Sunday, August 09, 2015

World Without Work, Amen

The point of departure for this post is a welcome article in the July Atlantic entitled, "A World Without Work".  Typically for this magazine, the cover story reference to it--"Technology will soon erase millions of jobs. Could that be a good thing? THE END OF WORK"--is a provocative exaggeration for a much more  thoughtful essay about the gradual disappearance of regular jobs, and what may replace them, particularly what could replace the hours which will be freed.  This is the lead article for their annual "Ideas Issue".

The theme of the article, with which I unambiguously agree, is that the centrality of the workplace in our lives is going to be changed in the decades to come, and that is going to cause massive changes in the fabric of our society, about which we had better start thinking.  The timing of the article, in a period in which net jobs have been increasing steadily and the official unemployment rate dropping, is a bit odd, but as I have been advised a few times in the corporate environment, "better to do the restructuring when times are good".

The principal observations made by the author, Derek Thompson, are that in the current evolutionary trends of our economy:
  1. labor no longer drives the creation of economic value (take that, Karl Marx!); 
  2. improvement in software is now making it possible to eliminate a wider variety of jobs, including white-collar ones; and 
  3. working-age men, young and old, are going through prolonged periods of unemployment or underemployment.  
Note that the last point refers specifically to males, as I suspect the trend of working women is very different.  Also, in spite of the heading "world without work", the scope of this essay is limited to the American labor economy.  The author, Derek Thompson, backs the above arguments with sufficient facts and then tries to examine their implications for our society.

He chose to focus his study on Youngstown, Ohio, which had massive job layoffs stemming from the closing of the Jones & Laughlin steel mill in the 1970's; the selection of Youngstown allowed him to look at the longer-term implications and how the culture of the small city adapted to the change.  He found that the lack of work created permanent negative disruption in the social fabric, the local economy, and the psychology of the residents.  On the positive side, he found reason for hope in the creative efforts with which people make ends meet, and in a discarded foundry re-purposed for the use of people pursuing interests in various crafts.   Another area of possible future development could be increased creativity in the leisure area.  Unfortunately, he states (referring to survey data) that the jobless spend their freed-up time sleeping or watching TV.  Much in the personal response to joblessness depends on whether the prior employment was "just a job", part of a career development path, or a personal calling, but for any of the three, in our current society prolonged joblessness is emotionally devastating.

Thompson addresses two other critical key points in his analysis.  One he refers to as the old "Luddite fallacy", that technology will eliminate jobs, which has been somewhat of a false wolf cry in the past. This time the reduction in the demand for labor seems real to him (and to me, as well), though he backs off from the extrene claims proposed in his essay's title, or in the opinions of some experts, that we are entering a "post-work" society.  The other is that in American society, there are the over-employed and the under-employed (and the constantly imperiled under-utilized, where the job losses will always occur, due to the rational activity of employers).  Salaried employees are working longer hours, while the ranks of those who have to settle for less than full-time employment continue to increase.  

There is considerable merit in his discussion of government's role in the transition in the American economy to a society with less requirement for full employment (defined as full-time work for all who want it). He notes the effort in the German economy to promote job-sharing, where more employees work shorter hours,  suggests the possibility of a guaranteed minimum income to be paid for by changes in the taxation policy (he specifically suggests changes to the capital gains tax), and then, most usefully, points to some areas where government could encourage greater employment, such as in care for the growing ranks of elderly people. 

From my reading, the author's own point of view emerges in the next-to-last paragraph: 
When I think about the role that work plays in people’s self-esteem—particularly in America—the prospect of a no-work future seems hopeless. There is no universal basic income that can prevent the civic ruin of a country built on a handful of workers permanently subsidizing the idleness of tens of millions of people. But a future of less work still holds a glint of hope, because the necessity of salaried jobs now prevents so many from seeking immersive activities that they enjoy.

Here I find myself in complete agreement with the author, as I suggested in my 2010 post "More Jobs--How About Less Work?", which was a reprint of a post I wrote in 1994, then offered in the old site a few years later.   It has taken awhile, but someone in a mainstream publication has finally backed my radical notion that those politicians who claim to be able to create millions of new jobs (see current Presidential campaign) are promoting a futile exercise, and that the policy question of the era is how to restructure our society so that there is a more just distribution of work.  (The inequality of wealth issue, which you occasionally do hear about--though not in a Republican debate sponsored by Fox News--is an aftereffect of this problem.)

Ultimately, instead of the work Have's and Have-Not's, I think the objective is an economic system that makes it possible for those whose primary interests are outside the workplace to put in hours sufficient for their necessities, while those who are enduring apprenticeship for the sake of their career development, those who start businesses to realize their dream, and those who pursue socially beneficial calls for the devotion of their efforts can all be accommodated. Many would choose the security of a predictable income and retirement benefits proportionate to that income, while others would choose the path of greater risk and reward.

The item I have pointed to in recent years as an immediate issue is the problem of health care for the part-time worker. Obamacare has not helped particularly with this:  the cutoff at 30 hours for a "full-time worker" whom an employer must provide with access to healthcare (or pay a fine, if they have enough of them) will tend, over time, to add more part-time workers to the economy, ones who will have to pay for healthcare they can barely afford, and less full-time workers for whom employers need to contribute toward healthcare benefits.  The solution I would propose would be a carrot, rather than a stick: give employers an incentive to include part-time workers in their healthcare offerings. Part-time workers would benefit enormously from this--they might be able to cut back on that second, or third, part-time job if their "primary" part-time employer made healthcare benefits available--and that would make more work available for others.  For employers, a well-calibrated incentive would make them more indifferent to these categories of employees, with a better division of labor and ultimately reducing outsourcing while improving productivity.

I also like President Obama's recent proposal to raise substantially the income level at which salaried workers would no longer be "exempt" from the benefit of overtime wages.  This will benefit lower-salaried workers, make more work available to more people, and improve quality of life.  It is an adequate substitute for the weakness of unions in this particular area; when they were stronger, they were able to obtain overtime pay for their membership.

On the other hand, comments like Jeb Bush's that "Americans just need to work longer hours" to grow the economy are not helpful, or practical.  It would be one thing if he had a plan to give the underemployed a more equal distribution of labor, but I don't see that. Finally, I differ with those who advocate policies based on their potential for creating jobs that are unnecessary (like military weapons development, or building oil pipelines)--it's waste, and unsustainable, a losing battle.  At best, government-sponsored make-work jobs are a short-term palliative during macroeconomic recessions, and they will never address the long-term undersupply of work with our current socioeconomic structure.

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