AI, Class Struggle & the Need for ESG-Led Innovation
Why the new underclass of society needs more than just jobs.
Joanne Tay
5/15/20264 min read
Are we prepared for AI-driven mass job disruptions and its consequences? (Photo: Unsplash)
In his academic paper, “The Precariat and Class Struggle”, economist and labour sociologist Guy Standing describes a fundamental shift in global class structures. The old proletariat – the stable, unionised, factory-based working class that shaped 20th‑century politics – is shrinking. In its place, a new class of society is emerging: the precariat.
Characterised by chronic uncertainty, insecure labour, and a lack of access to key assets (security, time, space, knowledge, financial capital), the precariat is now a global phenomenon. As artificial intelligence accelerates labour market disruption, Standing’s analysis becomes more urgent than ever.
For ESG policymakers, investors, and corporate leaders, the question is no longer whether AI will reshape work – but whether social governance frameworks can prevent the precariat from becoming a permanent underclass.
Key Findings from Standing’s Analysis
1. A new class structure has emerged
Standing identifies seven groups with the precariat sitting below a shrinking proletariat, a salariat (secure, high‑income employees), proficians (contractors and consultants), an elite, and a tiny plutocracy. Below all is a “lumpen‑precariat” – effectively expelled from society.
2. The precariat is a class‑in‑the‑making
Unlike an underclass, the precariat has agency. It is not defined solely by low income, but by distinctive relations of production: casualised, informalised, part‑time, agency‑based, and crowd‑labour. Its members experience a high ratio of “work‑for‑labour” (unpaid or underpaid preparatory activity) to actual paid labour.
3. Precariousness is not just a social condition, it is a class position
Standing argues that global capital actively wants a large precariat. Whereas 20th‑century capital sought to habituate workers to stable labour, today’s global capital habituates the precariat to unstable labour and unstable living.
4. The precariat rejects old political traditions
Neo‑liberalism is anathema. Social democracy and labourism are seen as irrelevant – built for the old proletariat, not for those who face chronic uncertainty. This fuels the perception of a “crisis of democracy” as the precariat does not see itself represented.
5. To become transformative, the precariat must move beyond primitive rebellion
Mass protests (2011, Gezi Park, Brazil, etc.) were “like fireworks” – spectacular but fleeting. The precariat must evolve into a class‑for‑itself with a positive agenda. That agenda should not be “revolutionary” (tainted by 20th‑century history) or merely “reformist”. It must be transformative.
6. The struggle is not for higher wages alone
Standing argues that wages will continue to decline as a share of national income. The precariat cannot expect real wages to rise. Instead, the struggle must focus on redistributing six key assets:
Socio‑economic security (protection against chronic uncertainty)
Control of time (freedom from stand‑by labour and fragmented schedules)
Quality space (reviving the commons – physical, social, and cultural)
Knowledge (genuine education, not commodified “human capital” training)
Financial knowledge (access to transparent financial services)
Financial capital (through basic income and democratic sovereign wealth funds)
7. Cross‑class alliances are possible
Growing fear of falling into the precariat – or seeing one’s children do so – creates common ground with lower echelons of the salariat and even some proficians.
The AI Disruption: Why Standing’s Analysis Is More Relevant Than Ever
Artificial intelligence is not just another wave of automation. It is a fundamental shift in how value is created and distributed.
AI displaces not only routine manual labour, but also cognitive and professional work from legal research to medical diagnosis to financial analysis.
Platform capitalism and crowdwork are expanding the precariat into new sectors, including knowledge services.
The work‑for‑labour ratio (unpaid time spent bidding for gigs, training algorithms, managing online profiles) is exploding.
Standing’s precariat is rapidly becoming the AI‑precariat: a class whose people train the very systems that render their own skills obsolete, without security, benefits, or a voice in how AI is governed.
How ESG Policymaking Can Help Circumvent the Effects
The Social (S) and Governance (G) dimensions of ESG offer practical levers to prevent AI from entrenching precarity. I suggest six actionable pathways, aligned with Standing’s asset‑based framework.
1. Redefine materiality to include socio‑economic security
Investors and rating agencies should treat chronic worker insecurity as a material risk. Disclosure frameworks (GRI, SASB, ISSB) can be extended to include metrics on contingent labour ratios, wage volatility, and access to benefits – not just for direct employees but across supply chains.
2. Advocate for a basic income or basic capital
True universal basic income (or universal basic capital) would provide the floor of security that the precariat needs. ESG engagement can push large-cap companies to support pilot programmes and tax policies that fund such measures – not as charity but as a structural stabiliser for market economies.
3. Promote control of time
Corporate governance codes should address algorithmic management practices that erode worker autonomy. This includes banning “on‑call without pay” scheduling, ensuring right‑to‑disconnect, and requiring transparency in AI‑driven shift allocation. The EU’s Platform Work Directive is a good starting model.
4. Revive the digital and physical commons
ESG frameworks should incentivise investment in public digital infrastructure (e.g. open‑source AI training data, community‑owned platforms) and physical spaces for deliberative democracy. This counters the privatisation of the digital sphere and gives the precariat a voice.
5. Decommodify education and knowledge
Corporate ESG policy can fund lifelong learning accounts, not tied to specific employers. Governments can mandate that AI‑driven hiring and promotion tools be audited for bias, so that workers have a right to understand how their skills are being valued.
6. Democratise capital through sovereign wealth funds
Standing points to Alaska, Norway, and Iran as rare examples where national capital funds operate as mechanisms for progressive distribution. ESG‑aligned investors can advocate for similar funds in other jurisdictions to channel a portion of AI productivity gains to universal dividends.
Conclusion: From Precariat to Progressive Force
Standing ends with PB Shelley’s lines from The Masque of Anarchy, “Ye are many, they are few!” But numbers alone are not enough. The precariat – amplified and accelerated by AI – needs a transformative agenda, not protests. ESG policymaking can provide a language and a set of tools to make that agenda concrete by redistributing security, time, space, knowledge and capital.
The alternative is a dystopia of permanent precarity where AI serves only the plutocracy.
For companies, investors and regulators, the choice is clear. Use the S and G of ESG to build a future where technology enables flourishing, not a new underclass of society.
Contact us to discuss how we can support your ESG policymaking needs.
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Reference:
Standing, G. (2014). O precariado e a luta de classes. Revista Crítica de Ciências Sociais, (103), 9-24. doi.org