July 10, 2012 · 0 Comments
By Steven Vallas:
It’s an old debate, actually –think back to the 1950s, when a burgeoning literature emerged on the employment effect of automation. Or, think about fictitious portrayals such as Kurt Vonnegut’s Player Piano, which provided a dystopian image of a corporate-dominated society in which paid employment was virtually obsolete. More recently, we’ve seen books by such well-known scholars as Stanley Aronowitz, Jeremy Rifkin, Andre Gorz, and Ulrich Beck, among others, all adopting the Cassandra-like cry: Bid Farewell to Work!
Now, as discussed in Thomas Edsall’s provocative op-ed piece in today’s New York Times, a new generation of economists (many centered up here in the Boston/Cambridge area) has provided new cause for concern. Two MIT economists — Erik Brynjolfsson and Andrew McAfee—have been tracking structural changes in the economy, documenting some worrisome trends: the ratio of employed people to the working-age population has been declining steadily and precipitously since the 1990s. Corporate profits, though they moderated during the great recession, have recovered nicely (this is especially true of financial profits), even as demand for labor has either fallen or stagnated. The image, then, is one of a growing and even buoyant economy whose material benefits are limited to the ranks of the highly affluent – an economy and society, in other words, that can grow without need for people in anything resembling middle class or middle-income jobs.
Here is a graphic (use control-+ to enlarge it, or see the Edsall op ed piece) that documents something of the Brynjolfsson-McAfee analysis (click here for their blog). As you’ll see, the red trend line represents the employment/working age population. The green lines represent different forms of corporate investment and profits. The black line in the middle of the graph shows the trend of GDP. In line with the dystopian narrative outlined above, the data suggest a free-fall in demand for labor, even as the economy has weathered the turbulent downturn.
Graphic via The New York Times
Is this a presentiment of a real structural trend? Were the earlier Cassandras wrong, but only temporarily so? Do the disastrous labor market experiences we here about college graduating classes show us the future of a middle class in permanent decline? If the answers are all affirmative, then the material stakes are obvious. How shall people find their livelihoods in the near term future? In organizational terms, the question must be raised as to such structural trends affect the balance of power within the firm (as those who remain employed become ever more aware of their precarious situation). The cultural stakes are more subtle, but equally real. How can a society founded on paid employment –what Ulrich Beck, borrowing from Sebastian de Grazia, has called “the work society”—adjust to a world in which paid employment is available to a smaller and smaller proportion of the population? Questions abound –and answers, like jobs, are in remarkably short supply.