I’m here today to talk to you about a
transformation that’s happening all
around the world it’s a transformation
that’s been going in fits and starts
over the last thirty years
and so in some places it goes unnoticed
this transformation is both a
consequence as well as a driver of
urbanization that’s the link to today’s
theme I’m referring to the
transformation in the way that people
work and it’s happening fastest in
cities I’m an economist which to quote
one of our best ken Galbraith can mean
that I exist mainly to make astrology
look scientific and respectable but it
also means that when it comes to
urbanization and the quality of cities
I’m particularly interested in the
promise of agglomeration the word
agglomeration conjures up a slightly
different set of expectations and
economists than a dozen normal people we
excitedly anticipate things like
declining production costs and network
effects increasing returns and economies
of scale in plain English we expect that
when clustered densely together what we
call the factors of production land
labor talent and capital are going to
achieve a greater productivity than just
the sum of each part and that this
superior productivity will at some point
become self-perpetuating an engine of
growth and development this is about as
close as economists get to waxing poetic
or a pretty dismal and dry Bunch after
all one of the best-known urban
economists Edward Glaeser of howl of
Harvard University proclaimed
agglomeration to be a triumph of cities
but this triumphant outcome is by no
means guaranteed plenty of things can
get in the way
as any of you know that has spent time
stuck in a taxi in the clogged roads of
Mexico City Bangkok Salle Paulo Jakarta
and even Manhattan congestion can also
result from urbanization and can raise
the cost of doing business
agglomeration is not automatic other
speakers in this series have no doubt
highlighted the importance of connective
infrastructure such as freight and
commuter rail bridges roads
bicycle lanes pedestrianised areas
sidewalks to other overcoming barriers
and keeping transportation costs within
and between cities low the people of El
Paso and Ciudad Juarez know better than
anybody why it’s important to bridge
Geographic political and cultural
barriers in order to sustain and share
prosperity but I want to talk to you
today about a very different sort of
infrastructure it’s less visible and
less tangible but no less important this
is the policy and regulatory
infrastructure and particular labor
regulation and social protection
policies by labor regulation and social
protection I’m referring broadly to the
legislated definitions of the rights and
responsibilities of firms as employers
of individuals as workers and of
government as the agent of our common
greater good in the United States as in
many countries this policy
infrastructure was put in place in the
late stages of the industrialization
process or during the interwar period
think of Roosevelt’s New Deal and was
fortified in the decade after the Second
World War like home ownership a white
picket fence and 2.4 kids the
aspirations norms and institutions that
took hold during this period remain a
powerful point of reference
even today intended to achieve a greater
balance between working people and firms
and to correct many of the market
failures that economists write about
this policy infrastructure was designed
to support the way that people worked
back then at the time the common path
that most people followed went directly
from school sometimes through vocational
training or university into full-time
work usually for someone else for those
who detoured off this path there were
few clear ways of rejoining by their
late teens and early 20s most people
were looking for an entry into factories
and firms that would provide a long
employment ladder that they could climb
steadily rung by rung although rarely
stated explicitly the implicit
expectation both held by workers as well
as employers was that if they worked
diligently they would remain inside of
the firm
and rely on what economists call
internal labor markets for their career
advancement the labor regulations and
social protection that societies put in
place at that time supported this model
fairly well unionization and the
strength of collective bargaining
agreements were based on enduring
occupational categories such as welder
machinist service employee cabin crew
unemployment was a rare relatively rare
loss for which workers and firms could
pool risk and insurance schemes with the
help of government pension plans
rewarded long tenure and the firm was
assigned enormous responsibility for
implementing social policy in the United
States this is especially the case with
health insurance in other countries the
delegation of agency by governments to
firms can be seen in the financing
channels and the eligibility conditions
and monitoring of national social
security systems designed to protect
people from losses associated with death
disability in old age but all of this
rested on three foundational assumptions
the first that most people have a single
economic activity throughout their lives
a job
second that most people work full-time
in a subordinate relationship for a firm
and third that their occupation and
employment will be stable over a long
term the relevance of this resulting
policy evidence as edifice as well as
the foundations upon which it is built
are being threatened by rising tides of
change technological innovations and
automation regional and global economic
integration with production chains whose
links cross vast Geographic expanses or
like here in El Paso even national
borders and population ageing which
demands that we remain productive for a
longer portion of our lives and as I
suggested before these tides of change
are rising fastest in our cities we
observe their impact in the day to day
experience and perceptions of businesses
and working people alike it’s less
viable for firms to encourage long
tenure or to explicitly offer people the
security of clearly
and career progression digital
technology and Internet platforms drive
down the cost of organizing production
through markets of many small
specialized providers market based
production models of this sort looked
cheaper when compared to the cost of
relying on large vertically integrated
hierarchical firms employment disruption
is becoming more frequently people are
moving within and across industries in
and out of occupational categories in
far greater numbers career change
occupational fluidity and holding a
portfolio of income rather than just one
full-time job is becoming the new normal
for many people in setting aspirations
particularly for young people and cities
let me bring this back to the promise of
agglomeration and the threat of
congestion cities work best when people
and goods can move around easy easily
quickly and at low cost in the same
spirit agglomeration is more likely to
be the outcome of urbanization if the
economic factors land capital labor and
talent remain dynamic capital is very
mobile we don’t have to worry about that
so much anymore city planning urban
design and engineering have made
enormous advances and improving
connectivity permeability and to lower
transportation costs and more flexible
zoning and planning laws can accommodate
changing demands for the use of land
which would otherwise be immobile
however prevailing labor regulation and
social protection still assume the
stable mainly subordinate employment
relationships of the past and that once
in a particular occupation or in on a
particular job ladder few people will
move to another but in doing so they are
holding cities at a lower level of
productivity than they otherwise would
find to achieve abomination people that
are clustered together in cities need to
associate around a shared enterprise
carry out that pursuit be free to
disassociate and to reassociate with
others on the next project in the most
economically vibrant cities San
Francisco London New York a working
person can have several such productive
associations and in several
different capacities sole trader equity
partner employer employee freelancer by
defining legal roles rights and the
responsibilities of government to
citizens based on where and how a person
works labor market regulations and
Social Protection can get in the way of
this dynamic process the current code
assumes labor and talent will stay in
place which is just the sort of
stagnation that can keep a glom eration
from ever taking hold and by delegating
too many responsibilities for
implementing social policy to employers
businesses can be burdened with
unnecessary cost and people are
constrained from moving or taking on
several different productive roles in
the u.s. we observe job lock as
individuals depend on employers for the
quality of their health care in other
countries movement can be similarly
discouraged by industry specific wage
scales or pension plans or firm based
income support schemes in the case of
dismissal in a path-breaking book from
widgets to digits employment regulation
for the changing workplace catherine
stone a leading professor of labor law
at the university of california los
angeles argues that the fundamental
problem is that labor regulation has not
kept pace with the transformation in the
way that people work this might be less
a problem in countries like the United
States in the United Kingdom than in
other countries where government has a
heavier hand in the labor market however
even if less acutely the contradictions
between what is written in the code and
what is economically viable for
businesses and how people need or indeed
prefer to work are creating growing gaps
in coverage that contribute to economic
inequality anecdotal accounts of firms
offering people only less than full-time
employment to escape mandated worker
protections people hired and kept on as
freelancers performing the same tasks
and working the same hours as regular
employees and the growing discontent
Amend many who work through digital
platforms such as TaskRabbit or uber
these are just the tip of what could be
a very large iceberg we’re moving fast
through the fourth Industrial Revolution
of digital technologies and
cyber-physical
systems but equipped with regulation and
social protection policies that were
written for the age of the mass
production assembly line the
inconsistency between prevailing
policies in the way that most people
actually work is even greater and more
problematic in the emerging market
countries of Latin America Asia and
Africa in these countries the labor
regulation and social protection models
of the industrialized economies were
adopted when most people were still
working on farms in rural areas and only
very few were working in factories and
firms these policies fit poorly the
diverse world of work in emerging market
countries that poor that poor fit may
partly explain why so many businesses
and people in these countries work
beyond the reach of regulation in
taxation in the so called shadow or
informal economy some scholars argue
that imposing late industrial era labor
regulation in pre-industrial economies
may be a culprit for slowing down their
transition out of predominantly low
value-added agriculture and propelling
the growth of cities that suffer more
from congestion than they benefit from
or glommer ation so what is the way
forward what are the labor regulations
and social protection policies that will
support successful cities I argue for a
new policy infrastructure built on the
assumption that throughout their lives
people will work in lots of different
ways in which supports these people as
they move from one productive
Association to the next this shift in
policy approach is needed in countries
all around the world the shift will be
harder in places like France where the
labor code is longer and more
prescriptive than it is in the United
States but there are common steps that
need to be taken to bring the shift
about the first is to recognize that
successful cities require policy action
across a lot of different policy agent
areas dynamic labor markets are just one
ingredient of agglomeration the second
step is to scrutinize labor laws and
social protection for any intended or
unintended biases that favor some forms
of work over others and for possible
emissions and even exclusions of new
working forms from the rights and
protections that we’ve put in place
the third step is to amend these
policies or indeed to replace them
outright so that the hand governments
extend to help working people to
overcome market failures is there for
everyone and does not intentionally or
unintentionally hold back anyone back
from may then making their next move
this more neutral policy stance that I’m
describing can sound to many like a
retreat of government from intervening
in the labor market that’s not the case
effectively supporting an Occupational
eMobile labor force with probably and
will probably entail more policy action
and more public resources not less
including in partnership with businesses
and community organizations this is an
agenda for policy action mainly at the
national and the state level where
responsibility for labor market and
regulation and social protection usually
lies but there is a role that cities can
play particularly in supporting moves
people’s moves from one productive
activity to the next offering what
economists call active labor market
support these are job search assistance
services intermediation services
incubator and entrepreneurship training
services coaching and mentoring a new
policy framework can and should be set
up at the national and state level but
few things beat the deep local knowledge
of city leadership and community members
in exploiting local assets to provide
these transition support services
effectively and efficiently to borrow a
metaphor from mining the people of this
border Plex region are at the coalface
of globalization the transformations in
the world of work that I’ve talked about
today are the life experience of many of
you in the audience you feel this
transformation sooner and keener than
other people in this country your choice
as a community is to support dynamic
working people to harness that
transformation for shared prosperity and
not stand in its way thank you very much
you
transformation that’s happening all
around the world it’s a transformation
that’s been going in fits and starts
over the last thirty years
and so in some places it goes unnoticed
this transformation is both a
consequence as well as a driver of
urbanization that’s the link to today’s
theme I’m referring to the
transformation in the way that people
work and it’s happening fastest in
cities I’m an economist which to quote
one of our best ken Galbraith can mean
that I exist mainly to make astrology
look scientific and respectable but it
also means that when it comes to
urbanization and the quality of cities
I’m particularly interested in the
promise of agglomeration the word
agglomeration conjures up a slightly
different set of expectations and
economists than a dozen normal people we
excitedly anticipate things like
declining production costs and network
effects increasing returns and economies
of scale in plain English we expect that
when clustered densely together what we
call the factors of production land
labor talent and capital are going to
achieve a greater productivity than just
the sum of each part and that this
superior productivity will at some point
become self-perpetuating an engine of
growth and development this is about as
close as economists get to waxing poetic
or a pretty dismal and dry Bunch after
all one of the best-known urban
economists Edward Glaeser of howl of
Harvard University proclaimed
agglomeration to be a triumph of cities
but this triumphant outcome is by no
means guaranteed plenty of things can
get in the way
as any of you know that has spent time
stuck in a taxi in the clogged roads of
Mexico City Bangkok Salle Paulo Jakarta
and even Manhattan congestion can also
result from urbanization and can raise
the cost of doing business
agglomeration is not automatic other
speakers in this series have no doubt
highlighted the importance of connective
infrastructure such as freight and
commuter rail bridges roads
bicycle lanes pedestrianised areas
sidewalks to other overcoming barriers
and keeping transportation costs within
and between cities low the people of El
Paso and Ciudad Juarez know better than
anybody why it’s important to bridge
Geographic political and cultural
barriers in order to sustain and share
prosperity but I want to talk to you
today about a very different sort of
infrastructure it’s less visible and
less tangible but no less important this
is the policy and regulatory
infrastructure and particular labor
regulation and social protection
policies by labor regulation and social
protection I’m referring broadly to the
legislated definitions of the rights and
responsibilities of firms as employers
of individuals as workers and of
government as the agent of our common
greater good in the United States as in
many countries this policy
infrastructure was put in place in the
late stages of the industrialization
process or during the interwar period
think of Roosevelt’s New Deal and was
fortified in the decade after the Second
World War like home ownership a white
picket fence and 2.4 kids the
aspirations norms and institutions that
took hold during this period remain a
powerful point of reference
even today intended to achieve a greater
balance between working people and firms
and to correct many of the market
failures that economists write about
this policy infrastructure was designed
to support the way that people worked
back then at the time the common path
that most people followed went directly
from school sometimes through vocational
training or university into full-time
work usually for someone else for those
who detoured off this path there were
few clear ways of rejoining by their
late teens and early 20s most people
were looking for an entry into factories
and firms that would provide a long
employment ladder that they could climb
steadily rung by rung although rarely
stated explicitly the implicit
expectation both held by workers as well
as employers was that if they worked
diligently they would remain inside of
the firm
and rely on what economists call
internal labor markets for their career
advancement the labor regulations and
social protection that societies put in
place at that time supported this model
fairly well unionization and the
strength of collective bargaining
agreements were based on enduring
occupational categories such as welder
machinist service employee cabin crew
unemployment was a rare relatively rare
loss for which workers and firms could
pool risk and insurance schemes with the
help of government pension plans
rewarded long tenure and the firm was
assigned enormous responsibility for
implementing social policy in the United
States this is especially the case with
health insurance in other countries the
delegation of agency by governments to
firms can be seen in the financing
channels and the eligibility conditions
and monitoring of national social
security systems designed to protect
people from losses associated with death
disability in old age but all of this
rested on three foundational assumptions
the first that most people have a single
economic activity throughout their lives
a job
second that most people work full-time
in a subordinate relationship for a firm
and third that their occupation and
employment will be stable over a long
term the relevance of this resulting
policy evidence as edifice as well as
the foundations upon which it is built
are being threatened by rising tides of
change technological innovations and
automation regional and global economic
integration with production chains whose
links cross vast Geographic expanses or
like here in El Paso even national
borders and population ageing which
demands that we remain productive for a
longer portion of our lives and as I
suggested before these tides of change
are rising fastest in our cities we
observe their impact in the day to day
experience and perceptions of businesses
and working people alike it’s less
viable for firms to encourage long
tenure or to explicitly offer people the
security of clearly
and career progression digital
technology and Internet platforms drive
down the cost of organizing production
through markets of many small
specialized providers market based
production models of this sort looked
cheaper when compared to the cost of
relying on large vertically integrated
hierarchical firms employment disruption
is becoming more frequently people are
moving within and across industries in
and out of occupational categories in
far greater numbers career change
occupational fluidity and holding a
portfolio of income rather than just one
full-time job is becoming the new normal
for many people in setting aspirations
particularly for young people and cities
let me bring this back to the promise of
agglomeration and the threat of
congestion cities work best when people
and goods can move around easy easily
quickly and at low cost in the same
spirit agglomeration is more likely to
be the outcome of urbanization if the
economic factors land capital labor and
talent remain dynamic capital is very
mobile we don’t have to worry about that
so much anymore city planning urban
design and engineering have made
enormous advances and improving
connectivity permeability and to lower
transportation costs and more flexible
zoning and planning laws can accommodate
changing demands for the use of land
which would otherwise be immobile
however prevailing labor regulation and
social protection still assume the
stable mainly subordinate employment
relationships of the past and that once
in a particular occupation or in on a
particular job ladder few people will
move to another but in doing so they are
holding cities at a lower level of
productivity than they otherwise would
find to achieve abomination people that
are clustered together in cities need to
associate around a shared enterprise
carry out that pursuit be free to
disassociate and to reassociate with
others on the next project in the most
economically vibrant cities San
Francisco London New York a working
person can have several such productive
associations and in several
different capacities sole trader equity
partner employer employee freelancer by
defining legal roles rights and the
responsibilities of government to
citizens based on where and how a person
works labor market regulations and
Social Protection can get in the way of
this dynamic process the current code
assumes labor and talent will stay in
place which is just the sort of
stagnation that can keep a glom eration
from ever taking hold and by delegating
too many responsibilities for
implementing social policy to employers
businesses can be burdened with
unnecessary cost and people are
constrained from moving or taking on
several different productive roles in
the u.s. we observe job lock as
individuals depend on employers for the
quality of their health care in other
countries movement can be similarly
discouraged by industry specific wage
scales or pension plans or firm based
income support schemes in the case of
dismissal in a path-breaking book from
widgets to digits employment regulation
for the changing workplace catherine
stone a leading professor of labor law
at the university of california los
angeles argues that the fundamental
problem is that labor regulation has not
kept pace with the transformation in the
way that people work this might be less
a problem in countries like the United
States in the United Kingdom than in
other countries where government has a
heavier hand in the labor market however
even if less acutely the contradictions
between what is written in the code and
what is economically viable for
businesses and how people need or indeed
prefer to work are creating growing gaps
in coverage that contribute to economic
inequality anecdotal accounts of firms
offering people only less than full-time
employment to escape mandated worker
protections people hired and kept on as
freelancers performing the same tasks
and working the same hours as regular
employees and the growing discontent
Amend many who work through digital
platforms such as TaskRabbit or uber
these are just the tip of what could be
a very large iceberg we’re moving fast
through the fourth Industrial Revolution
of digital technologies and
cyber-physical
systems but equipped with regulation and
social protection policies that were
written for the age of the mass
production assembly line the
inconsistency between prevailing
policies in the way that most people
actually work is even greater and more
problematic in the emerging market
countries of Latin America Asia and
Africa in these countries the labor
regulation and social protection models
of the industrialized economies were
adopted when most people were still
working on farms in rural areas and only
very few were working in factories and
firms these policies fit poorly the
diverse world of work in emerging market
countries that poor that poor fit may
partly explain why so many businesses
and people in these countries work
beyond the reach of regulation in
taxation in the so called shadow or
informal economy some scholars argue
that imposing late industrial era labor
regulation in pre-industrial economies
may be a culprit for slowing down their
transition out of predominantly low
value-added agriculture and propelling
the growth of cities that suffer more
from congestion than they benefit from
or glommer ation so what is the way
forward what are the labor regulations
and social protection policies that will
support successful cities I argue for a
new policy infrastructure built on the
assumption that throughout their lives
people will work in lots of different
ways in which supports these people as
they move from one productive
Association to the next this shift in
policy approach is needed in countries
all around the world the shift will be
harder in places like France where the
labor code is longer and more
prescriptive than it is in the United
States but there are common steps that
need to be taken to bring the shift
about the first is to recognize that
successful cities require policy action
across a lot of different policy agent
areas dynamic labor markets are just one
ingredient of agglomeration the second
step is to scrutinize labor laws and
social protection for any intended or
unintended biases that favor some forms
of work over others and for possible
emissions and even exclusions of new
working forms from the rights and
protections that we’ve put in place
the third step is to amend these
policies or indeed to replace them
outright so that the hand governments
extend to help working people to
overcome market failures is there for
everyone and does not intentionally or
unintentionally hold back anyone back
from may then making their next move
this more neutral policy stance that I’m
describing can sound to many like a
retreat of government from intervening
in the labor market that’s not the case
effectively supporting an Occupational
eMobile labor force with probably and
will probably entail more policy action
and more public resources not less
including in partnership with businesses
and community organizations this is an
agenda for policy action mainly at the
national and the state level where
responsibility for labor market and
regulation and social protection usually
lies but there is a role that cities can
play particularly in supporting moves
people’s moves from one productive
activity to the next offering what
economists call active labor market
support these are job search assistance
services intermediation services
incubator and entrepreneurship training
services coaching and mentoring a new
policy framework can and should be set
up at the national and state level but
few things beat the deep local knowledge
of city leadership and community members
in exploiting local assets to provide
these transition support services
effectively and efficiently to borrow a
metaphor from mining the people of this
border Plex region are at the coalface
of globalization the transformations in
the world of work that I’ve talked about
today are the life experience of many of
you in the audience you feel this
transformation sooner and keener than
other people in this country your choice
as a community is to support dynamic
working people to harness that
transformation for shared prosperity and
not stand in its way thank you very much
you
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