Project Untangled

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Project Untangled



    If we are about to enter a golden age for workers, marked by higher wages, better working conditions, and the eradication of particularly hazardous tasks, then the trajectory of technological progress and the shift toward a green economy must be meticulously guided. Policies must be established to ensure that no one is left behind. This is the pivotal takeaway from the recent UNTANGLED debate.


    During the 22 November online debate, part of the final conference of Project UNTANGLED, moderator Karolien Lenaerts (HIVA-KU Leuven) posed the question of whether we are approaching a golden age for workers. In response, most panellists agreed that the growing labour shortages are exerting upward pressure on wages and working conditions, theoretically brightening the prospects for employees.


    Frank Siebern-Thomas (Green, and Digital Transitions, Research Unit, DG Employment, Social Affairs and Inclusion, European Commission) highlighted that three-fourths of European SMEs currently face skills and labour shortages, while two-thirds of European companies cannot find IT specialists. While optimistic about worker prospects, he underscored the risks and structural challenges that EU governments and firms must address. These challenges include reskilling the European workforce to adapt to evolving job roles resulting from technological advances and the transition to a green economy.


    Siebern-Thomas also noted that the European Commission is aware of these challenges and committed to addressing them through initiatives such as the European Year of Skills, focusing on upskilling, training, and innovation initiatives across member states.


    “Is this a golden age for workers? Maybe, but much depends on policies and their effective implementation,” Siebern-Thomas said.


    Melanie Arntz (ZEW), also optimistic about workers’ prospects, emphasised additional challenges that must be addressed for a golden age to materialise. She said particular attention should be directed to taxes and transfer systems and how they create incentives for working full-time. Arntz also raised concerns about AI and other technologies potentially devaluing certain skills and knowledge, leading to declining returns on formal education.


    “It will be more difficult for people to guess what the return on formal education will be, which means they may underinvest in education because they might not be sure how much they’ll get out of it,” she said. “Therefore, we should provide as much transparency as we can on all these trends, so people can orient themselves around this new labour market.”


    Arntz also highlighted another challenge: technology-driven mental stress among workers.


    Marguerita Lane (Future of Work team, OECD) focused on the positive impact AI can have on the workforce. She highlighted the technology’s potential to boost productivity, alleviate sluggish growth, reduce the need for human labour in routine and manual work, and liberate workers from unsafe, repetitive, and monotonous tasks. Lane stressed that AI also has the potential to bridge inequality by enabling lower-skilled workers to level up. Similar to previous speakers, Lane emphasised that these positive outcomes can only materialise with the right policies and social safety nets in place.


    “It is about policy choices; in this disruptive time, we need a smooth transition, and for this we need public services, governments, and companies to support workers displaced by new technologies,” Lane said.


    Robert Stehrer (wiiw) took a less optimistic stance on the prospects for workers. Citing recent literature, he argued that the impact of new technologies such as AI on the labour market may not be very significant, and might not help overcome labour shortages. Stehrer also highlighted that the shrinking and ageing of the EU population places a burden on the healthcare and pension systems. According to Stehrer, it is plausible that we are entering a period of secular stagnation: a prolonged period of negligible economic growth.


    “Even if there are higher wages, these will need to be taxed to meet the demands of the healthcare and pension system,” Stehrer concluded.


    The discussion also covered areas such as working conditions, the challenges faced by platform workers, the potential and the difficulties of undeclared work, opportunities for migration to the EU, and gender dimensions within the workforce. Additionally, it explored how the evolving labour market is influencing the welfare state.


    The UNTANGLED debate sheds light on the broad and diverse landscape of opportunities and challenges that makes up today’s labour market. The path to any golden age for workers must pass through that terrain, and technological advances in and of themselves aren’t enough to ensure a safe journey. Instead, it will require thoughtful implementation of policies that uphold the well-being and resilience of the workforce in the face of unprecedented changes.


    2021 © UNTANGLED. All rights reserved.
    This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 101004776

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