NCCI's Industry Roundtable: John Howard, MD
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By NCCI Insights November 27, 2018

NCCI’s Industry Roundtable: NCCI President and CEO Bill Donnell engages workers compensation leaders on the critical issues and trends impacting the industry today and in the future. In this installment, Donnell speaks with Dr. John Howard, director of the National Institute for Occupational Safety and Health (NIOSH), on the impact of technology and automation on the workforce of the future.

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Dr. John Howard is director of the National Institute for Occupational Safety and Health (NIOSH). He first served as NIOSH director from 2002 through 2008, and again from 2009 to the present. Prior to his appointment as NIOSH director, Dr. Howard served as chief of the Division of Occupational Safety and Health in the state of California’s Labor and Workforce Development Agency. He is board-certified in internal medicine and occupational medicine.

The Future of the Workforce

Bill: There’s been a great deal of conversation about the future of the workforce and how technology will shape several industries. Automation is changing what jobs could look like in just a few short years and beyond. Dr. Howard, take us into the future for a moment. What does the workforce look like compared with the one we know today?

Dr. Howard: The drivers of change for the 21st century workforce are technological—reshaping the skills needed for work—emphasizing cognitive abilities over physical abilities. Technology has long influenced the way we work. During the first Industrial Revolution, we saw water and steam power used to mechanize production in mills. In the second Industrial Revolution, electric power enabled the mass production of goods in factories. In the third Industrial Revolution, electronics and information technology began to automate production across all industries—especially manufacturing. As we enter the fourth Industrial Revolution, we are beginning to use systems composed of physical entities controlled by digital algorithms, artificial intelligence, and machine learning—monitored by sophisticated sensors and data analytics.

In addition to technology changing how we work, the “standard employment arrangement,” where one employer has direct control over a worker, is changing as well. Over the past 20 years we have seen an increase in co-employment arrangements, where two employers—a temporary help services agency and a client employer—share responsibility for the worker. There is also an increase in the “independent contract work arrangement,” where the organization lacks direct control over the worker—and a business, rather than an employment relationship, exists. There is legal and social controversy about whether these new “gig” workers are contractors or employees of a digital platform company. Even the US Bureau of Labor Statistics (BLS) has trouble counting the number of workers doing “electronically mediated work.”

The face of the workforce is also changing and is projected to become even more diverse in the 21st century. Higher labor force participation rates among minority populations such as Hispanics, Asians, and African-Americans have led to an expanded minority share of the American workforce. By 2050, there will be no single racial or ethnic majority in the United States. In addition, up to five generations are now working alongside each other in the workplace—traditionalists, baby boomers, Gen X, Gen Y (“millennials”), and Gen Z—with each generation having different attitudes, communication styles, and management perspectives around work.

The US workforce is also becoming less male-dominated compared to the past. As BLS economists Mitra Toossi and Teresa L. Morisi noted in 2017, “a major factor that contributed to the growth of the US labor force in the second half of the 20th century was the remarkable increase in the labor force participation rate of women.”

By 2015 the number of women in the labor force had increased to 73.5 million, comprising 46.8% of the overall labor force. According to BLS projections, the number of women in the labor force will increase to 77.2 million in 2024 for a 47.2% share of the total workforce. From this growth of the female workforce, we have seen a greater emphasis on gender-specific issues such as adverse health effects of work on women, equal pay, prevention of gender-specific discrimination, and maternal and child leave policies. Gender diversity has become a business asset. According to the Gallup organization, gender-diverse business units in the retail and hospitality industries have 14% higher revenue compared with less-diverse business units.

Job Transformation

Bill: I discussed how the workforce is changing in my Annual Issues Symposium 2018 speech. I shared that while there is fear of job elimination due to automation and other technological advancements, a perspective to consider is transformation, rather than elimination. What are your thoughts on this viewpoint?

Dr. Howard: I think the term transformation more closely captures the transition we are currently experiencing. Indeed, fear of unemployment from technology always accompanies changes in kinds of work, how that work is done, and what work arrangements are used. That viewpoint is not new. In 1867, Karl Marx worried that “machinery does not just act as a superior competitor to the worker, always on the point of making him superfluous.” Again in 1933, the famous economist John Maynard Keynes warned of widespread unemployment, “due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.”

During any of the historical phases of workforce transformations, it is true that in the very short-term, job destruction often outpaces job creation. We will not know for many years whether the industrial transformation we are currently experiencing will lead to permanent job loss. In the short-term, we need to provide opportunities for workers who are subject to dislocation from automation so that they can “reskill” and “upskill” sufficiently to compete in a transformed workforce. In the longer term, we need to emphasize job training.

Impact of Automation

Bill: Which jobs or employment sectors will be impacted the most by automation?

Dr. Howard: The short answer is, if your job is “codifiable,” you can be impacted by automation. What that means is that if your job can be replaced by a machine run by an algorithm, which does not require expensive employee benefits or coffee breaks and no vacations, the likelihood is that an employer will see a cost advantage in replacing the human worker with a machine. In a 2013 paper, University of Oxford researchers Carl Frey and Michael Osborne estimated that about 47% of total US employment is at risk of “computerization,” largely because of the economic advantages.

In manufacturing, job density—the number of jobs per process—is declining. The reasons are automation, robotics, and advanced manufacturing techniques. In 2017 MIT economists Daron Acemoglu and Pascual Restreppo published a paper that attempted to quantify the direct negative effect of greater use of robots. They found that for every robot per thousand workers, up to six workers lost their jobs, and wages dropped by as much as three-fourths of a percent from 1990 to 2007.

We can expect that the “job intensity” of America’s manufacturing industries—and especially its best-paying ones—is only going to continue to decline. In 1980, it took 25 jobs to generate $1 million in manufacturing output in the United States. Today it takes five jobs. In mining, large vehicular service robots that transport ore from the mine face to other areas of the mine do not experience fatigue, do not have driver changeovers, and can be operated remotely. The workforce at such mines is already about one-third lower as a result of automation.

In financial and sports reporting, machines can now gather information, answering the who, what, when, why, and how. And the hurdle that machines have to cross to outperform humans for this reporting is not that high! You can also automate online marketing, and financial companies are using algorithms to better diversify and manage customers’ portfolios.

Even if a machine cannot be a substitute for your job, machines will be a complement to your job. For instance, a machine may automate delivery of anesthesia during surgery—achieving more precise concentrations. Physicians can better diagnose a patient’s condition by using a Watson-like computer to augment their decision making, rather than relying solely on their own experience. Lawyers can better predict the outcome of arguments most likely to prevail in a courtroom by using algorithms.

Right now, we can only see the makeup of the 21st century workforce dimly, but currently there is nothing to indicate that the jobs in all industry sectors will not undergo some type of transformation as we advance through the next few decades. In its 2018 “Future of Jobs Report,” the World Economic Forum wrote, “workers will need to have the appropriate skills enabling them to thrive in the workplace of the future and the ability to continue to retrain throughout their lives.” Technological-driven change is the reality of the fourth Industrial Revolution.

Impact on Safety

Bill: Our most recent Quarterly Economics Briefing notes how changes in the workforce can affect trends in workers compensation outcomes, such as frequency and severity of injury claims. Automation is sure to bring change, but workplace safety will remain a top priority for employers and the workers compensation industry at large. What might be the impact of automation on workplace safety?

Dr. Howard: Among the most influential drivers over the next decade will be trends in robotization. Robot workers exhibit superior performance in many different areas. They excel at mundane, repetitive, and precision jobs. With perfect memories, Internet connectivity, and high-powered processors for data analysis, robots can also provide informational support beyond any human capability. They can keep perfect records of project progress, provide real-time scheduling, and decision support, and always have perfect recall.

The greater use of robots, including unmanned aerial vehicles, or drones, may be both positive and worrisome. Use of machine, robot, or drone, instead of a human worker to perform a hazardous activity, can reduce injuries and illnesses. On the other hand, the close proximity of robot and human workers may pose a hazard that will need risk mitigation measures.

The industrial robots of the 1970s were in fixed locations and separated from human workers in large measure. Newer collaborative robots, or cobots, are designed to work alongside human workers, controlled by human workers, by an algorithm, or by both. They are equipped with sensors intended to stop the cobot when contact with a human worker occurs. However, such safety features may not always work as intended. The safety record of workplace robots has been good to date, but we need to pay attention to developing standard methods to identify robot-related injuries, e.g., through specific injury codes used by BLS and workers compensation insurers. It is difficult now to differentiate between robot-related injuries and injuries associated with nonrobotic, automated, or manual machines.

New types of robots will require new protection strategies. Robots with dynamic machine-learning capabilities challenge static safety procedures. Rapid advances in robotic technology may outpace our ability to provide evidence-based guidance or standards. These safety challenges will occur at the same time employers are trying to manage the stress associated with changing workplace practices and human worker displacement.

A good place to start in terms of managing robotic safety is ANSI/RIA R15.06-2012—the American National Standard for Industrial Robots and Robot Systems-Safety Requirements, which was approved in 2013. Through the experience of the Robotics Industry Association (RIA), the ANSI standard provides guidelines for the manufacture and integration of industrial robots and robot systems with an emphasis on their safe use, the importance of risk assessment, and establishing personnel safety. A key feature in the standard is “collaborative operation” or introducing a worker to the loop of active interaction during automatic robot operation. Although this feature is developmental and in need of refinement, it is a good start.

The Future of Workers Compensation

Bill: With so much transformation on the horizon for our industry, how should WC companies start thinking differently about how they deliver value to employers and employees?

Dr. Howard: I think there are three things workers compensation companies, state regulators, and organizations like NCCI, can do to prepare for the changes that will occur.

First, I think workers compensation insurers, regulators, and organizations can work to increase the knowledge base within the industry about new technologies that are on the horizon and the risks such technologies pose to workers.

I invite all workers compensation companies to connect with the NIOSH Center for Occupational Robotics Research (www.cdc.gov/niosh/topics/robotics/aboutthecenter.html) and the NIOSH Center for Workers Compensation Studies (www.cdc.gov/niosh/topics/workercomp/cwcs/) to help prioritize the worker safety research that is needed to ensure the safe application of new technologies. One potential area of collaboration with these centers is working with workers compensation insurers and organizations to better identify injuries and illnesses associated with robotics and other emerging technologies. Additionally, NIOSH is interested in exploring, with interested stakeholders, how best to capture narratives in the claims records and how the Workers Compensation Insurance Organizations’ (WCIO) code system can be integrated with the BLS Occupational Injury and Illness Classification System (OIICS), which could be used, in part, to identify robot-related claims.

Second, workers in new “gig” work arrangements still need protection from work-related injuries even if they lack an employer under whose workers compensation policy they can seek medical care and wage replacement. Insurers and organizations should examine the pilot programs for portable workers compensation benefits that are sprouting up around the United States to see how effective they are. Perhaps the industry can develop a model standard that will provide more flexible, portable benefits that workers can carry with them to multiple jobs across a day, a year, or even a career. For example, the new International Organization for Standardization (ISO) 45001 (occupational safety and health management systems) standard expands the definition of worker to cover contractors, in addition to standard work arrangement employees.

Third, workers compensation insurers and organizations should develop ways to identify injuries and illnesses associated with alternative work and develop guidance for their insureds about how to manage a blended workforce of standard employment arrangement and alternative work arrangements, such as temporary, contract, and gig arrangements. A blended workforce can present challenges for safety management. For example, together with OSHA and NIOSH, workers compensation insurers have an important role to play in developing recommendations aimed at how agency and client employers can better understand their mutual responsibilities to safeguard temporary agency workers at hazardous workplaces.

Lastly, we need better surveillance for alternative work claims such as temporary workers. For example, Washington state’s workers compensation agency has developed special sets of class codes for temporary staffing agencies to use to address the higher risk of injury in the temporary workforce.

Bill: Dr. Howard, we appreciate your time. Thank you for providing your views on this very important topic.

Dr. Howard: You’re very welcome, Bill. I applaud NCCI for engaging with the industry on topics such as this.

References

Acemoglu D. and Restreppo P., “Robots and Jobs: Evidence from U.S. Labor Markets,” National Bureau of Economic Research, March 2017. Available at www.nber.org/papers/w23285.pdf.

Frey C.B. and Osborne M.A., “The Future of Employment: How Susceptible Are Jobs to Computerisation,” Technological Forecasting and Social Change, 2013; 114:254–280. Available at www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf.

Howard J., “Nonstandard work arrangements and worker health,” American Journal of Industrial Medicine, 2017; 60:1-10.

Howard J., et al., “Unmanned Aerial Vehicles and Construction Worker Safety,” American Journal of Industrial Medicine, 2018; 61:3–10.

Schulte P.A., Grosch J., Scholl J.C., et al., “Framework for Considering Productive Aging and Work,” Journal of Occupational and Environmental Medicine, 2018; 60:440.

Toossi M. and Morisi T.L., “Women in The Workforce Before, During, and After the Great Recession,” US Bureau of Labor Statistics, Spotlight on Statistics, July 2017. Available at www.bls.gov/spotlight/2017/women-in-the-workforce-before-during-and-after-the-great-recession/pdf/women-in-the-workforce-before-during-and-after-the-great-recession.pdf.

World Economic Forum, “The Future of Jobs Report, 2018,” Geneva, Switzerland, Centre for the New Economy and Society. Available at www.weforum.org/reports/the-future-of-jobs-report-2018.

​This article is provided solely as a reference tool to be used for informational purposes only. The information in this article shall not be construed or interpreted as providing legal or any other advice. Use of this article for any purpose other than as set forth herein is strictly prohibited.

 






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