Sunday, June 28, 2015
The Way We Work
It’s the old “forest/tree” paradigm, missing the big stuff because of the focus on the here and now. Not to mention the mega-distractions of the presidential campaign, the “Greek problem” in Europe, deteriorating relations with an increasingly aggressive Russian President, Middle East chaos at every turn, Charleston, seminal Supreme Court decisions, etc., etc.
But except for the highest earners in the land, how many of Americans are truly confident about our economic future? How many believe we are going to return to decades of solid economic growth with an even stronger middle class? Who among us is going to predict job stability and the notion of lifetime employment? I don’t know about you, but I am plagued with a very uneasy feeling that the best economic times are behind us, and that global forces are tilting against our once joyous economic hegemony.
That the Supreme Court sustained the ability of people living in states that do not have healthcare exchanges with subsidized premiums to opt into available federal alternatives may have just be a necessary component in the rather obvious changes in the way an increasing number of Americans now make their livings. The Court decision is as much a reinforcement of how Americans work, how they access what used to be company fringe benefits. Getting health insurance would be a huge issue without the Affordable Care Act.
The inflection point in how we work was clearly the 2008 crash and subsequent staggeringly lethargic “recovery.” Private sector unions today have contracted into a very small space in our labor force (6.6% according the Department of Labor). Workers are on their own. What happen to those whose livelihood were impacted by that downturn? Many have found jobs, often at lower pay. Some have started their own little businesses, some succeeding, many not. Others have accepted that “jobs” have morphed into designated “contractor” tasks, with a beginning, a middle… and an end.
“While freelancing was once considered a temporary option, 67% of the 643 freelancers recently surveyed by Contently, an online resource that provides news and insights on the freelance economy, intend to continue freelancing for 10 years or more. When asked if they would take a full-time job in their field with identical pay plus benefits, only 30.2% said yes, 31.9% would decline, and 37.9% responded with a maybe…
“Today 53 million Americans, or 34% of the U.S. workforce, are considered contingent, temporary, diversified, or freelance employees, and that number is expected to reach 40% by the year 2020.” FastCompany.com, June 26th.
Our legal system regarding labor has been mostly focused on traditional employment structures. Unions used to protect the masses on hands-on workers, and government was mostly relegated to safety and minimum wage issues. But with unions almost gone and with the complexion of the work paradigm changing, we need to adapt our social and legal systems accordingly. Fringe benefits, from vacation to retirement to medical, don’t come with self-employment or freelance status. The new “sharing economy” isn’t providing those old-world benefits, which in turn suggests that the government is going to have some long-term social burdens that it is completely unprepared for.
“Senator Mark Warner (D-Va.) made a fortune as an early wireless industry executive. Now, he's on a tear about the tech industry's most disruptive companies and why politicians — especially presidential candidates — aren't talking more about their impact on the labor economy.
“He sees a growing number of sharing-economy companies such as Uber, TaskRabbit and AirBnB transforming employment. About half of all American workers will be freelance or contractual workers by 2020, some economists predict. This trend is upending our notions of what it means to be a worker and what responsibilities a company has to provide benefits like health care and pensions. If unanswered soon, questions about a national social safety net for contractual workers may end up burdening the whole economy, he warns.” Washington Post, June 26th. But old employment models are fading fast in the harsh light of global competition and rather instantaneous access to information.
We are constantly reading stories of mega-companies relocating major operations to foreign shores. As U.S. skills are leveling off, as our commitment to education dwindles dollar-by-dollar under the litany of “fiscally responsible austerity measures,” global competitors are ramping up their skill/educational values at prices Americans are still unable to replicate. That once secure job is now subject to “corporate restructuring” and even bankruptcy. Work is outsourced, fringe benefits are minimized with contract labor and part-time employment, companies are constantly subject to mergers where cost efficiencies inevitably mean layoffs, and automation is replacing human workers by the millions.
So Americans in increasing numbers are accepting this new work world and in many ways learning to embrace it. The only boss they know won’t fire them is… well… themselves. They now have access to more reasonably-priced healthcare, and saving for the future is simply not in their wheelhouse. If they aren’t struggling with student loans, the high cost of housing and rising food prices put off such future planning for most. You can see where that trend is heading as these workers move on in years. For many, these risks are worth being able to set their own schedules or even to work from home.
Still, while working for yourself has its clear plusses, the unpredictability of these work trends isn’t all a bed of roses. For the self-employed, income is a product of how well you run your business and the competitive environment. Long hours and long periods of financial concern. For those who have chosen contract work, there are other issues. “Freelancers are optimistic about the current state of their working conditions, with 65% reporting an increase in job satisfaction in the past year, but there is still reason for concern. Many freelancers still aren't making enough to live on. The median salary of those surveyed by Contently was between $10,001 and $20,000 per year, with just over 19% earning over $50,000 in the past 12 months.” FastCompany.com.
These are reflections of America’s place in a global economy, and change is the only constant. The very definition of a “job” has changed and the expectation of a lifetime commitment to one employer has all but vaporized. It’s time to get our legal system in step with contemporary employment reality. Waiting makes the problems that much more monumental to fix.
I’m Peter Dekom, and human beings are amazingly adaptive to change, but it is usually a good thing to stop and take inventory of those rather deep alterations in our expectations and the way we really live.