labour. These people are by definition city or region bound for their work and are therefore much less internationally oriented. Migration also plays a major role for this group of people. After all, about 3.5% of humanity is now adrift and is looking for work in countries where there is labour or is paid better than in the home country. This means that this labour is leveling worldwide in terms of labour costs. For example, the Poles came to Western Europe at the time and took jobs for lower wages and so the people from South America move to the US and the like.

Future manual labour. A dichotomy of humanity, therefore, is what is currently occurring worldwide. And different working conditions are needed for both groups. The internationalisation of numerous laws is important for people who perform thought work in order to operate internationally. And because their work is location independent, they also want to live in a pleasant place. How different that is for the people who do manual labour. Their work is by definition at the service of the elite who perform thought work. They will have to do the work where their manual labour is requested, ranging from building a new road through an unpleasant area to building an office building in a busy city. Where the elite want to live or work, manual labour is needed, but at the same time the expensive residential areas can only be paid by the elite. In short, manual workers have to travel daily by car or public transport to go to their cheaper home on the periphery. Meanwhile, the perspective for people who have to work with their hands is diminishing. On the one hand because companies are increasingly automating and on the other hand because the increasing global migration leads to the leveling of wages.

New solutions required. That is the cause of the protest of the Yellow Vests in a nutshell. Digitisation is leaving heavy marks on our society. The dichotomy of society is taking place and will increasingly lead to two different groups of people in society who have different wishes and different perspectives. It is high time that policymakers and economists come up with solutions for the new digital society that is ordered differently from the classical world of labour and capital. Macron will have to show in France that he has understood.

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