Books: The Labor Divide
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Sam Vaknin >> The Labor Divide
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VII. Punctuated Demographic Equilibria
Demographic trends are not linear. They resemble the
pattern, borrowed from evolutionary biology, and known as
"punctuated equilibrium". It is a fits and starts affair.
Baby booms follow wars or baby busts. Demographic
tendencies interact with economic realities, political
developments, and the environment.
VIII. Emergent Social Trends
Social trends are even more important than demographic
ones. Yet, because they are hard to identify, let alone
quantify, they are scarcely to be found in the models used
by the assorted Cassandras and pundits of international
development agencies. Arguably, the emergence of second and
third careers, second families, part time work, flextime,
work-from-home, telecommuting, and unisex professions have
had a more decisive effect on our economic landscape than
any single demographic shift, however pronounced.
IX. The Dismal Science
Immigration may contribute to growing mutual tolerance,
pluralism, multiculturalism, and peace. But there is no
definitive body of evidence that links it to economic
growth. It is easy to point at immigration-free periods of
unparalleled prosperity in the history of nations - or,
conversely, at recessionary times coupled with a flood of
immigrants.
So, is Le Pen right?
Only in stating the obvious: Europe can survive and thrive
without mass immigration. The EU may cope with its labour
shortages by simply increasing labour force participation.
Or it may coerce its unemployed (and women) into low-paid
and 3-d (dirty, dangerous, and difficult) jobs. Or it may
prolong working life by postponing retirement. Or it may do
all the above - or none. But surely to present immigration
as a panacea to Europe's economic ills is as grotesque a
caricature as Le Pen has ever conjured.
The Future of Work
By: Dr. Sam Vaknin
Also published by United Press International (UPI)
A US Department of Labor report published, aptly, on Labor
Day 1999, summed up the conventional wisdom regarding the
future of this all-pervasive pastime we call "work".
Agriculture will stabilize, service sector jobs will
mushroom, employment in the manufacturing sector will be
squeezed by "just in time" inventory and production systems
and by labor-intensive imports. An ageing population and
life-prolonging medicines will prop up the healthcare
sector.
Yet, the much touted growth in services may partly be a
statistical illusion. As manufacturing firms and households
contracted out - or outsourced - hitherto internal
functions, their employment shrank while boosting the job
figures of their suppliers. From claims and wage processing
to take-away restaurants and daycare centers, this shift
from self-reliance to core competencies spawned off a
thriving service sector. This trend was further enhanced by
the integration of women in the workforce.
The landscape of future work will be shaped by
technological change and globalization. The latter is
erroneously considered to be the outcome of the former. But
as "The Economist" has pointed out in a series of "School
Briefs", the world has been much more globalized one
hundred years ago, long before the Internet.
These two independent trends reinforce each other in a
virtuous cycle which will profoundly impact the future of
work. Enhanced flows of information increase market
efficiency, partly through global competition and price
transparency and partly through shorter product life
cycles.
But innovation by itself would not have had such an impact
on work patterns. Manufacturing techniques - chiefly
miniaturization - had a profound effect on the relocation
of work from factory and office to home and car. Machine
tools and office equipment well into the 1980's were too
cumbersome to install at home.
Today everyone has a telephone and many have a fax, a
mobile phone, an Internet connection, and a PC. As a
result, work-from-home and flextime are burgeoning.
Increasingly - with the advent of Internet-enabled PDA's,
laptops, beepers, and wireless access to e-mail and the Web
- so does work-on-the-move: in cars, in trains, everywhere.
Work has become ubiquitous.
This harks back to the past. Even at the end of the 19th
century - at the height of the Industrial Revolution - more
than half the population still worked from home. Farmers,
medical doctors, blacksmiths, small time retailers - lived
and slogged in combined business and domestic units. A
steady career in an organisation is a recent invention, as
William Bridges pointed out in his book "Job Shift".
Harlan Cleveland and Garry Jacobs explained the emergence
of Organisation Man in the newsletter of the World Academy
of Art and Science:
"The job -- the kind that you had, or hoped to get --
became a central fixture of life in industrial countries.
Its importance was great because it served many needs. For
managers and efficiency experts, job assignments were the
key to assembly-line manufacturing. For union organizers,
jobs protected the rights of workers. For political
reformers, standardized civil service positions were the
essence of good government. Jobs provided an identity to
immigrants and recently urbanized farm workers. They
provided a sense of security for individuals and an
organizing principle for society."
Currently, three types of work are surfacing. Old,
industrial-age, permanent, and workplace-bound jobs are
increasingly the preserve of low and medium skilled workers
- about 80 percent of the workforce in Britain. New,
itinerant, ad-hoc, home-based, technology-intensive, brand-
orientated, assignment-centered careers characterize
another tenth of the workforce. Temporary and contract work
work - mainly in services - account for the rest. It is a
trichotomous landscape which supplanted the homogeneous
labor universe of only two decades ago.
Nowadays, technologically-literate workers - highly
skilled, adaptable, well-educated, and amenable to
nontraditional work environments - are sought by employers
and rewarded. The low skilled, computer-illiterate,
uneducated, and conservative - lag behind.
In 1999, more than 13 million people in the USA alone held
multiple jobs, or part time, or contract jobs (i.e.,
freelancing). Work from home and flextime accounted for one
fifth of all other employees. Contrary to their image as
rigid labor marketplaces, self-employment and temporary
work were more prevalent in the European Union (except
Britain) than in the USA.
The Bureau of Labor statistics in the US Department of
Labor noted these demographic changes to the workforce.
Though pertaining to the USA, they are applicable, in
varying degrees, to the rest of the world, with the
exception of certain parts of Africa. America is a
harbinger of trends in employment and of changes in the
nature of work.
1. Labor force growth will slow down to an annual 0.2
percent after 2015 - compared to 2.6 percent between 1970-
1980 and 1 percent during the last decade. This is when
Baby Boomers start retiring and women's participation will
level off. Women already make almost half the labor force.
More than three quarters of all mothers are working. The
propensity to hold a job is strongest among single mothers.
2. The median age of the labor force will reach a
historically unprecedented 41 years in 2008 - compared to
35 in 1978. As middle management layers are made redundant
by technology and as start-ups mature - experienced
executives will be in great demand and short supply. Even
retirees are being recalled as advisors, or managers of
special projects. This - coupled with a dramatic increase
in functional life expectancy - may well erode the very
concept of retirement.
The Urban Institute predicted, for ABCNews, that, as
Generation X, Generation Y, and young immigrants enter the
workforce, it will be polarized between the under-25's and
the over-45's.
3. Labor force growth is strongest among immigrants and
minorities. In the USA, they will make up more than a
quarter of the total workforce in 2008. Those with higher
education and those devoid even of a high school diploma
are over-represented among recent immigrants.
4. College graduates already earn twice as much - and their
earnings are still growing in real terms - as people with a
high school diploma whose inflation-adjusted earnings are
dwindling. High school dropouts are four times as likely to
be unemployed as college graduates. These disparities are
going to be further exacerbated. On the job training allows
people to catch up.
5. Five of the ten fastest growing occupations are
computer-related and three are connected to healthcare.
Yet, contrary to hype, half of the new jobs created by 2008
will still be in traditional, labor-intensive, sectors such
as retail or trucking. One in two jobs - and two in three
new ones - are in small companies, with less than 100
workers. Even behemoths, like General Motors, now resemble
networks of small, autonomous, businesses and profit and
loss centers.
6. Much hectoring and preaching notwithstanding, the burden
of wage-related taxes and benefits in the USA is heavy, at
one half the base salary - though it has held stable at
this level since 1970.
7. The shift from defined benefit to defined contribution
retirement plans continues apace. This enhances labor
mobility as workers are able o "carry" their personal plans
with them to new employers. Still, the looming social
security crisis is far from resolved. In 1960, there were 5
workers per every beneficiary.
By 2060, there will be less than two. Moreover, close to a
third of all beneficiaries will be the relatives of retired
or deceased workers - rather than the pensioners
themselves. This is likely to create severe social tensions
between workers and beneficiaries.
8. Job tenure has decreased markedly in all age groups over
the last two decades - but only among men. Both boom and
bust contributed. Economic growth encourages job-hunting,
job hopping, and job-shopping. Recessions foster downsizing
and bankruptcies. Jobs are mainly obtained through nimble
networking. This is especially true at the higher rungs of
the income ladder.
Still, the median figure for job stability hasn't changed
much since 1983 in both the USA and the UK. Moreover, some
jobs - and employment in some states - are far more stable
than others. Transformation across all professions took
place among workers younger than 32 and workers with long
tenure.
The job stability of the former decreased markedly. By the
age of 32 they had already worked for 9 different firms,
according to figures published by "The Economist". The job
security of the latter has vanished as firms, until less
than 2 years ago, succumbed to a "youth cult" and inanely
rid themselves of precious social and professional capital.
Another phenomenon is the emergence of a Hollywood-like
star system among ultra-skilled workers - both technical
and executive. Many of them act as freelancers and get paid
with a mixture of cash and equity. They regard themselves
as a brand and engage in brand marketing on a global scale.
The more capable they are of managing organisational
change, leading teams, and identifying business
opportunities - the more rewarded they are, according to a
study by Timothy Bresnahan, published in the June 1999
issue of the "Economic Journal".
9. About 3 percent of the workforce are employed through
temporary help agencies. This is 6 times the figure in
1983. Public prejudices aside, even engineers and system
analysts work as "temps". Many people prefer Mac-jobs,
freelancing, or temporary assignments. It allows them to
preserve their independence and free lifestyle. More than
90 percent of all Americans are happily ensconced in their
jobs.
10. Work gradually encroaches on family life and leisure
time. In 1969, couples aged 25-54 toiled a combined 56
hours a week. By 2000, they were spending 67 hours at work
- or 70 hours if they were childless. This increasing
absence has probably contributed to the disintegration of
the nuclear family, the emergence of alternative family
systems, and the loosening of community ties.
Workplaces and employers - and employment laws - have as
much adapting to do as do employees.
The UK's Economic and Social research Council runs a Future
of Work Programme, launched in 1998, to investigate
"changing organisational forms and the reshaping of work".
The program studies novel work-organisation structures -
temporary work, franchise, multi-employer sites,
partnerships, supply-chain collaboration, and variants of
outsourcing, including outsourcing to the company's own
employees.
In Working Paper no. 14 published November 2000, the
authors say:
"The development of more complex organisational forms
involving cross-organisation networking, partnerships,
alliances, use of external agencies for core as well as
peripheral activities, the growth of multi-employer sites
and the blurring of public/private sector divide have
implications for both the legal and the socially
constituted nature of the employment relationship.
The notion of a clearly-defined employer-employee
relationship becomes difficult to uphold under conditions
where the employee is working in project teams or on site
beside employees from other organisations, where
responsibilities for performance or for health and safety
are not clearly defined, or involve organisations other
than the employer.
This blurring of the relationship affects not only legal
responsibilities, grievance and disciplinary issues and the
extent of transparency and equity in employment conditions,
but also the definition, constitution, and implementation
of the employment contract."
In a futuristic piece published in the last day of the
millennium, ABCNews described "corporate hotels" where one
would work with other employees from the vicinity. Up to
one third of all employees will work from home, according
to David Pearce Snyder of "The Futurist". Companies will
share "hot desks" and start-up incubators will proliferate.
But the phenomenon of self-employment in conjunction with
entrepreneurship, mostly in the framework of startups and
mainly in the services and technology sectors - is still
marginal. Contrary to contemporary myths, entrepreneurship
and innovation are largely in-house corporate phenomena -
known as "intrapreneurship".
Yet, workers did not benefit from the wealth created by
both the technology-engendered productivity rise and the
ensuing capital markets bubble. Analysts, such as Alan
Harcrow of "Workforce" magazine have long been sounding the
alarm: "The thing is, the average employee hasn’t been able
to enjoy the benefits of increased productivity. There’s no
reward."
A recent tome by Kevin Phillips - "Wealth and Democracy: A
Political History of the American Rich" - claims:
"The top 1 percent pocketed 42 percent of the stock market
gains between 1989 and 1997, while the top 10 percent of
the population took 86 percent." Most American had more
invested in their car than in their stock exchange
portfolio. To Phillips, America is an old-fashioned, though
no less pernicious for that, plutocracy.
No wonder that 40 percent of all employees hate the notion
of working - though they may like the specific jobs they
are in. Work is perceived by them as an evil necessary to
finance their vacations, hobbies, and socializing - and, by
many, as a form of exploitation. Insecure, bored, and
disgruntled workers make bad entrepreneurs. Forced self-
employment does not amount to entrepreneurship and, even in
America, the former far outweighs the latter.
There are other ominous signs. The worker of the future
will interface mainly with machines or with others through
machines - often from home. The merging of home and work,
the seamless fusion of leisure time and time on the job -
are already creating a privacy backlash and "out of the rat
race" social movements.
Admittedly, future workers are likely to be much more
autonomous than their predecessors - either by working from
home or by participating is "self-governing teams" and
"stakeholder councils". Yet, the aforementioned blurring of
boundaries between private life and working time will exact
a heavy psychological and social toll. It will impact
family life adversely and irreversibly. Job insecurity
coupled with job hopping and personal branding will
transform most elite workers into free - but anxious -
agents trapped in a process of perpetual re-education.
As globalization and technological ubiquity proceed apace,
competition will grow relentless and constant. Immigration
and remote work will render it also global. Insurance
claims processing, airline bookings, customer care, and
many other business-support services are farmed out to
India. Software development takes place in Israel and
Ireland.
Society and community will unravel in the face of these sea
changes. Social safety nets and social contracts - already
stretched beyond their foreseen limits - will crumble. Job
protection, tenure privileges, generous unemployment,
retirement, and healthcare benefits - will all vanish from
the law books and become a nostalgic memory. The
dispossessed will grow in number and in restlessness.
Wealth will further concentrate in the hands of the few -
the educated, the skilled, the adaptable - with nary a
trickle down effect.
Some scholars envision a plutocracy superimposed on a post-
industrial proletariat . Dysfunctional families and
disintegrating communities will prove inadequate in the
face of growing racial tensions and crime. Ironically, this
dystopian future may well be the inevitable outcome of this
most utopian period - the present.
END OF THE LABOR DIVIDE BY SAM VAKNIN
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