The Future of Work: How the 1% and the 99% Become Aristocrats & Peons

by futurist Richard Worzel, C.F.A.

In our last blog (which you can see here), I hosted a guest blogger, Chris Ritchie, who wrote about how the job market is a major problem for people in their twenties and early thirties (whom I’ll call “Echoes”), and got a spirited response from a number of readers. What I’d like to do this time is present some of the comments I got, and some further thoughts about the future of employment, and what it means for our collective future. Let’s start with the responses, many of which can be found in their entirety in the responses following the blog itself:

I got a number of responses that were supportive of Chris’ comments. The most succinct and direct was from Dr. Cheryl Cuttineau, who said, in part: “Great article, and the concerns are definitely worth our attention.” I got both public responses and private emails along these lines.

I also got a range of differing conclusions, such as one posted response from courtney: “In my opinion the fact the same Gen X & / or Gen Y are to blame for allowing their Boomer parents to ‘spoil and make it easy’ (most generally speaking of course) to the point where they in fact got conditioned to have mostly everything without having to work hard …”

I’ve said on numerous occasions that the Echoes are the spoiled children of spoiled children (the Boomers), so I can identify with a lot of what courtney says, but there’s also a little of blaming the victim in her comments. Are the Echoes to blame for the fact that they were spoiled by their parents? Do the Echoes have a responsibility to deal with the situation, regardless of how it happened? Inescapably yes, but I’m not sure I want to point fingers at them for being coddled by their parents (my generation).

Next, I received an email from one reader who is in his mid-50s, and said,

“…I worked 2- 3 jobs per week, went to school, raised a family and had to save and all the rest of it. Further as a middle/upper manager, I was displaced by computerization in 1990. It has taken consistent self motivation and work to stay competitive and further stay on top of my game. … Looking over the fence has never been constructive. I suggest the writer look at the sheer power of his advantage. He can harness his full creative power, produce something and market it, all inexpensively using new age tools, without being tied to any corporation.…”

Again, there’s truth here too. I replied that when I finished university in the 1970s, there were employers lined up to hire me and most of my peers, but that opportunity no longer exists for Chris and his peers. Yet, I also worked hard to create opportunities for myself, and quit my (third) job and went to work for myself after about 6 years of employment. Since then, I’ve worked for my clients, and created my own business opportunities, which is always challenging. And this is what the Echoes are going to have to do: shape their own opportunities. Unfortunately, they probably won’t have the advantages (financial and in terms of experience) of working for others before they make that leap.

A posted response from Dennis both commiserated and empathized, but also warned Chris:

“I feel for you in this job market, as I went through the same thing in the early eighties, while supporting a family of 4. 
I am now in the same situation, looking for work at a retirement age, as I need the income 
to live on. I am a design draftsman by profession, but lack the latest 3D software knowledge 
to compete in today’s market with your generation. Unfortunately the Boomers have left a huge mountain of debt for your generation & ones to come in the future. A lesson to be learned for your generation is to control your spending & debt levels.”

I don’t think I need to comment – it’s not just the Echoes who have suffered in this market, which is a theme I’ll come back to in a moment.

Another email I got was from a friend, someone I worked with years ago, and who went on to great success despite that:

“I found this article interesting but not surprising. You and I have talked at length about childhood now lasting up to 30 years of age. If that is correct, and I think it is, generation ‘Y’ is just now starting to grow up. They should be about 10 years behind us in maturity, seasoning or whatever you want to call it, and they are. If you compare their lives at 30 to ours at 20, you would get a clearer picture. They are doing fine, they will start careers and families later and live longer and have good careers well into the 90’s(?!) Meanwhile their parents, who must accept part of the blame for this long childhood, will help them to finance their first house after they get married, after all, the parents want grand kids to spoil.

“I have been observing this for about 10 years now. The real problem is that girls get it, they are doing just fine. It is the boys who are being left behind in a state of never-ending childhood. Many of them will not make it out of this childhood. Many girls in their 40’s, secure in their careers, owners of a nice house, etc., realize the boy hasn’t grown up and kick the bum out. This to me is the more serious problem.”

Again, there’s a lot of truth in this – childhood has been extended, and young women do “get it” faster than young men. But there’s still more to it than this; there truly is less opportunity now than there was 30, or even 10 years ago.

Next, a response from Malcolm, an English friend of mine, and one of the world’s leading highway design and traffic safety engineers (now retired). He offered a lengthy, thoughtful, and somewhat acerbic response:

“Wow. Who would have believed it. A history graduate who cannot get work. Did he not think of the usefulness of his degree before he went into it? Yes, he has learnt a potentially useful language, but most Chinese want to learn his language as English is the lingua franca of the modern world. … It seems that in Canada, as here in the UK and in much of (mainly southern) Europe, going to University is seen to be the educational way forward no matter how useless the outturn degree is. Greece and Spain have economic problems and 50% unemployment in the 18-25 age group. Italy is similar. France is slightly less. We too [in the U.K.] have around 20% unemployment levels in that age group following a series of Governments who seem to think people must be educated to degree standards rather than encouraging people to leave school at an earlier age and do a more practical training programme. In contrast Germany and Switzerland where apprenticeships and technical training still predominates have young person unemployment in single figures and booming economies in a partially bankrupt world. Does this not spell out a lesson. Using technology and our communications networks, high tech ‘nerdy’ jobs can easily be exported off-shore to India, China, etc, but if you need a plumber or a decorator, need your auto serviced, or an electrician, need your life-support computer repaired, your roads or airports built or fixed you need local people with manual skills, not just brain power. Education priorities need to be rethought and young people given more modest, but achievable, targets in life to aim for.”

Malcolm makes an excellent point: beyond the satisfaction of intellectual curiosity, presumably one spends tens of thousands of dollars on post-secondary education with a career objective in mind. North American society seems to be encouraging young people to go to college and university as if a degree or diploma is, in itself, a guarantee of a career, when it’s absolutely clear that this is not the case. And meanwhile, many of the skilled trades have difficulty attracting young people.

Finally, a very insightful posted response comes from Al Slinkard, who says:

“I grew up in an isolated mountain valley in the [1930s] and 40s and things were pretty desperate in those days also. I left to go to college in 1948, never to return. In my 3rd year I worked 40 hours/week in two part-time jobs and carried a full load of classes. It was a struggle, but with a summer job, I was able to earn all of my school expenses. The very high tuition and living expenses today make this prohibitive today.

“My conclusion: Today’s secondary school students do face a very difficult future, worse than what the poorest of us faced during the Great Depression!”

Additional Thoughts

This topic is more nuanced and has more texture than Chris or I been able to portray. I know, from my own research, that there are very real cultural differences between the different generations, and am keenly aware that there’s a great danger in making broad generalizations about large groups of people – in this case, an entire generation.

I’ve heard stories from friends about the “slacker” mentality of young people today, and suspect that these are more than just anecdotal. Yet, I also know that such anecdotes don’t tell all of the story. I know that GenYs and Millennials work in ways that are different from the Boomers, which doesn’t make them less effective, but often leads to disapproval from the Boomers just because they’re different. And I know that people now in their 20s and early 30s started out with a sense of entitlement that almost certainly came from their Boomer parents pampering of them. In that, they aren’t very different from the Boomers themselves when they were in the same age brackets. But the biggest difference is not in attitude or work ethic, but in the world.

How the Working World Is Changing

That the world of work has changed, there is no doubt. That it will change further is also beyond question. The bigger question is: How will it change?

What we have experienced over the past 40 years is domestic employment being crushed between two different forces: foreign competition and domestic automation.

The foreign competition has been widely discussed, and is widely acknowledged. It has attracted the large majority of the attention, often leading to calls for protection for domestic industries. Fundamentally, what has happened is that the emergence of the global economy, which got a huge boost with the advent of floating exchange rates in 1973, has led to a global labor market as well. As a result, workers here are in direct competition with workers everywhere else, including in China, India, Vietnam, and so on. But when workers here provide fundamentally the same work as workers elsewhere, but at a much high wage rate, they will lose the competition to workers elsewhere.

I remember 20 years ago hearing a union leader, during a strike at GM, saying that he wasn’t going to allow their jobs to be exported somewhere else, just because workers abroad could do them at a fraction of the cost. This is a hopeless attitude, and the history of GM has shown its foolishness and shortsightedness.

But what has drawn less attention, yet will be of greater importance in the future is the rise of automation, computer intelligences, and robots. (See the March 29, 2012 blog “Six Things to Know About the Robots in Your Future”) Computers are getting smarter and more competent at an ever-wider range of tasks formerly done by humans, and so automation will rapidly eat its way up the food chain. This will increase productivity and lower the cost of goods and services, thereby producing a net increase in the standard of living – but only for those who can stay employed. Automation will also displace more and more people from existing jobs, and make it even harder for young people like Chris Ritchie to find a way into worthwhile careers, regardless of their training and background.

What Can We Do About This? What Happens Next?

We know from countries like Spain and Italy that youth unemployment can reach 50%, which will exact a terrible toll on the future of these countries. And we also know that it’s harder for displaced older workers to find new employment, and earn enough to prepare for their retirements.

But if we’re going to face ever-greater pressures from automation in the future, and that’s going to displace an ever-rising percentage of workers, what kind of a future do we have, as individuals, as an economy, and as a society? And what can we do about it?

First, let’s deal with the bad news. We are facing a potential economic and social crisis because of these trends. If people can’t find work, then they can’t make a living. If there are enough people like that, then it creates a tinderbox of social unrest. And, left unchecked, it can lead to a society of aristocrats and peons – wealthy owners and the unemployed poor – that is a straight-line extrapolation of the protests against the so-called 1% and the 99%. Indeed, I suspect that a good chunk of why the lower and middle classes have lagged economically while the top 10% of income earners, and especially the top 1%, have prospered mightily is due to these two forces of foreign competition, and domestic automation. This is recipe for civil unrest, even civil war.

But is there anything we can do about this?

First, I doubt very much we can stop it. The technology genie is out of the bottle, and short of a global catastrophe, I don’t see any way of putting it back. If one country, even America itself, were to start reserving jobs for humans, and banning automation, all that would mean would be that it would become less and less competitive, and lose more and more industries to countries that embraced higher productivity and automation.

So the future will belong to those who can rely on the most human of virtues in the workplace. These include creativity and innovation, teamwork, empathy, excellent customer service, entrepreneurship, clever insights, and unexpected leaps of genius. And, as my friend Malcolm said above, there will be more emphasis on local services, even (or especially) manual labor. Fewer and fewer people will collect a paycheck from an employer. Many more of us will work for ourselves, and be responsible for our own careers and advancement.

I’ve been preaching this particular gospel for more than 20 years, both in my public presentations, in my blogs, and in a column I’ve written for an education magazine, and I believe it more strongly than I did when I hung out my shingle as a futurist and strategic planner in 1989. That doesn’t mean it’s going to be an easy future. Quite the contrary. Anything that’s easy will be done by computer or robot. Humans will do the hard work, involving skull sweat, insight, art, and creativity. We won’t necessarily work as hard physically, but in terms of thought, it will be a much more difficult future.

Ironically, if we can adapt – and above all this means massive changes to our education system – all of this seemly bad news could become amazingly good news. With automation doing the grunt work, and a rising percentage of people doing the things that make us uniquely human, we could face a future that previous generations would never have believed possible – and would have envied.

The key is whether we’re going to flop down in despair, or whether we will choose to rise to the challenge.

© Copyright, IF Research, May 2012.