A recent history of "the future of work"
The conversation around "the future of work" has deep roots. As it reaches a head, it is clear that it is ultimately a systems design issue.
The impact of COVID-19 has given rise to a heated and wide ranging conversation on the changing world of work and the prospect that many of the opportunities that provided economic and social stability in the 20th century have forever lost their footing. At the heart of this discussion is the effect of technology on the economy, the labor market in particular, as machines are increasingly taking over human cognitive tasks.
Even before the pandemic, there was a conversation beginning to take shape in this space. For example, a 2013 study by researchers at Oxford University posited that as many as 47% of all jobs in the United States are at risk of “computerization.” More recently, the World Economic Forum’s The Future of Jobs report, estimates that 5 million jobs will be lost to automation by 2020 and that the number will keep growing.
At the same time, there has been growing attention to the issue of economic inequality, alongside growing concerns over an increasingly polarized society. Though described variously as comprised of winners/losers, digital haves/have nots, and high skill achievers/low skill survivors, attentions converge around the point that both white and blue collar jobs are disappearing and the middle of the American economy is being steadily carved out.
These concerns are not without significant precedent. British economist John Maynard Keynes coined the term “technological unemployment” in the 1930s to describe the displacement of workers by labor-saving machines and the dawn of a new era of greater leisure. In the 1990s, economists Sherwin Rosen and Robert Frank predicted that globalization and technology could create “superstar” or “winner take all” labor markets.
In his 1995 book, The End of Work, Jeremy Rifkin warned of a new phase of history — one characterized by the steady and inevitable decline of jobs in the face of a high-tech revolution. Sophisticated computers, robotics, telecommunications, and other technologies will repace humans in most every sector from manufacturing, retail, and financial services, to transportation, agriculture, and government. The future of work, Rifkin argued, is polarized between an information elite and growing numbers of permanently displaced workers, who have few prospects in an increasingly automated world.
The tone of the current discussion has become more urgent as commentators see that the impact of this transformation is neither small nor short-lived. However, it has also become more hopeful, as more people join the new world of work and advocate for policies and protections that safeguard incomes as well as social meaning in this time of disruption. Increasingly, issues like inequality, persistent underemployment and unevenly distributed access to opportunities are viewed as the outcome of poor choices, and as such the pathway toward otherwise catastrophic ends can be avoided through better decision making.
As the post-recession economy was beginning to stabilize, economist Tyler Cowen described a world cleaved in two by technology. In his 2013 book, Average is Over, Cowen predicts a country where success is largely confined to a small cadre of high achievers while everyone else slumps into a realm of lower expectations and diminished opportunities. "We will move from a society based on the pretense that everyone is given an okay standard of living to a society in which people are expected to fend for themselves much more than they do now." In his telling, successful laborers will be those who can best adapt to a machine driven world, offering skills that are complementary to technology. Cowen is but one voice among many on this subject. Notably, economists Robert Gordon of Northwestern University and Michael Spence of New York University and former Treasury secretary Lawrence Summers have also described the economic havoc of inequality, stagnation and polarization.
Among the most influential on the subject are MIT professors Erik Brynjolfsson and Andy McAfee, who offer a slightly more optimistic hypothesis - namely that the global economy is on the brink of a period of dramatic growth driven by smart machines and new opportunities for human work. In their 2014 book, The Second Machine Age (largely a reprise of their 2012 ebook Race Against the Machine), Brynjolfsson and McAfee are staunchly against the position that smart machines will reduce human labor to irrelevance, and offer instead the view that technology’s bounty will lead to new kinds of work. In turn, they argue that new skills will be valued - in place of performing repetitive physical or transactional tasks, humans will have opportunities to use their creativity, empathy, and problem-solving skills. While they don’t foresee an easy transition, they advocate for creating a glidepath in the form of altered educational systems that move away from the industrial-era emphasis on math and reading to a broader set of interpersonal and intellectual skills that allow people to work gracefully alongside machines.
That said, Brynjolfsson and McAfee hardly dismiss the threat of technological unemployment and provide a classification of three overlapping winners and losers that technical change creates: 1) high-skilled vs. low-skilled workers; 2) superstars vs. everyone else; and 3) capital vs. labor. They maintain that the winners in one category are more likely to be winners in the other two as well, which concentrates the effects of skill-biased technical change, increasing the demand for high-skill labor while reducing or eliminating the demand for low-skill labor. They - and others - argue that this radical reshaping of work calls for new policies to protect the vulnerable while distributing the gains of the new age. They caution: “The wrong interventions will hurt the economic prospects of millions of people around the world and leave them losing a race against the machines, while the right ones will give them the best chance of keeping up as technology speeds forward.”
Richard Susskind and Daniel Susskind similarly predict a world in which conventional professional categories will soon become obsolete. Their 2016 book, The Future of the Professions envisions an unambiguous decline in demand for traditional employment categories and the conventional professional worker. But, they argue, new and emerging roles will offer the potential to provide good work, drawing especially on skills like creativity and craftsmanship, advanced reasoning, and empathy.
Running parallel to the work of Brynjolfsson and McAfee, futurist Martin Ford argues against the idea that technology will displace old jobs while creating new opportunities. He argues instead that technology now threatens jobs for even the most educated and highly skilled, and tasks that would seem to require distinctively human capacities for nuance or feeling are increasingly assigned to algorithms. Looking to companies like YouTube and Instagram, which have “tiny workforces and huge valuations and revenues,” he says new jobs are “rarely, if ever, be highly labor-intensive.” In a recent article he further elaborated: “The innovations of the future — regardless of how dramatic and broad-based they may be — are very unlikely to create that number of jobs, and the jobs they do create may well require skills and education beyond the capability of the average worker.” Ford argues instead for broader changes to economic policy, such as a guaranteed minimum income - a position that many have come to advocate for - that could help translate innovation into prosperity for all.
Ford’s hopeful regard for policy levers is not shared by all, however. Academic-entrepreneur Vivek Wadhwa, for instance, does not believe that government can do as it did in the industrial age in terms of creating general employment opportunities. “They can barely keep up with the advances that are happening in technology, let alone develop economic policies for employment.” He argues that as waged opportunities dry up and technology causes the price of goods to decrease, the goal of full employment may be out of tune with reality: “we may not need the entire population to be working. There is surely a possibility for social unrest because of this; but we could also create the utopian future we have long dreamed of, with a large part of humanity focused on creativity and enlightenment.” Wadhwa is far from alone in imaging the utopian dimensions of the future labor market. Afterall, robots could mean an end to drudgery - the freedom to engage in more creative, emotional or meaningful pursuits. A small body of writers and scholars including Peter Frase and Benjamin Hunnicutt - dubbed “post-workists” - welcome the end of labor as we know it and the shift away from work for work’s sake. Others, however, including Brynjolfsson and McAfee caution against the embrace of a workless future, stressing the important if less tangible benefits of employment, such as personal meaning and value.
A number of theorists have also noted how the future of work is tied to the changing geography of opportunity and economic activity in the US and increasing regional specialization. According to Richard Florida, “The economic landscape is being reshaped around two kinds of hubs—centers of knowledge and ideas, and clusters of energy production.” Outside these metro areas, he says, the economy remains weak and prospects are few. While these hubs are dynamic centers of job creation and innovation, they also have the effect of concentrating wealth and opportunity. “As these clusters of highly educated people form and grow, they tend to push out the middle class, resulting in a ruthless sorting of people and places. As great as its potential may be, this new economic landscape is also notable for its widening fissures.”
The platform economy
For many Americans, employment no longer follows the conventions that defined the better part of the 20th century of waged employment at a firm offering a salary and benefits in exchange for fixed tasks. Instead, recent years have seen growing numbers participating in what is variously described as the gig, 1099, on-demand, or platform-based economy. By 2020, more than 40% of the US workforce will be so-called contingent workers, according to a study conducted by software company Intuit in 2010. That’s more than 60 million people. A number of freelance marketplaces have emerged in recent years, including UpWork, Guru, and HourlyNerd, which match high skill service professionals specializing in writing, design, accounting, law, business and code, among other skills, with businesses of all sizes on a per project basis. These platforms stand to benefit both clients and providers - offering the former with access to resources not housed internally, and the latter a source of primary or supplementary income. In 2013, on Elance and Odesk, which have since merged as Upwork, there were 2 million businesses seeking services across 2,500 skills and 8 million registered freelancers, who in 2013 completed $750 million in work projects. The merged platform expects to have $930 million in annual freelancer billings this year. A quarter of its 8 million freelancers are based in the U.S. Their annual earnings come to $179.8 million a year, or 19 percent of the worldwide total. And according to 2015 research from the Freelancers Union, fully one-third of working Americans have freelanced in the past year. According to a recent survey from the Center for Global Enterprise, platform companies have a total market value of $4.3 trillion and an employment base of at least 1.3 million direct employees and millions of others indirectly employed.
The expansion of platform-mediated work has prompted a growing discussion around the implications for the economy, labor, and policy. Viewed largely as part of the shift toward a “gig” “contingent” or “1099 economy,” platform work has elicited polarized reactions. Martin Kenney and John Zysman have argued that the labels used to describe this phenomenon matter because they “influence how we study, use, and regulate these digital platforms.” Some tout the new freedoms and flexibility afforded workers, and new opportunities to capture otherwise unused human capital. Some even argue that in place of clear economic benefit, platform based work can provide non-economic rewards, such as increased autonomy and entrepreneurial activity. McKinsey, for instance, takes an optimistic view: a 2015 report makes the case that labor platforms can draw inactive labor into the workforce, boost productivity, and raise GDP. Others lament the decline of traditional labor-employer obligations, the collapse of safety nets, and see the spread of platform-based work as a symptom of the growing precariat and a global race to the bottom of labor standards. The National Employment Law Project, for instance, maintains that the technology used by these companies and others holds enormous potential to benefit both businesses and workers, but that it is necessary to maintain labor standards to ensure that workers don’t shoulder an undue burden of risk.
There is also the matter of the size of the this workforce - a question that has garnered growing interest, in no small part due to the difficulty in classifying laborers in alternative work arrangements. In 1995, the BLS first published the Contingent Work Survey (CWS), which analyzed "contingent work" and "alternative employment arrangements" for the first time. While the bureau periodically released its analysis of this economic sector until 2005, the agency lost funding to do so. However, the BLS announced it will be reissuing the supplement every two years.
Economists Lawrence F. Katz and Alan B. Krueger, research associates at the National Bureau of Economic Research, are working to fill this void and include in their work a new labor category of "workers using an online intermediary.” While the "Uberization" of the economy is actually quite small when compared to traditional contingent work and alternative employment, Katz and Krueger note that online intermediaries are growing at a significant rate.
These significant shifts in the nature of employment have prompted efforts to rethink the way workers are classified. Krueger and Seth Harris, a former deputy secretary of labor, have proposed the creation of a new “independent worker” designation. These workers would not be eligible for overtime pay or unemployment insurance. But they would have the right to organize, and their employers, whether online or offline, would withhold taxes and make payroll tax contributions.
The platformization of the economy has sparked not only a discussion around labor, but around the differentiation of platforms themselves. Kenney and Zysman has suggested that a unifying feature is that the advantage of platform-based companies often “rests on an arbitrage between the practices adopted by platform firms and the rules by which established companies operate, which are intended to protect customers, communities, workers, and markets.” While acknowledging the growing economic significance of platforms, they admit to more questions than answers with regards to the immediate and long term effects of labor platformization. “Will the platform economy, and the reorganization it portends, catalyze economic growth and a surge in productivity driven by a new generation of entrepreneurs? Or will the algorithmically driven reorganization concentrate substantially all of the gains in the hands of those who build the platforms? Will it spark a wave of entrepreneurial possibilities, unleash unimagined creativity, free workers from oppressive work schedules, or unleash an avalanche of dispossessed workers who are trying to make a living with gigs and temporary contracts? If we do not interrogate these technological trajectories, we risk becoming unwitting victims of their outcomes.”
Platforms have also been at the center of regulatory controversy. In addition to monopolistic and tax concerns, there has been a storm of interest around the way platforms classify workers in ways that adversely affect wages and benefits.
A host of commentators have placed emphasis on the idea that the problems currently surrounding labor insecurity are not inherent to technology, but rather result from poor design and management decisions. And as a result, it is possible to correct course through design interventions. Tim O’Reilly, has said, for example: “Technology is destroying jobs, but only because we have told it to do so. We have told it that people are a cost. We have told it that people should be eliminated from the system. There are a set of choices, and we have actually built incentives into our economy to encourage those choices.” In its place, he argues, technology can be used to augment human labor, allowing people to do what was previously not possible. “We have to stop worrying about “jobs” and start focusing on how to use the current generation of technology to enable people to do things that were unthinkable in the 20th century.”
New protections for new work
The general shift toward automation and platform-based work has also prompted a heated discussion around how to protect workers in this rapidly changing and largely unknown environment. A deep ambivalence underscores discussions of how technological advancement affects the lives and livelihoods of average workers. While some extoll of the benefits of increased flexibility, mobility, and collaboration, others argue that this shift represents an incursion against hard won rights and that the language of heightened self-reliance and autonomy is code for vulnerability.
More recently, these criticisms have seeded interest in creating protections for digital laborers. Trebor Scholz has asked what the possibilities for labor solidarity are in the digital age, and maintains that analyses of labor platforms often focus on business growth and regulatory issues at the expense of workers experiences. “In Silicon Valley and the halls of business schools all over the country, discussions about these market incumbents focus on their revenue streams and resistance against regulation but the workers who wake up to go to work online every day are a blind spot in these discussions.” Scholz makes the case, however, that precariousness is not an inevitable outcome of labor in the new economy and that platform cooperatives could provide needed securities. “Worker–owned cooperatives could design their own apps-based platforms, fostering truly peer-to-peer ways of providing services and things, and speak truth to the new platform capitalists.”
Sara Horowitz of the Freelancers Union advocates for uncoupling benefits from jobs, and the nonprofit group Peers claims it wants to make the sharing economy a better work opportunity, by making it easier for workers to find, compare and manage work in the sharing economy.
In response to the increase in platforms connecting workers to domestic labor jobs, the National Domestic Workers Union released the Good Work Code, a set of eight principles for defining “good work” for digital laborers, such as a livable wage, safety, stability and opportunities for advancement. And the Fair Care Pledge, a collaboration Care.com and the National Domestic Workers Alliance commits individual domestic employers to pay a living wage, provide paid time off and commit to basic standards.
With the changing shape of the labor market has come increasing attention to the question of skills, namely what capacities workers will need to be successful in the marketplace to come. In the face of rapid automation, even those educated at elite higher educational institutions have floundered, seen as lacking the capacities needed to land or keep a good job. Accompanying this is a widespread concern over the nation’s “skills gap” - namely in mid-level skills - an idea premised on the potential mismatch between the unemployed/underemployed and unfilled private sector roles. However, assertions of a skills gap have aroused considerable debate – both over how to best address it and whether it even exists in the first place. Some say that the data used in support of a skills gap lacks credibility and as a result pundits and policymakers are perpetuating a myth that frequently places added burdens on workers themselves. New York Times columnist, Paul Krugman argues for instance that the skills gap is a complete “myth” that diverts attention away from the real issues of job growth and unemployment. He noted that, “The crucial point is that unemployment remains much higher among workers at all education levels than it was before the financial crisis … If employers are really crying out for certain skills, they should be willing to offer higher wages to attract workers with those skills.” Wharton professor and author of Why Good People Can’t Get Jobs, Peter Cappelli has similarly mused: “The first thing that makes me wonder about the supposed “skill gap” is that, when pressed for more evidence, roughly 10% of employers admit that the problem is really that the candidates they want won’t accept the positions at the wage level being offered. That’s not a skill shortage, it’s simply being unwilling to pay the going price.
With regards to skills, Tyler Cowen, argues that traditional higher education will only be of benefit to a small number, and for the greater population cheaper and more rapid models will make more sense. In his view, motivation outweighs traditional means of success: the “slacker twenty-two-year-old with a BA in English, even from a good school” will no longer have a “clear path to the upper-middle-class.” He maintains that the woes of millennials, who are struggling to find their way in the labor market, are “a harbinger of the new world of work to come … lacking the right training means being shut out of opportunities like never before.”
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