 Well, good morning, everyone, and thanks for coming to a kickoff session here at the World Economic Forum, Decoding the Future of Work, Promise, or Peril. I'm Megan Murphy. I'm the editor of Bloomberg Business Week, and I'm thrilled to be here with such a distinguished panel on what I think is truly in a week where we're going to see a changeover in the U.S. presidential administration. Certainly the key topic that is animated certainly the last two years of my life and I think is really the key question going forward in looking at how we're grappling with one of the biggest challenges of our time. I'm joined today by an incredibly distinguished group of guests. To my left, Alan DeHans, the CEO of ADECA, C.E.V.J. Koumer, who goes by CDK. He told me to call him. He's the CEO of HCL Technologies, Luis Moreno, the president of the Inter-American Development Bank, and Philip Jennings, the general secretary of the Uniglobal Vision and Global Union, sorry. And Philip, I wanted to start with you this morning. Yesterday you made some pretty provocative comments on this topic. You said we are moving down. The digital revolution is in the hands of a small number of tech companies that are driving down to a low-wage world. It appears the race has reached the bottom in a barely survivable low-wage world. Have we really reached the bottom? And is it really fair to say that a small number of technology companies are driving us down? And what do you see as the future of work given that dynamic? OK, the big five is a reality. The big five companies is a reality. This is going to raise all kinds of issues about governance, about ethics, about the business model, about their sense of responsibility to the broader community and to the world's workforce. I say these things because the state of the world's labor market is already in crisis. 3.2 billion people in the world's workforce, one in two in vulnerable work, in the OECD, one in three in vulnerable work. And the share of wages and the wealth produced is in decline. Now, David Bowie said, tomorrow belongs to those that hear it coming. And therefore, we do a lot of listening. And the statistics and the research and reports that we see, you find a small group of people saying, Philip, don't worry. It's all going to be all right on the night. The jobs will come. But the people who've done the research from the World Economic Forum to the OECD last week, McKinsey, have shown in very stark terms that the world of work faces massive change. And the peril is we will not be able to generate the same level of employment that we've done in the past. Therefore, what we are seeing is already a race to the bottom, which will become accentuated by the jobs crisis that we will see. We've tried to hear tomorrow coming. And the news that we get is difficult. It's black in terms of the labor market. And what we want to do is just to ramp up attention, get more political attention. Otherwise, the political backlash that we have seen will continue and amplify. People feel abandoned. They feel vulnerable. They're looking for a better future. And therefore, there are choices to make political and other business about how we are going to try and maintain employment and to give people a reasonable standard of life because it's not happening today. So I'm in the peril camp. You're definitely in the peril camp. That's clear. If he's the peril alarm, what's the promise? Where can companies like ADECA, what is the responsibility of corporations when we see this incredible, as you're saying, people feeling disconnected, people feeling dislocated? And mostly people concerned that the future of work doesn't exist for them. They lack the skills. They're going to be automated and their jobs are going to be done by robots. No, I can fully understand this position and the perception, the feeling that a lot of workers, a lot of people in the world have. On my side, what I say is that we shouldn't oppose technology with work and the future of work. And I would like to illustrate this. If you come back to 1900 in the U.S., 40% of the American population was active in the agriculture. 100 years later, instead of 40%, you have just, I would say, 2% of the American population being active in agriculture. And at the same time, we have one of the lowest ever unemployment figures in the U.S., 4.7%. What does it mean? It means that the world is permanently changing and for sure technology is making its inroad. But new jobs will be created, new type of jobs, new industry will be created. For sure, there is a kind of this alignment between sometimes desperation of job or destruction of job and creation of jobs. And or my message here is that, yes, we need a connectedness between business, between government, between education to make sure we can create as many as possible jobs while the technology is making its inroad in the business. This is the example everyone uses, Louise, the sort of American industrial revolution in the late 1800s going into the 19th times, exactly as you said, that we had a largely grand population equipped with largely agricultural jobs. And through that industrial revolution, people moved into other manufacturing jobs and that seismic change is very similar to what we're saying. I'm not sure I necessarily buy it to be sure. I think we see disruption across the supply chain and we'll get to this. But when you look at Latin America and you look at the experience there, where it is an incredibly diverse workforce and people moving up the skill chain is what he's saying right, in that we are gonna see as much job creation as we're gonna see job destruction and is that gonna be as geographically diversified and spread or some locality is gonna benefit more than others? Certainly a lot of this has to do with the stage of development of a country. And of course, all those risks exist. I mean, even though Latin America, for instance, is the most urbanized region of the world, people have more cell phones than the average population and the total numbers in the population. One of the things I think we often miss is two very important areas. Is the notion that work as we know it today is very different from before as Alan was describing. But more importantly, is how you concentrate on the life cycle of people. I mean, the whole question of skills is going to be changing over time continuously. And therefore, the ways we think about education, the way we think about skills are very different. Let me give you an example of a company that I don't know as well, which is Manpower. They traditionally do studies to determine how difficult it is for companies or businesses to find people skilled for the jobs. And in the case of Latin America, 50% of the jobs that they need to fill typically are not there because there is a skills gap. So I think that's an extremely important part. To Phil's point, he's writing that and that McKinsey reported that he referenced the fundamental question is how growth in an economy can continue. Because if you don't have economic growth and if you're in a low growth environment, this issue becomes even far more complex. In the case of a region like Latin America, we are largely today either industrial or services economy and agriculture has come down significantly. You have cases like those in Brazil or Argentina where they have been able to triple their production of agriculture largely by technology and automation. It's not the agriculture that Alan was referring to. It is a very different kind of agriculture that is largely led by high precision agriculture, things around seeds, management of public goods. All of this has contributed to change significant agriculture. So how we think of services, which is perhaps the area where the most productivity gaps exist at least from one season in Latin American terms. But even in that study that Phil was referring to of McKinsey, it talks about that only 5% of jobs today are being largely affected by technology and being displaced. Let's finally, you know, Robin Chase, an interesting author was saying something that to me caught my attention in this regard. She says, if you look at your parents' generation, at best they probably had three jobs in their lifetime. If we look at our generation, perhaps we'll have 10 or 12 jobs over our lifetime. And our children probably will have 10 or 10, 12 jobs at the same time. And I think the nature of work, and I think this is an important part that I know Alan does a lot of work on this, the nature of work, it's a very important element that one needs to focus on. CBK, let me bring you in on that. I mean, we were discussing just before the session that in India, as expected, and you gave me this stat, that one million workers will join the workforce every month for the next 20 years, one million every month for the next 20 years. When you're looking at that and we're looking at, are these people equipped to have the skills, are they ready for exactly the kind of future of work where you're gonna have multiple jobs, where you're gonna go through the skill chain, where you're not gonna work just three jobs, you may have multiple jobs at the same time, are we doing enough to equip that workforce, and is India ready for that influx of supply, as you were describing? Yeah, even before I address the specifics of India, I wanted to just bring a slightly different perspective to this problem. I think there's a lot of emotion that's built around the same topic, but the best way to look at it is, it's really a supply demand management, you need to establish an equilibrium between supply and demand. For example, it's believed that 500 million new workers would come into the market by 2020, which is just three years. A part of it is because of the unemployed workforce who are already there, and the new people who will come into the job market in the next three years. While that's a very large number, we also hear almost 40% of the companies in the world do not have the right talent to do what they have to do. So there is a huge skill shortage at one end, and there is a huge supply of employable base. So I think the best way to deal with this is to really use some of the best techniques used in supply demand management. Like how have we managed the supply demand situation of commodities, equities, derivatives? It's the timing of availability of resources and the price at which they're available. That really determines and creates an equilibrium between supply and demand. I do believe very same solution approaches will help us quantify this and solve it in a very scientific manner. Coming to India specifically, yes, you're right, a million new people will come into the workforce every month for the next 20 years. And if you want to just compare, that's equal to the population of Sweden coming into the workforce every year. So this problem is also magnified by the demographics, by the geographic differences, all of that. And in India, I think there is still a significant gap between the education and employability. I think that's the big gap which the industry is continuously trying to fill. And in the technology industry, we are continuing to invest. We have very large programs to manage the talent supply training and development, upskilling, all of that becomes key priorities for us in the technology industry. CBK just referred to this as a supply chain management issue in terms of matching people with the right jobs and upskilling, he also managed the emotion around this. We chatted and I told you that I had the privilege of talking with the outgoing president about this topic and about this political problem of are we being honest enough with this workforce about what they need to do and what the skills are required to do. And he was quite clear about saying, it's very difficult for politicians, and you reference this, and to say to people, your jobs are disappearing and I can't assure you that the future of work that you thought you had exists anymore. Is it really a political problem in terms of being, have we been as ruthlessly honest with youth in particular, with women in particular, with people struggling to get about the kinds of jobs they're going to be looking at and the skills they need, or is it that we're not doing enough to equip them to have those jobs? A politician has short term views, a short term vision, it's the next session of Congress, the next session of parliament, the next regional election, the next local election, the next national election and sometimes the long term piece doesn't get space. I think that there should be a frank recognition, perhaps the G20 when they meet in June could raise this about the lack of preparedness that we are, that the lack of the preparedness which exists in this world to deal with the nature and the scope and the depth of change that is coming. Therefore, it's part of our work to try and bring this sense of reality and to use the evidence that we see, the older things that we talk about are evidence-based and I think there is space to do something about this. And therefore what can a government do? Does the government say we leave it to the market or does the government say we can make a constructive intervention to help our people through the storm? Governments in the past have developed their social safety nets, they developed their employment agencies, their labor market policies and so forth. This needs a massive injection of political will and adrenaline. If you look at the amount of money that is spent, for example on active labor market policies, now I'm not talking about unemployment insurance, if you look at the amount of money that is spent in the OECD area by governments to help people make this transition to help them get from one job to another job to try and provide the skills and to provide those labor market mechanisms, it's less than 1% of GMP. Now NATO has come up with the decision that they want 2% of GMP as a minimum to be spent on defense. So if I was the labor minister I would say I would like to spend at least as much as you in this regard. We have to invest in these institutions and we have to also change the business mindset about their business model and about the rates of return required to ensure that they act with responsibility with respect to their workforce. Can things be done? Yes. Will it require heaps of political will? Absolutely. But we need new labor market mechanisms with the investment and the resources to help people through their working lives. And as it happens at the moment people have forgotten the apprenticeship system. When you go to school and you go to university then you may get some access to retraining. This has to be done for life. In the United Kingdom we changed the notion of what it was to be a shop steward. Now in the old days we may have blown a whistle and stopped the machine or whatever it was. Or we may have blown the whistle because the shop steward was overbearing. Do you know what we do now? We've got 100,000 people in workplaces whose job it is to be the godmother because they're usually women for training at the workplace. I.e. they engage, not the business, the union, they talk to their workers and say look there's training opportunities here. The world is changing, this business is changing. Now take advantage of them and as a result we've had millions of people who have got access to new skills and training and I think that is the way forward. Partnership, recognizing you can't leave this to chance and a clear government responsibility and when you stand up and make this promise to people then I think you'll find the political support in the world to do something about it. A lot of you've been very involved in apprenticeships and that system and sort of thinking and bringing that in and trying to really support that through what you've done as well. In this sort of work for life and one of the things I think that's always fascinating when you sit in America is the lack of more formalized apprenticeship training about really equipping people for these skills and as these changing skills that you need. Where do you see the government support for apprenticeships? What more can be done there? Where should it be expanded? How critical it is to really vest in that from corporations and from governments as well. I can only support what Phil Jennings has said regarding the need for apprenticeship and this is also linked to the sense of reality you were mentioning, Phil. It's not the future, it's today. When you look at the youth unemployment everywhere in the world, it's not linked to Europe or the US, everywhere youth unemployment is at a double rate of the regular national unemployment. In Spain, 45% youth unemployment. In France, 25%. But also in the US, more than 10% when the regular unemployment rate is at 4.7%. And we see that in the countries having deployed this apprenticeship model since decades like Switzerland, like Germany, like Austria, in these countries you have, let's say, very low youth unemployment. And why is it this? Because you have a permanent, a permanent adaptation of the business needs, the business reality with the education system. So it means that the apprentice will get the current knowledge they need to enter in the labor force. And that's why it is so productive for the companies also to invest in the apprenticeship, but also for the government to invest because they know with this investment, they will get immediate employment. If I look at the system in Switzerland, it is a four years apprenticeship model, it's a black zero as we say here in Switzerland. It means that it won't cost money. And immediately the company will get the right profile with the right competencies. So yes, this is a system which should be really pushed, developed all over the world. And yes, it needs connectedness between the business so that the business can give the needs they have. It needs connectedness also with the education to make sure that the education system is delivering the right program according to the business needs. And finally also with the government because in a lot of cases you need also some kind of financial support, not only financial support, but also regulation. We made a very interesting test in Kentucky in the US, very successful, but we had to adapt some role, some local role, because it was not allowed to put young people 15 years or 16 years old at work. So it needs some... But did you get that regulation changed to be able to do it? We got the regulation changed. And that's why I'm chairing the Global Apprenticeship Network. And that's why the Global Apprenticeship Network is a coalition between companies but also government bodies because we know in a lot of countries, including in South America, we have done that in Mexico now, in Argentina, we need to adapt the local law. And we need these international government bodies to help us to adapt the local law in order to put in place the apprenticeship program. Louis, speaking, just diving a little bit deeper into youth unemployment. As we mentioned, we see these rates that are extraordinarily high in Europe, it's as double in the US as well. How much of a problem is it where we're seeing workers, older workers, basically filling those jobs that younger workers that are no longer open for them to sort of start and move up the chain? And how much is this a demographic issue and how much of it is an economic issue and how much of it is actually a political issue to solve? Well, it's all over the above probably because... Look, going back to what Alan was saying on apprenticeship, if you look at most emerging countries, and in Latin America specifically, Alan was mentioning Argentina, two-thirds of the job market as we know it today is threatened by automation. That means the impact of automation will change the job market as we know it in countries like Argentina, U.Y. being perhaps on the top of the list of 60% of the jobs being affected. What have we learned? First of all, the notion that as you think of education to focus not only on the quality of teachers on early childhood development, but the whole notion of the transfer from skills to work. And this, as Alan was saying, has to start very early because if it doesn't, then once you get out of school, that's when the problems begin. And certainly like in India or in Latin America where we still have a demographic bonus where the average age is about 27, the chances of having larger pools of unemployment in the younger ages is much higher. What have we learned in the kinds of solutions? Because you can always find solutions for 100,000, 200,000, perhaps a million. The problem is when you get into the tens of million of young people, how do they find jobs? Some of the things that we have done are the combination of apprenticeship programs that take place with the combination of skills training and actual work training in a particular company. So this is where you have to match. Whatever the government input is being done in terms of paying for an apprentice, the way that companies lock into and begin to look at what kinds of skills they need for the workers that they have. And our experience has been that people that undergo this process typically have a higher chance of getting a job as opposed to somebody coming traditionally off the education process and trying to find a job. In terms of people wanting to stay longer in the labor force, I think there's another element that you need to fit into this which is where are the retirement ages in companies? And certainly being that we're a young hemisphere, we're starting now to see that in the next 15 or 20 years we're gonna get moving into our average age is going to increase, which means that we have to enter a very difficult discussion which is about pension reform and about retirement ages. And many countries, Brazil is undergoing a major reform in terms of increasing retirement ages. And that nobody likes because at the end of the day is you increase retirement ages, you don't necessarily, the contributions will match. This is going to be another hugely important problem. But at the end of the day, I think the fundamental part to dealing with these technology challenges is the notion that throughout the life cycle of a person you continuously are doing forms of education. I think this to me is the single most important part of being able to keep people in the workforce. I'll give you an example, we did a program in Peru. Women who had finished at least one or two years of college were unemployed and basically went into a process in which they were totally focused on learning code, just women, and they went back, studied for hours and hours writing code, and now they're going into the labor market. No experience prior. No experience, zero experience before. I mean, no kinds of ability. This is the kinds of things that the job market is. What age group? The ones that are basically in this program are anywhere from 21 to 26 years old. That's amazing. CBK, just talking about that, we had been talking earlier about matching and sort of how this sort of almost constant trying to match skills with job is a key part of solving this challenge. When you look at technology companies and you look at technology in general, what can be done to better facilitate to actually, as you referenced earlier, supply chain management issue, but to do a constant sort of matching of skills to the labor supply available? Yeah, I think there are some of the conventional thinking probably needs to change in this area. I'll give you some examples. Generally, we are all used to a life where you spend 15 or 20 years in education and another 30, 40 years of work and then retirement. I think this needs to be replaced by a lifelong learning and a lifelong work. I think that kind of fundamental shift is definitely required to really address this supply demand challenge. Another thing is we're all used to eight hours of work a day or 40 hours of work a week, but do we really need to do that? Why not do very high quality work for just two hours a day? And while a lot of commoditized, I mean, I see those are the opportunities. I think you have opportunities to do so many creative things. Like for example, some of the routine jobs in the technology industry, like system administration, scripted routine tasks or continuously getting automated. However, system engineering, system design, design thinking, user experience design, all of that cannot get automated the way it is being talked about. So I think it's just visualizing what will get automated, what is more commoditized and what requires some creative thinking which requires a very high level of empathy and user experience and things like that. And then really shifting your skill-based to really do better things in these areas and doing less of this commoditized work. It's just the fundamental change in the nature of work which is driving this. So what you're really saying there, even though you said it in a nice way, is that there are some jobs that are still gonna require humans and there are some jobs that aren't. And you said it very nicely. But I wanna, let's talk about the elephant in the room and let's talk about the gig economy and let's talk about wide sectors and wide swaths of industry no longer requiring humans to actually do them. And let's talk about, Phillip, let's talk about what kind of protections are in place for workers who are in sharing economy, who are doing, as you say, maybe only two hours of work a day, maybe six hours of work a day, maybe working multiple different jobs for different hours, whether it's Uber, whether different kinds of whole systems that we've seen crop up. How do we make sure that those workers are protected? How do we make sure that longer-term we still have them fitting into the retirement system and that not only are they benefiting the economy and benefiting us as a society as a larger, but that they still have the protections to protect themselves. Follow the theme of Davos responsibility and responsible leadership. Too many games are being played. Too many business people are playing fast and loose in terms of their relationship with their workforce. And it is clear we have to rethink the employment relationship once again. And we are seeing the growth of bogus, we would call, self-employment, numbers of rocketing, 48% increase in some countries, I think in the UK if I'm correct. And therefore we are seeing a manipulation of the current labor codes that we have to avoid them. And this is not a responsible solution. And therefore what people are beginning to argue is that you have some kind of engagement where there is work involved, where you are working to somebody else that in fact you have an employment relationship and you should be embraced by the labor code and then you should be able to make your contribution. Now this is a conversation in its early stages until now this has been defined very much by the Growth and Temporary Agency work, which Alan knows very well, where we have a social contract between us that there's gonna be fair play. And when we saw the first growth of precarity in the workplace and the breaking of the model between ourselves as unions in many countries and at a global level, we have an understanding with one another that this will be done responsibly, that social insurance will be played and that there will be responsibility. There are lots of abuses that need to be dealt with. So I think a redefinition of the employment relationship is important. The gig economy and we are beginning to see these legal victories taking place across the world where this idea that you are not really dependent on an employer or dependent on a business system, which then means you escape the labor laws is no longer an acceptable way of doing things. So we're on it and we are pushing at all kinds of levels to make sure that our employment relationship is there and it will be uncomfortable for some of the new organizations, the new businesses, but they also have to understand. What do you mean it will be uncomfortable? Well, because their governance model would suggest otherwise, that they don't have this responsibility towards people, whereas employers doing the right thing have a very clear sense of responsibility to their people and they follow their legal obligations and they try to do the right thing in a very competitive environment. So they need to wake up to the fact that they got responsibilities to the people. On platform work, they say 15 million people are now engaged. It's a very, it's a global workplace. Anyone can compete for the business, but people don't know who they're working for and people don't have any idea of what the kind of rates are. We've looked at some of the stats that it's been done, Oxford University have done research. People are spending 18 hours a minimum, sort of trolling around the internet looking for work and then they're being paid pennies, pittance. There's no standards there. There's no code of ethics there. There's no sense of fair work there. So we need some more transparency and we need some responsibility. Now I know the younger generation have this entrepreneurial spirit that they want to. They might not be interested in working for large public, private organizations, but even so, there has to be a sense of responsibility towards them and that they also have to understand that they have to prepare for their tomorrows as well. So I expect skirmishes on employment relationships, skirmishes in terms of driving home the responsibility that people have to the workforce and then an understanding that in the gig economy people still have to make a life. And Ubu will tell you that their drivers cannot really make it. But that 400 bucks that they earn a month is the difference between being able to pay a healthcare bill or not but it's not a permanent place of income and then if you don't get this right the political consequences will be severe. People already feel abandoned and vulnerable. This will just make matters worse. Let's carry that theme through on responsibility. I mean you specialize in placing temporary workers and making sure that people have this sort of relationship and then they can transition from job to job. Is he right in that it's only going to get worse or do you see this kind of disruption in the gig economy actually being a positive impulse? It's a development and it is a trend we are observing all over the places. So when we speak about 30% of the workforce being in another three agents in the US or even in Europe today, we see that the younger generation are preferring that kind of let's say status rather than to enter the word of companies for life long career. You think it's because there's no other choice for them. Sorry for the interview. Please. It's a labor market today. It's your job opportunities and what choice do you have? I know this argument, but we have made internal study. We have made internal study and we see that 23% of our temporary staffer has taken a deliberate choice to work through temporary staffing because they want some kind of freedom, flexibility in the time in the job they are choosing and so on, 23%. Okay, but how many of that have you done the breakdown of our women and how many are men? Oh, you know in the temporary staffing we have quite a very good balance between men and women that's very well balanced there. We have good diversity of profile. But I would like to, so first of all, for me this free lens trends is here to stay because it is a choice of the younger generation to come, which in 2020 will be 75% of the global workforce. So it is a big reality and we have to cope with that. We have to cope with that in the business. How do we attract these young millenials and these freelancers? How do we retain them? Because we know they want to go from one project to the other. They want very interesting things to do. They want a strong purpose. They want to make impact in life and in the company. And how do we employ them further? We retain them. That's very important. We administrate them and for sure it brings to all the parties, government, unions and for sure the business a kind of new challenge. What kind of regulation do we have to put in place to respect and embrace this trend which is there? It's a sociological trend but on the other side to make sure we offer not only flexibility to our customers but also security. And I fully agree it is very important. That's why I think and I'm persuaded that for example temporary staffing or the way we are treating flexibility when dealt with companies like us is the best way is the most safe way to offer and flexibility and security. Luis I've got to have you weigh in on this, on the gig economy and sort of looking at it and the longer term ramifications. Are you in the peril camp or are you in the promise camp on this one? Look I think Philip is right that the whole sharing economy changes the dynamic of the conventional contract that exists in between employer and employee. This is absolutely the case. On the other hand, if you look at, this is not true for all countries but take the case of the United States. There's a recent study that J.B. Morgan did that basically demonstrate how people's expenses are pretty much fixed over a year's time and yet their incomes vary tremendously. So that's what explains people wanting to do all of these sharing type of jobs precisely to fill those gaps. I do believe however that more and more especially people who are unemployed who have the skills to be able to be part of the gig economy especially from youth unemployment. You see them filling in these jobs very quickly. The case I was giving you of women writing code is fascinating just, I mean this is a small case but the reality is how never in their life they think that they would be part of something like this and they're ready in essence once they go through the process of learning which will take them anywhere from eight to 12 months they are ready to go and have a business of their own or perhaps work with a temporary company where they are going to be doing a variety of jobs. It's just the nature of and perhaps a dynamic of the service economy as well because I think services are very much integrated in this way and they all are every day compressing their margins and as a result this is what's happening to jobs but the larger question I think in the job market is if wages at the end regardless of how they come do they remain stagnant or are they growing? And I think this is the single most important thing and this is what is creating a lot of the tensions around the world. When you see a country like United States and other developed countries where wages have remained stagnant for periods of 10, 15, I mean 30 years that to me is the single most important question to determine and that's I think something that is important to probe the reasons of why this is happening and that is what I think is creating a lot of the anxiety regardless of the fact that people see what people are using technology and they realize today with artificial intelligence and with cognitive intelligence going forward all of these things are gonna happen regardless of what we decide here. I think it is the nature of innovation. Innovation has always destroyed jobs but created jobs and the question here is the adaptation to them. And I think this is where there's a huge role for business but equally for governments. Let's talk about that. All the companies engage, the platform economy and the companies out there and not engage in what I would say a real constructive dialogue with the people that I represent. Well let's talk. They're reluctant, they're reticent and therefore that is shutting down the opportunity for them to become more responsible and more responsible employers. And that is a way that we can try and recover the responsibility space which is not there at the moment. But let's pick up his point on wages as well. When we look in the US and we look at 4.7% unemployment one of the biggest mysteries which everyone is trying to solve is why we haven't seen the consequent wage growth that we would expect when we see at such a tight labor market but we still see wages now picking up actually at 2.9 year on year for the last in December but moving forward how do we expect that why do we see this phenomenon? And this is something that everyone is grappling with. It's pretty clear, it's very clear. Tell me what your answer is. There's no mystery about it. Tell me what your answer is. The McKinsey report that came out looking at the development of corporate profits during the course of the last 30 years were very clear. They called them a spectacular period. It's been 30 years of feast and not famine for them. Their conclusion was that corporate profits had grown threefold during this period and corporate incomes had grown by something like fivefold. The share of the GMP that is taken by profit and that the profit world has increased now to something like 10%. The share of wages is at an all-time post-war low. The income distribution mechanism particularly in the United States of America is bust. When union density falls, when collective bargaining falls, when the ability of working people to negotiate a wage increase is taken away, is busted, is legislated out of existence, don't be surprised to see this trend. Income gravitating to the top, one 10% and the share of income going to the bulk of the workforce is not moving. The mechanism is bust. We can fix this in partially by minimum wage. We can fix this by a commitment to living wage and we can fix this by collective bargaining. Now it's an old kind of fashion term but the only way you're gonna have a fair slice of the cake is if you have more than one hand on the knife and at the minute we've seen in 26 of 30 OECD countries collective bargaining has gone. Therefore the mechanism that could stabilize this and that gave people a chance to win with increases in productivity which we see has gradually been taken away. So there's no surprise that we get to this end state that our ability to do our job has been taken away. And when Mr. Puzder becomes a secretary of labor in the United States of America it is only gonna get worse. Okay well I think we can dispute on the productivity whether or not that was a very serious situation. Analysis and I'm sure for people who don't know who Andy Puzder is he is the incoming well if he gets confirmed labor secretary with a shall we say controversial record on workers rights and wages. Just say bad. Before we turn it over to people who have questions I know you have a slightly different opinion on this in terms of what the answer is to drive up wages and I think the audience would be keen to hear it. What can be done. I don't agree that productivity is rising the way you say it. Solidarity may be part of the answer but I want to hear what Alan's thoughts are as well. First of all yes you are right the salaries and that's a good news Phil. The salaries are increasing in the US. This is the results of high activity and scarcity of candidates and as a result it's supply and demand. The salaries are starting to increase not only in the highly or higher skilled profile but also in the lower in the low qualified profile. So it is there at least very well distributed all over the profile. The 15 for 15 fight. The mobilization of American workers for a fair minimum wage should also not be discounted. The fact that people took to the streets particularly in the services sector sacrificed their work as created a situation where minimum wages have increased and that's made a difference. It absolutely has made a difference and it was driven by local campaigns and not federal campaigns. Local campaigns. Exactly and that's what we're more likely to see in driving up wages and getting there because we can't get that away with it. All right I want to turn it over to the audience for questions. If anyone has any questions there is a mic in the back. We're free to ask anything. No one has questions. We can continue our discussion. Any questions? Anybody? Anybody? Question? What's the impact of the universal basic income debate which is happening primarily around the impact of AI and automation and then you start to this whole conversation you guys had around peaks and traps. Is there the role of government? Is there a role of policy making to bring some level of baselining and then still allow technology, gig economy and all those different things to flourish? Do you want to say that? No you won't. I think the, if you look at the Doomsday scenario or the Paris scenario. You're very good at the Doomsday scenario. And then if you look at what all this analysis is saying and McKinsey said 5% of all jobs now would be gone. So we're talking about already tens of millions. When the McKinsey report looked at the replacement of manual human work by machines they said well it's in the foot, it's in a footnote somewhere. This is a billion people, a billion. So therefore our economies thrive on decent work, decent wages, full employment and all the rest of it and all of a sudden we're gonna be faced with a situation where perhaps this level of employment is not gonna be matched in the future. Therefore what do we do? What are the options available to us? And therefore this idea of a citizen's income or a universal basic income begins to take on an amplitude which is not just fanciful or dreamlike but it's something that is worthy of consideration. And I think the argument is out there, experiments are taking place in different parts of the world and I know in India there's a sense of guaranteeing a certain minimum wage in our world. We have a universal basic income through collective bargaining and where collective bargaining is in place we already have this very clear sense of what a basic income looks like in the industry. And therefore at the end of the day it's not just welfare, I think it's about economic activity and economic vitality that there continues to be a circulation of money in the system and then if we're working two hours a week we can find other things to do with our time and have a richer and a better quality life but I think that the debate on this is just starting and I wouldn't be surprised to see some of these experiments confirming that this is the way to go. CDK, what do you think? I'm tempted to come into this. While there is policy initiatives, universal basic income every business needs to be having a very responsible manner to address this challenge. I think we shouldn't take away the responsibility that each individual has. I think that's the whole theme in the sharing economy. You need to take control of your careers. You need to take control of the skills that you need to be relevant in the new world. I think there is equal responsibility on the individual as much as businesses and the public policies and things like that. As long as we're able to drive that message I think this imbalance will get addressed much more rapidly than the current. But there are so many individuals who want to take that responsibility and want to drive their own careers but simply lack the skills, lack the access to the right training to be able to do. Just let me give you an example. I mean while gig economies in the early stages sharing economy is new in the software industry, three years back only 2% of software programmers were really a part of a sharing economy or they were just working based on work orders that were available. That has increased from 2% to 10%. And while that is, that provides a lot of flexibility for the software programming world. And I know that that's an area which is going to continue to exponentially increase in how work is being sourced. Crowd sourcing is going to become a very, very common means of sourcing programming work. But because of that trend, the individuals who are part of that industry are also consciously looking at how to upgrade themselves, how to acquire new skills which will continue to keep them relevant as technologies change. I think it puts a reverse accountability and that's a very, very important theme which will drive a quicker resolution of this imbalance. Alana's personal responsibility, the answer here. Sure, there is personal responsibility. I would like to rebound on the question of the minimum wage because I gave a short answer. And invite Phil to look at the report we have published yesterday. It's the annual report on Global Talent Competitive Index. And we are analyzing 118 countries every year, according to 61 criteria. And the ability of a country to attract talent, to develop talents, and to retain talents. And I was looking back at the top 10 countries and none of them has a minimum wage. All of them has very low unemployment rates, starting with Switzerland followed by Singapore but also all the Scandinavian countries. So I think there is some best practices to look into the world on how to be successful as economy, economically, but also have developed your population giving a very good lifestyle because one of the key criteria to be successful in our study is indeed the quality of life, the quality of the environment, quality of the infrastructure, quality of education. And I think that there is not only one recipe being the minimum wage of, there are a lot of criteria on which countries, cities have to work. And perhaps we could take the time to look into details on some inspiration for that. In my world we say point of order. Point of order. If the countries that you've cited, you talk to the Nordic countries, it's collective bargaining that fixes the minimum wage. It is a negotiated settlement between the employer and the union which covers the bulk of the workforce. So therefore that is the model that has worked for them. And it's a model which also builds in a great deal of flexibility in terms of working practices and investment in people. In Switzerland more than half of the workforce is covered by a collective agreement, although there are now murmurings that with the social dumping that we see and the subcontracting that we see that there is a sense of a minimum wage. And also in Singapore there is a significant labor movement and in each of the sectors there is this commitment on basic incomes in the country. So we found other ways of dealing with this. Flexibility and security I fully agree. So you see that we have a kind of alignment on which we can work. But I want to bring in Louise here on this idea of the universe basic income. Because what I find fascinating about this debate is what you actually are both talking about is that where we're experimenting with it is in countries that have a low unemployment rate that sort of have that very secure social safety net that aren't blighted by the kinds of intractable labor issues that work. Do you think it's a good idea? Do you think it's something that will work? Look, I don't know if it's a good idea and it depends in what countries you apply it or not. What I do know is that this debate will only continue. And it will continue in as much as these tensions that we have outlined here remain. Because I think if anything technology provides is a leveling of where somebody in the poorest part of India can see how the best part of Indians are doing. And this is only going to provide tremendous tension and this is happening at tremendous speed. So the asymmetry of information that we used to have is closing. And in as much as that is closing and you see areas of society that have remained stagnant they will demand and they in a way technology has empowered them to be able to come out and demand for more things. The universal basic income is perhaps one of the answers that people point to, but there will be others. And this is a debate that will continue. And I think the only way to get into it is to get everybody in the room and start talking about it because I think that's the only option that we have. This is not an easy discussion. We are in a world where probably at the end we're going to work very differently. We're going to probably work less. And but regardless of that, this is something that will affect countries differently as we go forward. We have time for one more question. If anyone has one, if not, I'm going to ask the one question that I really want to ask you. Anybody? I thought I said something. Okay, so we didn't talk about that. It's very close to my heart, but just on gender and closing that gender gap. And we talked about your experiments in Peru and let me say I'm going to go to you with this one. But when you look at the risks facing the lack of ability to adapt to this changing nature of work, how much do you fear that women in particular are going to get left behind or how much do you look at women in particular can benefit from the change of work? Well, this is a very important question. In fact, with the World Economic Forum we did something in Chile and we're hoping to do the same in Argentina where we basically began to dwell into this issue. And many times is the need to bring not only the analytical work, but equally to bring the companies who are ready to do something about it. And it starts from not only the wage gaps that exist to women entrepreneurs. I think to me in Latin America the most exciting things are women entrepreneurs. And in terms of the labor force it really takes a commitment at the top to really make a difference in terms of helping get more women to rise up inside the organization. There is a number of analytical work that is done by Edge for instance, which looks at companies at how they're doing with gender. I'm proud to say that in our own institution we have over 3,000 people the wage differential is only about 3%. We still want to get close to 45% of women in the top jobs in the institution. It's hard to get them so you have to find ways to actually go and recruit women. And this is all a mindset that has to begin at the top of organizations, but equally in terms of what you do from the public policy perspective and how you bring companies along financial institutions and others to really help push this agenda. Hello, how much of this is an issue that has to be driven by corporations to actually, as he says, make the commitment to bringing women up, to really trying to close in particular that pay gap as well? Yeah. No, I think there is from a lot of cooperation this willingness, we see that also some countries like the Nordics have decided to some quota not only anymore at the supervisory board but they are now going into the executive. I would say I've been a lot in these countries before becoming CEO. I was in charge also of this region. And primarily I'm against the quota but you see that putting in place quota has changed. So this is also a way to push these trends. If you see that change, why are you against it? Yes, yes, I definitely can see can change but I have another point I would like to bring. I think the future of the workforce is more feminine than masculine. Why do I say that? I like the sound of that. Tell me more. Because I think that going forward, yes, we will have to, or the next generation will have to learn this hot core technical capabilities and mathematics and some. But what the world will need going forward is this intangible capabilities, empathy, inclusiveness, emotional intelligence. And these capabilities are, I must say, more feminine than masculine. So I think that the future... Myself not included but... Yeah. I think that the future will be, women have great future in this society. We must all become feminists. Every businessman has to become a feminist and think in those terms. And therefore that will begin to change the mindset first of all. Secondly, women need a seat at the table. My organization, we introduced a quota, transformed it. We now have quotas for women's representation in every single decision making body within our global union and it has worked. Quote in the world, in the business halls, it's not a feminist women's world at all and you cannot trust a bunch of senior executives to do the right thing when it comes to wages and to have fair and equal pay. So we need more women in the boardroom and more women in the line management. I'm glad to hear the ground is open and we are nowhere. And therefore we have to lift our game. Quotas, yes, feminists, yes. And also all of these new thriving businesses that say that they want a better world. Every single one of them has to commit from day one that men and women will be paid equally and that they also have to be cognizant of family responsibilities at the same time. We can make progress. We are making progress in the sensibility but the hard facts remain. There is discrimination au fond, Alan, when it comes to the wage issue. And when you're looking at wage inequality and unfair wage distribution, if we were to lift women's wages and to ensure that there was this equal pay for the job that's being done, we would begin to lift the wage share again. And that's something that the G20 should be doing. G20 committed to improving the participation of women in the workforce. G20, Angela Merkel, please stick to another target of lifting to bridging. I think Shadi is in the room. She's the world leader on this. It's still 22% wage gap, even more. It's higher than that. 22%. Well, Angela Merkel is certainly a woman who's working more or not less. And I want to say this has been an amazing session and fascinating to this session. Gentlemen, thank you so much for joining me. We are all feminists and we will continue to fight to close that gap. Thank you so much and thank you all for being here. Thank you.