Automation and workfare support

By Zhen Im and Kathrin Komp-Leukkunen

Do automation-threatened workers support workfare? As automation permeates the workplace, this question becomes increasingly relevant. Although automation-threatened workers prefer more generous income redistribution to compensate for potential economic loss, we know less about their views on workfare. This gap is concerning due to changes in social policy orientation among European governments under the pressure of fiscal austerity.

As governments seek to get a handle on public expenditure under austerity, unemployment benefit generosity has come under threat. Yet, cutbacks are frequently unpopular with the public. Governments may be averse to pursuing such cuts for fear of electoral setbacks. Maintaining or raising benefit levels may therefore require “cutbacks” by stealth by restricting access to unemployment benefits. Such cost pressures may therefore explain why workfare has become more prevalent in most European welfare states. Workfare introduces stringent obligations and sanctions which hinders benefit access in practice. Yet, we know less about determinants of public support for it in comparison to determinants of support for redistribution or social investment.

As the adoption of workplace automation takes off in Europe, this gap is particularly concerning. If automation-threatened workers are indeed at a higher risk of becoming unemployed, they have a greater potential of being burdened by workfare. It is hence important to investigate how automation-threatened workers react to workfare, since such issue opinions may spillover to how they vote.

Risks faced by automation-threatened workers

Workers performing routine, that is repetitive and easily codifiable tasks, face a greater risk of displacement from automation. As such routine jobs have disappeared over time in Europe, while low-skilled and high-skilled non-routine jobs have grown over time, albeit at different rates. Consequently, there is an expectation that workers in routine jobs may suffer higher economic risk than workers in non-routine jobs. However, there is some evidence that changes in employment structure in Europe relate less to higher exit rates from routine jobs, and more to lower entry rates into these jobs.

This study therefore compels us to consider the type of risk which automation-threatened workers. In the short run, they do not seem to be overly threatened by unemployment. Yet, these workers may also experience other risks. In fact, labour market disruptions may engender both economic and social risks. As a recent study argues, routine workers face threat of social decline even if they cling onto their routine jobs, because societal recognition and status go hand in hand with the level of demand for jobs. Put differently, automation-threatened routine workers may experience the threat of social status decline, even if they are not imminently at risk of unemployment.

Beyond rational choice motivations of policy support

An established body of work suggests that individuals’ support for social policies like unemployment benefits is typically linked to their level of economic risk. Individuals who face a greater risk of becoming unemployed may prefer more generous unemployment benefits to compensate for potential income loss during unemployment. In other words, their support for redistribution is linked to their economic interests. For automation-threatened workers, they may still worry about the long-term risk of unemployment, even if they are not at risk of it in the short run. Consequently, workers whose jobs are threatened by automation are found to prefer more generous redistribution.

Yet, and as highlighted earlier, the threat of status decline may be more salient than unemployment in the short run for automation-threatened workers. Individuals who are status-anxious may be averse to occupying the “last place” and may thus otherise other vulnerable social groups to distinguish themselves. For instance, this otherization may take the form of “hardworking respectable” us against “irresponsible and ill-disciplined” them. Otherising enables these individuals to maintain their own precarious social status by distinguishing themselves from other groups.

In this vein, automation-threatened workers may respond similarly. As automation-threatened workers feel anxious about their status in society as demand for their jobs fall, they may seek to distance themselves from social groups that are typically but unfairly ranked below them such as unemployed workers and immigrants. Negative views towards these social groups arising from otherisation may diminish the extent to which automation-threatened workers view these social groups as deserving of welfare. These workers may therefore support stringent obligations and sanctions on these groups, especially as they are unlikely to be burdened by the costs of workfare since their risk of unemployment is low in the short run.

Using cross-national data of 22 countries from Round 8 of the European Social Survey, we find that workers in highly routine occupations and who are thus most at risk of being displaced by automation support cuts to unemployment benefits if the unemployed refuse lower wage jobs.

The role of economic hardship

Furthermore, rising economic hardship may also raise automation-threatened workers’ support for workfare targeted at unemployed workers. When economic conditions worsen over time, individuals may feel further cut adrift. Thus individuals in economically depressed regions typically experience feelings of marginalisation and exclusion which are themselves associated with fears of status decline. As such, automation-threatened workers may fear status decline even more with rising economic hardship. They may then respond more strongly to the threat of status decline and otherise lower-ranked social groups like unemployed workers. In short, economic hardship may intensify automation-threatened workers’ fears of status decline and their opposition to unemployed workers.

We examine such a scenario by considering how changes in countries’ unemployment rates over a ten-year period from 2006 to 2016 influences automation-threatened routine workers’ support for workfare. As the figure below shows, automation-threatened workers support workfare most in countries with greater economic hardship where unemployment rates have risen substantially over time. By contrast, they oppose workfare in countries where economic hardship has diminished over time.

Note: Countries ranked by average changes in year-on-year unemployment rate in descending order (from rising to declining unemployment rates between 2006 and 2016).

Concluding remarks

This study therefore highlights that motivations for different social policies may vary. Unlike redistribution which seems heavily guided by individuals’ economic interests, motivations for workfare may be more dispersed. Support for workfare may be shaped by the balance between individuals’ risk of being burdened by stringent obligations and sanction and their social status anxiety. These different motivations may become even more relevant in a post-COVID digital and automated world. Although the initial response to the labour market challenges arising from COVID-19 shows that European governments are willing to spend heavily, recent speeches by European politicians hint that they may return to fiscal prudence soon. Cost containment and workfare may therefore come into the picture once more.

This blog post is based on an article published in the Journal of European Social Policy.

About the Authors

Zhen Im is a postdoctoral researcher at the Copenhagen Business School.

Kathrin Komp-Leukkunen is an associate Professor for Social Policy at the University of Helsinki.

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