 Hello to everyone, I'm very pleased to moderate this session focused on the labour market, and particularly on the phenomenon of good and bad jobs. And to discuss this subject, I'm very happy to welcome a great economist, Dharon Asimoglu, and a business leader with a very original background. And first, I would like to introduce Dharon country, your economics professor at the MIT. And to introduce, I would like to quote Jean Tirol, our Nobel Prize, he said, Dharon is one of the most influential, outstanding economists of his generation. And I think it's right if you consider the rankings of economics publication, the peak, you know, I think you are the number three, the third. And for the publication of the last 10 years, I think you are the number one. And then we are very proud to have your participation. And just a few words on your subject, your research cover many subjects, political economy and state building. And I would like to mention your book, Why the Nation Fades, which had a very impact, international impact. But and you explained in these books the origins of power and the origin of prosperity and poverty, a huge topic for the economist. But you are a specialist of this topic of today, the good and bad jobs. And very soon Jean Tirol, when we organize the session, suggests to talk about good and bad jobs, which is very important topics of the common goods. And he immediately offered to invite the expert of the subject, you Dharon. And to prepare this session, I have read several papers and one entitled, It's Good Jobs Stupid. And in this paper, you explained very well the shock of the American labor market in the last 30 years, the stagnation of wage and the decline of good jobs. Then Dharon, I have two creation for this subject. First, why don't we create many high wage jobs anymore? I think you have a lot of explanation, automatization, globalization, but I think you have other reason that you can detail. And second question, can anything be done to create more good jobs, Dharon? And then I think you have many specific proposals. And I invite you to detail them for us, excuse me, but you have only 10, 15 minutes, but we are very, very glad to have you in this session in this huge subject. Let's go, Dharon. It's up to you. Thank you, Thierry, and thank you for the invitation. And it's great to be here with Adrian. You know, the summit is about common good. You know, what we mean by common good is actually as important to think about. You know, if you look at dystopian pasts and presents, you see societies that are segregated into detached elites and masses of people who make no meaningful contribution to how the society is organized, governed, or functions. And the sort of the model society like this is like feudal Europe or the Chinese empire or the Ottoman empire. And that's what, for example, in my book, Why Nations Fail, James Robinson and I sort of developed these themes. And you know, these are what we call extractive societies that exist with one small group of people monopolizing all economic opportunities and assets and repressing the rest. But moving forward in the Western world, I think we could be recreating a different version of it if we go to a two-tiered society where only a small fraction of the population have meaningful opportunities and have high status. And the rest are not capable of making a similar economic and social contribution and don't have similar high status. And I think the crux of the matter is to create good jobs because I think good jobs for a large fraction of the population, for example, for people without a college postgraduate degree, without specialized skills, I think is the most important channel via which societies in the post-war era have been able to erase social hierarchy and create a common good around which people came around. And what I mean by good jobs is several things. First, high wage. Obviously, you cannot have good jobs that pay minimum wage like $7 an hour by federal minimum wage standards in the US that have some degree of stability. You cannot have good jobs that are zero contract hours as in the US or the UK where you don't know until 6 a.m. in that morning whether you're going to have a job or not or you'll have a gig economy job. And you cannot have good jobs if there isn't a meaningful career-building opportunity. And all of these actually emphasize that good jobs are more than just economic constructs. They are part of the social fabric of society. They are critical for making people feel that they are playing a useful social role in society. They're contributing to economic production. They're playing some role in society. And if you look at the US economy, and the same is true for the French economy, same is true for European economies, in the three and a half decades that followed World War II up to the oil price shocks of the early 1970s, we had plentiful good jobs. This is the period in which workers without college, and in fact in some cases workers without a high school degree could get very well-paying, secure jobs in which they had a very clear ladder of promotions, for example, in union jobs, but not only in union jobs. These was the period in which growth was very rapid, but went hand in hand with real wages for workers with very different backgrounds increasing steadily. So in the US, for example, again, most of Europe is not very different. The real wages of high school graduate workers grew at about 2.5% a year in real terms, which is exactly the same rate at which the real wages of college workers grew. And many of these jobs were quite meaningful, people took pride in them. Some of them, today we look down upon, some of them were mining jobs which were very unhealthy, it really had a bad impact on people's health. Today we would want to regulate them very differently, but in many cases, whether they were in mining, they were in offices, back offices, retail, or most often on factory floors, people gained social meaning from their participation in these jobs. And look at it today, and you see a very different picture. There are essentially very, very few good jobs left for workers without college degrees. It's very different for people with an MBA from institutions like Insead, Landon Business School, or Harvard Business School, or workers who have engineering or computer science degrees. People fortunate like us, we can still get very meaningful jobs, we feel, we are contributing to society, we gain a lot of social status, but it's very different for workers without college degrees and increasingly actually workers without postgraduate degrees. One aspect of that you see in the US labor market is that real wages for these groups completely stopped growing. In fact, real wages for men who have college degrees but no postgraduate degrees hardly increased over the last 30 years, and real wages for workers with high school diplomas or less than high school diploma fell by 15 or 20 percent in real terms. So this is one aspect of these good jobs disappearing, but another aspect is even more telling and it's actually very common between the US and European countries such as France, for example. If you look at the middle class jobs that I singled out earlier on, factory jobs, assembly jobs, back office retail, clerical function, these made up the middle class for most Western societies. They are the jobs in which people moved up socially, they had very comfortable lives, and they were in the middle of the earnings distribution, income distribution, and all of these jobs have been disappearing. The same is true in the UK and true in the US, it's true in France. In France, of course, you don't see the big declines in real wages that I mentioned for the US for a very simple reason because France has much better protection at the bottom, minimum wages, better worker bargaining or coverage by unions and other social protection. But in France this has led to more people losing their jobs because these sort of middle class lifeline jobs themselves have been disappearing. So the situation in France is better in some ways than in the US, but not that much better and the problems are affecting it. So the question is, as you said, Pierre, why is this happening and what can do about it? So let's start with why this is happening. Well, one view, which you will hear a lot from, say, entrepreneurs and leaders of technology in Silicon Valley, this is the inevitable path of technology. We're moving towards better technologies based on robotics, software, increasingly AI, and it's only good and fine that routine jobs should be automated and it's all good. And in fact, we're going towards a more meritocratic society. Well, I think I disagree with that perspective and I disagree with that in two ways. First of all, it undersells the importance of social and institutional changes that we have made, which underpin this transformation. And secondly, and even more importantly, it completely trivializes and ignores the technological choices we have made that have underpinned this economy. First, on the social and institutional ones, I think there has been a broad transformation in the business world. And again, it's most clearly seen in the Anglo-Saxon economy, such as the UK and the US, but I think it's common in Western Europe as well. So in the fifties and sixties simplifying, most businesses would see labor as one of their main human resources. If you wanted to be successful, you needed to make your labor more productive. And labor was part of your stakeholders. If you made more profits, you would share it with labor. And for a variety of reasons, part of it globalization, but even more importantly, the ideological shifts that were associated with with the very extreme version of shareholder values, Margaret Thatcher, Ronald Reagan, sort of a very different mindset emerged. So here, companies want to be run just for the benefits of their shareholders. But in fact, it's actually managers and shareholders. And labor becomes a cost, not a resource. So if that's the case, what you want to do is maximize what your shareholders can get. And one good way of doing that is reduce wages. So you see in the data, for example, in the 1980s and the 1990s, companies start making more money, but they don't pay more to their workers. Because, you know, why should you share those rents with their work with your workers? In fact, the opposite, companies and managers become very handsomely compensated precisely when they are cutting wages and employment because they are reducing their labor costs. And this went hand in hand with a very different trajectory for technology. If you look at the data, and I have done quite a bit of this with in my joint work with Pasquale Restrepo, for example, you see a lot of technological change, of course, in Europe and in the US, in the late 1940s, 50s, 60s, early 70s. But this technological change, though it has a lot of automation in it, some jobs, machine tools, then other functions in the back offices are starting being automated as back as early as the 1950s. It is also going hand in hand with other technologies that are increasing worker productivity, creating new tasks, new opportunities, new occupations for workers. And it is this dance between automation and new technological changes helping humans that's keeping the sort of the opportunities for workers of all demographic backgrounds alive. It is the one that's ensuring real wage growth for these types of workers. And then from the 1980s onwards, you see a sea change. There is much less of the technological changes that are helpful for humans, but there's much more automation. Again, robots, AI, software are the tip of the iceberg here. Why is this happening? Well, once you start thinking of labor as a cost to be eliminated, then automation starts making a lot of sense. If you want to compete against China, what do you do? Well, you have to reduce your cost to be more competitive, get rid of your workers. But also, many other things have been pushing us in that direction. First, the technological leadership of the world, of the Western world, and especially of the US has passed to the hands of a handful of companies such as Google, Facebook, Netflix, Amazon, whose business model is completely based on automation and getting rid of humans. Google today is bigger in terms of its contribution to GDP than GM was, but GM in its heyday employed close to a million workers, Google today employs 80,000 workers. It is it is based on doing things algorithmically, not with humans. But that is completely fine that we need companies of all types of approaches and all types of priorities. The problem sets in when Google's model of business and Google's model of technology becomes the US and then the world's model of technology and business. And that's exactly what has happened. And government policy has helped. You know, if you look at the US government and European government, they used to play much more of a leadership role in what the direction of technological change should go. And that was a balancing act between labor and capital. Much less of that is done today. Worse, because of again, shareholder values, international competition tax evens, capital's bargaining power relative to labor has increased. And one of the very important implications of that has been that today we tax capital very, very, very little compared to labor. That's the international trend again, it's very visible in the US where I have written a paper documenting this, you know, capital was always favorably treated relative to labor even back in the 1980s. But today, if you look at especially the types of capital that are involved in automation, equipment and software, at the margin, they pay 5% or less tax. Whereas if you hire labor as an employer and as an employee, you have to pay jointly more than 25%, sometimes 35% tax through federal taxes, health insurance and payroll tax contributions. That means that companies have an enormous fiscal incentive to automate because they can reduce tax burden if you they put in machines instead of workers. So all of these things have created an artificial and inefficient, excessive automation. But the cost of this has been especially in terms of good jobs, which again, as I said at the beginning goes beyond just inequalities, it really corrodes the social fabric of how we can actually view ourselves as a society organized around the common good. So if this is the right diagnosis, then the responses to it are pretty straightforward. We have to really tackle with each one of the root causes that I have identified the tax structure can be changed. It's not that easy. The capital has a lot of bargaining power. As long as tax havens exist, it's going to be very difficult to increase the taxes on capital, but international cooperation can cooperation can get us there. For example, Biden's plan, though quite modest in terms of a minimum global corporate tax is one step in that direction. Government leadership in innovation has to play an important role. And then the last two things, we have to go back in the institutional dimensions and the social dimensions that I mentioned. So start understanding that labor is a critical asset not supposed to be eliminated and go towards a more shared vision in which different voices, different companies, different perspectives are going to play a role in how we structure the economy and how we decide the future of the direction of technological change. We can get into some of the more detailed how to do that. But let me stop it here and I pass it to Adrienne and you theory. Thank you. Thank you very much, Darwin. Just a question. You know, and in your papers, you said that it's necessary to to make the American labor market in a way more European, you know, you speak a lot of minimum wage. You said that it's a mistake to not to have a minimum wage. You know, in France, there is a strong debate between economists. A lot of economists said the minimum wage, it's too high and it's a problem for the to create jobs. What do you think about? Do you think that we, the American has to copy in a way European to have labor market institution more strong? Well, yes, I think it is important to provide more protection to workers in the formal minimum wage and other types of social protection for voice and some degree of bargaining power for workers. But I do not claim that that's an sufficient step. That is part of a bundle. And that's why I've tried to emphasize that the problems I'm emphasizing here are common between France and the US and Europe and the North America. We really need a bigger overhaul of what businesses do, how they view technology, how they view labor, how they share profits, how they are taxed and just jacking up the minimum wage would not be a solution to these problems. In the US, the minimum wage is so low right now, the federal minimum wage is so low that, you know, just increasing the minimum wage would create some benefits. But it's not going to be a solution to creating good jobs. You're not going to create good jobs just because the minimum wage increases. The minimum wage will be useful because it will eliminate some of the worst jobs that can survive only because they pay extremely low pay. You know, McDonald's has jobs that would not, they would try to make their workers much more productive if they had to pay those workers $13, $14 an hour. But it's a small part of the problem. So that's why I didn't emphasize it today. But yes, I do believe that strengthening US labor market institutions as they used to be in the 50s and the 60s. So it's not just the European thing. It's also what the US used to have itself is one of the steps that we need to consider. Okay, thank you very much. Let's me now to introduce Adrienne Couré, the business leader. Adrienne is a general manager of IMA Group, which is one of the biggest French insurance group with 8 million clients and 14,000 employees. And Adrienne, a graduate of Ashucé, a French and famous business school, is lead a very, in a way, special company because it's a mutual company controlled by policy order. And it's very, very important to say that because you don't have the returns of capital requirements of traditional companies. And, you know, Darren, in his paper, remind us that the trends of maximization of shareholder returns as consequences. And one of them is, you know, in a way, the sacrifice of good jobs. Then to complete the analysis of Darren Sémoglou, Adrienne, I would like to ask you to react, sorry, to the strong movements of stagnation of wage and the decline of good jobs. And are you experiencing the same situation in your company? And what kind of measure are you taking to address this general labor market situation? And last question, what do you think about all the company's commitment to improve working condition of employees, you know, this social accountability? Is it really a commitment? Is it really the reality? Let's go for 10 minutes, please. Adrienne. Thank you very much. And first of all, I would like to thank Darren for his very inspiring reflections on the subject. And I'm very happy to give my point of view, my corporate point of view on that. First of all, all the trends which have been described from a practical ground are a reality today. The trends to precariousness and the qualifications of jobs exist. It's a reality that is encoded for maybe 20, 30 years in our advanced economies. And we had experience during the COVID crisis. The raw truth of that with the frontline workers, those working for the economy of care, for fundamental utilities, being the most useful from a social point of view. But at the same time, maybe the one that has been the less treated from wages or the thing point of view for for many years. There are many causes of that. And Darren stated many things that are fundamental. From my point of view, there is maybe another approach that led to that, which is a global crisis of leadership in our economies. From two point of view, corporate crisis of leadership. If you remember the point of view of the fordism on capitalism, in a way, it was a way with a uteritarian point of view to put together the interests of the capital and the interests of the worker, pay the people well and it would make good consumers. It was very simple, but it was efficient and it made decades and decades of reconciliation between capital and workers. Today, what's the point of view of Mars or Jeb Bezos about what the society could be? Is it going on the moon? Is it transhumanism? What's the point of view on what society should be and how people could live together through the way they work, the way they consume, the way they have a social implication? I think we have a crisis of that. And as regards France, from a political leadership point of view, we have for decades, let aside the view of the political unity, Darren stated the social fabric with the idea that it was normal in a society that huge conflicts of interest could exist between classes of people. So this crisis of leadership is major, I think, and it's it's a huge trend we are encountering. If I go back to my simple perspective of French insurance markets, we observe, I would say, a temptation of precariousness and the qualification of jobs with two main causes. The first is the temptation of low-cost insurance. It's it has existed for decades, but it's the consequence of a lower family budget, because you know, things come to things and they generate each other. The second cause is digitalization, of course, in its most negative approach of replacing jobs. But these two trends, low-cost insurance and digitalization with replacement automation of claims processing, premiums collection, etc. In France, it's still marginal, and it's quite interesting to observe why. To me, two reasons for that, for this kind of resistance. And we are talking about a business insurance that is not prone to global competition. It's domestic competition. The first thing is that we're talking about the business that is based on trust. You don't like to pay your insurance premiums, but you know it's important because the day you lose your mobility, you're breaking your leg, maybe someone in your family dies. It's good to know that the insurance would be there. And these promises, these trust based on a human feeling, not on automatized and digitalized lines of process. It's a very important thing, an economy based on the human. And the second thing is the market structure. The low-cost insurance didn't make it through in France because there are stronger insurance, providing quality insurance. And of course, I am at my root because it's a mutual insurance company as this characteristic. What I have to say now is that I think, because it's also a matter of leadership, that's the bad job phenomenon, of course, stems from global trends that Darren describes. But I think that from an individual, the corporate responsibly perspective, it's not a fatality. It depends mostly on companies and on corporate choices you have to make. Good companies can make better jobs. It's something obvious, it's something very simple, but it's something we have to be reminded of, maybe not only to rely on the, I would say, the obvious truth and the false truth that the markets, the free market can provide. And I would like to share with you my experience of AIMA Group. And you said Thierry, it's one of the top French insurance group. It's a mutual insurance group meaning we are not owned nor governed by shareholders with short-term interests, financial profits in mind. But by our policyholders, you said that. And it's very important for us and for me, because when I present projects, evolutions, tariffs, and social policies to the board of directors, the people, they do not tell us how much does it bring. They tell us what does it bring to the policyholders from a global perspective and in the business where the human value of relationship, trust is absolutely fundamental. Excuse me, Adrien, we have only for five minutes, if you can conclude. Yes, in a way, everything we've said depends on global trends, but also from the crisis of corporate responsibility. Corporate leaders who delegated their own responsibility to markets to shareholders. We have a social responsibility. We have a possibility to create our own position through quality jobs, quality service. That's what we do today through training, through promoting long-term careers in companies. I know it's not the hype, but people who are faithful, who stay a long time in company because you trust them, you trust them. It makes a good service. It helps having them develop their family on the French soil. We do not off shoulders, for instance. And at the end of the day, it makes us one of the company, the insurance company in France with the lowest shunt rate, meaning we earn money. We have good jobs with wages that are above the average in France. We have policy holders happy with what they provide. And it's a virtual secret because there is no one at the top of the company saying you have to put employees and customers and shareholders in conflict of interest. We have to find the way to reconcile interest between all the people, all the stakeholders of the company. And it's feasible for companies like us. Thank you, Adrien. We have only a few minutes. Darren, I would like to ask you a question. In one of your papers, you said the government must refocus on building a better social safety net, providing worker protection, investing in skills and implementing robust regulation to prevent monopolies. I asked you the question, do you think that Joe Biden's new policy can really transform the U.S. job market? I think it's too soon to say. You know, I think Biden's agenda right now is focusing with the post-COVID recovery vaccination and a number of other things related to that. But it is showing great signs of thinking outside the box. Again, I single out the corporate minimum tax as the most important policy idea that's been floated and also their commitment to a minimum wage is a good one, whether it will pass at some point from the legislature is the question. But I think what's missing in Biden's agenda right now, and I think pretty much everywhere, is a focus on redirecting technological change. So it's not possible to create a good job economy and recreate a version of the social compact based on, as Adrienne said, on trust, responsibility, sort of people coming around the common good as a community. If we go further and further down the path of automating pretty much everything that, you know, workers without a college degree or without specialized skills are doing so that they get pushed more and more into more precarious marginal jobs or jobs that are just too cheap or too uninteresting for machines to do such as, you know, to search various types of food preparation and cleaning type of services or home care, although those will also at some point be automated in the future as well. So I think we have to find a way of creating plenty full of interesting, meaningful, high wage paying jobs for humans. And that is only possible if we stop and rethink about what we want from technology. What are the directions of future technology that we want? We have to first realize this is a problem. Society needs to come around it, but you also need to recognize that there is nothing inevitable about the path of technology that we have chosen. For example, you will hear from many technology leaders that all they are doing is pursuing AI where it needs to go. Well, that is not true. There isn't one path of AI. If you look at the original luminaries of AI, none of them actually thought of AI as, you know, a huge amount of data crunch via machine learning so that you can find ways of doing very narrow tasks in a very standardized way. Many of the luminaries of AI thought of artificial intelligence, machine intelligence as something complementary to humans as something that augmented humans. Where did that vision go? Well, that vision went because that's not the vision that was the one that on which some scientists made progress, but most importantly, that wasn't the vision on which some companies had their business model built around. So I think we have to find ways of bringing these different visions so that we have a chance of creating a human community where many, many of its members have an ability to contribute to the human good. Of course, that doesn't mean that we should recreate coal mining jobs and routine jobs that are boring in factories. But, you know, look again, the routine jobs of the factories were high paying and they were very interesting relative to the agricultural jobs that were backbreaking in the at the end of the 19th century. So what we need to do is find the next layer, next types of new jobs, which are going to be the bulwark of the middle class. And that's technological as well as a social and institutional problem. Okay. Thank you very much. Whoever who have to finish, it was very interesting. Thank you, Daron and Adrien, to participate in this very interesting session. And see you soon. I hope, Daron, in Paris, perhaps, or perhaps in Boston. Thanks a lot. Thank you very much. Thank you very much. It was great to be part of the same conversation. Thank you, Daron.