ETF dockers advise Government of Geneva on supermarket robot tax

20 Mar 2018

Switzerland might be hundreds of kilometres from the sea, but that didn’t stop the Grand Council of Geneva asking for advice from the ETF Dockers’ Section. The government of the wealthy Swiss canton is currently debating plans to tax automatic checkouts in supermarkets. To get some expertise from another sector, the Economy Committee of the Genevan parliament invited Livia Spera, ETF Political Secretary for Dockers and Fisheries, to speak about port automation and its consequences.

Geneva’s proposed new law would tax automatic checkouts in an attempt to preserve jobs. A foundation managed by the social partners would work on the redistribution of the taxes collected: part would go to a training fund for displaced workers, and part to those supermarkets that have no automated checkouts.

The ETF was invited to present its vision and activities on the future of port work in an era of accelerating automation. And we were delighted to attend! Indeed, although the Dockers’ Section focuses on the impact of automation on port workers, this is an issue affecting many sectors of the economy. Therefore we try to work with stakeholders and institutions in other relevant areas.

Ms Spera explained to the Committee that “the ETF’s approach to the future of port work is very pragmatic, and we always look for concrete, practical solutions. So we applaud Geneva for seriously discussing this ‘robot tax’ proposal. The idea is not new, but this is one of the very first attempts in Europe to put into practice the idea of taxing technology.”

However, she stressed that “we are not trying to block technological progress. We just think that the policy focus should be to keep as many jobs as possible, for as long as possible. It cannot be denied that new technologies are going to impact the port sector – just like the retail sector. So policies need to make sure that the transition is fair for workers. This means, for instance, establishing funds to offer an income for workers that lose their jobs and to ensure retraining when possible.”

Ms Spera’s presentation was welcomed by the listening lawmakers. MP Roger Deneys commented: “The proposal I tabled with other colleagues aims to keep people who would not easily find another job in work. We are focusing now on retail, but this is an issue in all sectors. We’re very interested in the work that the ETF Dockers are doing to trigger political action on the topic.”

At the moment it seems that the benefits of automation accrue mainly to company owners and shareholders. Cost savings are not necessarily passed on to the end consumer in the form of lower prices.  Indeed, in retail, automatic checkouts make customers do some of the shop work themselves for free!

Society also needs to consider the broader impact of automation on government finances. Here again, some form of robot taxation could have a role to play in managing the impact of automation. States still draw most of their budgets from personal income taxes. If the number of people at work shrinks, we must either compensate those revenues with higher corporate taxes or tax the technologies that are replacing labour.

Yet not all the sectors facing large-scale automation are the same. In some ways, ports and terminals are quite different from retail because of their geographic concentration.  Port work is focused in relatively small areas, but in those areas the port often provides a sizeable percentage of employment. Losing port jobs can have a double impact on port regions, as they see not just a drop in income tax receipts, but also a decrease in consumption. What is more, port upgrades require major adaptations to infrastructure, for instance to handle megaships. This often needs public investment, but who is going to pay for it if automation undermines government finances?

The current wave of automation is a once-a-century social, economic and political challenge. Dialogue between all parties involved is vital. Those who are pushing automation should contribute to a fair transition. Politicians must be inventive and act fast, just like those in Geneva. Technological development is unstoppable, but a fair transition won’t happen unless the issues is tackled politically.

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