Shaping the Future of Work

A Handbook for Action and a New Social Contract

Thomas Kochan, Lee Dyer

• Editorial: Routledge
• Año: 2020
• ISBN:
  9781000206760
• Edición: 1
• Categoría: Betriebswirtschaft
• Categoría: Personalmanagement

This book provides a clear roadmap for the roles workers and leaders in business, labor, education, and government must play in building a new social contract for all to prosper. It is a call to action for a collaborative effort to develop both high-quality jobs and strong, successful businesses while simultaneously overcoming the deep social and economic divisions that are all too apparent in society today.

Written by two leading and trusted experts in the field of employment and work from MIT and Cornell University, this book is a practical, action-oriented guide. Readers will feel empowered to take actions needed to shape a better future of work for themselves, their employees, their co-workers, and others they may represent. It emphasizes the need to fix America's broken social contract and reimagine a new one. The most important message of this book is that we have the ability to shape the work of the future by harnessing the power of new technologies.

The book is essential reading for business executives, labor leaders and workforce advocates, government policy makers, politicians, and anyone who is interested in using emerging knowledge and technologies to drive innovation, creating high-quality jobs, and shaping a more broadly shared prosperity.

1

America's Challenge and Opportunity: Building a New Social Contract at Work

We live in a time of great challenges and great opportunities for shaping the future of work. Although the challenges and the associated fears and frustrations of some people dominate the headlines and social media, in this book we will focus on how to meet these challenges and take advantage of the opportunities in front of us.

The challenges are twofold. First, we live in a world divided by political extremism and social divisions that pose threats to the future of our democracies. The 2016 U.S. presidential election and its aftermath, votes in the UK to exit the European Union, and growing support for extremist candidates in Europe and South America have exposed the deep-seated frustrations, anger, and worries of those who feel left behind by recent economic forces. In the United States, these pressures have been building for several decades, fueled by rising income inequality, flat wages, and the loss of good jobs and job opportunities for the people and regions most deeply affected by globalization. For years, a majority of Americans have said that the country was going in the wrong direction and that they fear the next generation will have a lower standard of living than they experienced growing up.¹

Second, many workers now worry that robots, artificial intelligence systems, and associated technologies threaten their jobs and those of their children. This anxiety is greatest among workers who have seen their communities devastated by the loss of good manufacturing jobs and among those who feel that the benefits of new technologies are accruing to the elites of Silicon Valley and other islands of innovation.

This angst may come as a surprise to many who see the future through very different eyes. For example, we both work in great universities where new scientific discoveries, technological breakthroughs, and organizational innovations are constantly being announced and turned into new products, services, and opportunities. We interact with business leaders who are eager to enhance their global competitiveness and hungry to attract the scarce talent needed to make this happen. And we teach students who are eager to put new technologies to work to solve the world's big problems and who expect to build successful, rewarding careers. From these perspectives, it is easy to focus more on future prospects than on the problems looming for the future.

These two world views emanate from observing the same set of forces, mainly globalization and advancing technology. But are these forces outside our control? We don't think so—unless, of course, we do nothing to address the underlying challenges or, worse, make a futile attempt to turn back the clock. Instead, we propose a different path, one in which all sectors of society are mobilized to work together to use advances in technology to create competitive enterprises, high-quality jobs, and rising wages and opportunities—while also healing the wounds that divide us. In what follows, we will outline the steps needed to build what we call a New Social Contract at Work, one that is based on mutual respect and is attuned to the needs of today's and tomorrow's economies and workforces. To whet your appetite for our basic argument concerning the root causes of today's divide, let's illustrate it with two examples that show just how out of step our employment policies and institutions are with the realities of today's workforce and world of work.

The key reason for the challenges the workforces of today and tomorrow face is that the rapid pace of change in globalization, technology, and demographics has outpaced many of the public policies, business strategies, and organizational practices that were designed in an earlier era to govern work, pay, and employment relations. Closing this gap by updating these policies, strategies, and practices is essential to building an economy and world of work where all can prosper.

The first example is that most of the labor and employment legislation in the United States date back to the New Deal of the 1930s. The flurry of action during that time was a direct response to the Great Depression and a belated response to the shift from an agricultural to an industrial economy. Not surprisingly, given work and family patterns at that time, the framers of this legislation and the workplace practices that followed had a model of the typical worker in mind. That worker was a male production employee who worked full time, possibly even for his entire career, in a large domestic firm under close managerial supervision. Conveniently, he had a wife at home to attend to family and community responsibilities.

Today, in contrast, we have an economy that is driven by knowledge and that values innovation. The workforce is diverse. Nearly as many women as men are working in the paid labor force. People can expect to move across employers multiple times in their careers and in and out of full-time and part-time work so they can attend school and/or take care of family responsibilities. It is not even always clear who the employer is, given the advent of franchise, contractor, and outsourcing arrangements. Yet most of our laws and the regulations and procedures used to enforce them still reflect the earlier era. The United States is, for example, the only large industrial economy that still lacks a national policy on paid family leave. This is just one in a range of policy innovations and/or updates that we need, not just to catch up with the rest of the world but also to meet the basic needs of our knowledge-driven economy and diverse labor force.

A second example illustrates how unhelpful existing labor law and institutions are for addressing the unrest below the surface in many workplaces today. On November 1, 2018, an estimated 20,000 professional employees from multiple locations in Google's worldwide operations staged a walkout triggered by a report that the company had awarded several top male executives accused of sexual misconduct multimillion-dollar severance packages. The protesting employees presented Google executives with the following demands: 1) end forced arbitration of claims involving harassment or discrimination; 2) commit to ending inequalities in pay and promotional opportunities; 3) issue a publicly disclosed sexual harassment transparency report; 4) develop a clear, uniform, and globally inclusive process for reporting sexual misconduct safely and anonymously; 5) promote the company's chief diversity officer so that she or he reports directly to the CEO and has the ability to make recommendations directly to the board of directors; and 6) appoint an employee representative to the corporate board of directors. The actions of these employees, at least in the United States, were unprotected by labor laws for several reasons. Some of them were managers whom the legislation does not cover, some of their demands were outside the scope of topics that management is required to negotiate with employees, and many were contract workers who were probably the responsibility of some employer other than Google.

This was an unprecedented action—perhaps the first large-scale cross-national protest of non-union professionals against a high-tech firm. Google management responded to one of the demands: It announced that it would make the use of arbitration voluntary rather than obligatory in settling harassment and discrimination disputes. Whether management will meet any of the other demands remains to be seen. Employee groups within Google continue to actively discuss and organize around these issues via various social media forums, which means that the concerns are not likely to go away any time soon.

This collective action at Google is a reaction to what our research shows is a significant “voice gap” in American workplaces. Later in this book we will present data from a national survey showing that a majority of the U.S. workforce has less influence than they believe they should have with respect to a wide variety of workplace issues, including compensation and benefits, respect for workers, training, and input into how new technologies will affect their work. The walkout at Google is only one among many manifestations of this gap. Clearly, U.S. labor laws and avenues for workforce representation need updating. How the country will respond to fill these voice gaps is likely to be a key topic of debate in the years ahead. This issue will feature prominently in later chapters of this book.

So let's get started, first by painting a quick picture of the challenges and opportunities facing the workforce today, with a special eye toward young people who are beginning their careers.

A two-dimensional jobs crisis

The first decade of the twenty-first century earned the sad title of the “lost decade.” Workers in nearly all occupations and at all but the highest income levels lost ground in two respects: the quantity of jobs and the quality of jobs. As shown in Figure 1.1, it has taken a full decade since the start of the so-called Great Recession of 2007–2009 to close the jobs gap—the number of jobs needed to restore those that were lost plus the number needed to account for labor force growth. The U.S. labor market and those in many countries around the world finally began rebounding with strong and steady job growth in 2015. The tightening job market is indeed good news for most Americans (even as it poses greater challenges to employers in filling vacancies). But the recovery has left several groups still at risk. For example, the long-term unemployment rate (i.e., the percentage of workers who are out of work for more than six months) hovers around 20 percent. This is high by historical standards.

Figure 1.1Jobs gap since the great recession: November 2007 to July 2017.

Young workers also continue to lag behind. As late as 2014, 46 percent of college graduates were not finding jobs that would enable them to use the knowledge and skills they learned in college.² They are what we call underemployed. They are working in low-wage retail, restaurant, or other service sector jobs that don't require a college degree, don't put their skills to work or provide opportunities for further learning and development, and don't pay enough for them to make payments on their college loans, let alone invest in starting a family or consider buying a home. To make things worse, a significant body of research indicates that the imprint of starting a career in these conditions lasts for a long time—in some cases, a person's entire working life.

Young students in our online course have had some first-hand experience with this. One coined a name for it: “working nomads.”

I think the concept of working is dramatically changing in my generation ([born in the] 80s and younger), and the change couldn't [be] understood by [an] older generation. We want to work at a stable organization, but [those] jobs are vanishing so [we] have to work as an unpaid intern or part-time worker…. “Working nomads” are a growing tendency of today's working trends, I think…. So does this trend entirely change our job structure or [is it] just a temporary trend? I'm not sure, but we should focus on this tendency [in order] to understand our generation and today's world.

Another group that has been very badly hurt by recent job trends consists of those who have lost good-paying jobs in manufacturing, especially if they live in the communities hardest hit by globalization and technological change (e.g., in America's so-called Rust Belt). The United States has lost one-third of its manufacturing jobs since the 1970s. Communities hit hardest by this decline have experienced long-lasting drops in income and a large number of workers affected have experienced long-term unemployment. Many of these workers have dropped out of the labor force altogether. Those lucky enough to have found new jobs have experienced average incomes some 15 to 20 percent lower than what they had been earning.

The political and social ramifications of this decline in good manufacturing jobs are startling. In a series of papers, David Autor and colleagues have shown that those areas most affected by job loss to imports experience increased reliance on government payments for unemployment and disability benefits, lower rates of marriage and fertility, and a drift from supporting moderate to supporting more extremist political candidates in congressional and presidential elections.³

Figures 1.2 through 1.4 tell the story of the second dimension of the jobs crisis: the stagnant and (in some cases) declining real wages of American workers and the overall decline in labor's share of national income. Figure 1.2 shows how production and nonsupervisory workers' earnings have essentially flatlined since the early 1970s. According to the Economic Policy Institute, over the course of those years the productivity of American workers grew by 77 percent while their wages and benefits grew by only about 12 percent.

Figure 1.2Productivity and wage growth, 1947–2018.

Figure 1.3 demonstrates that for the last thirty years, wage stagnation (or worse) has been a problem for all education groups except those with advanced college degrees. Those who have a high school diploma or less education have borne the brunt of the blow; their real wages actually declined during this time.

Figure 1.3Cumulative change in real weekly earnings for adults aged 18–64, 1963–2017.

Figure 1.4Cumulative growth in average income, by income group, 1979–2016.

Where did all the fruits of increased productivity go in the last 30 years? Figure 1.4 tells this well-known story. Most of the income growth went to the top-earning 25 percent, and especially to the top-earning 1 percent, of the population. The Occupy movement (young people who protested in 2012 that too much of the nation's income was concentrated in the top 1 percent of the population) had its facts right. America is now suffering from the highest level of income inequality of any time since the 1920s.⁴

Figure 1.5 provides an even more vivid picture of how labor's share of national income has shifted over time. After holding steady for most of the latter half of the twentieth century, labor's income share dropped precipitously from 64 percent in 2000 to about 58 percent in 2016.

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Índice

• COVER
• HALF TITLE
• SERIES
• TITLE
• COPYRIGHT
• CONTENTS
• LIST OF FIGURES
• LIST OF BOXES
• PREFACE
• ACKNOWLEDGMENTS
• 1 AMERICA'S CHALLENGE AND OPPORTUNITY: BUILDING A NEW SOCIAL CONTRACT AT WORK
• 2 WHAT WAS THE POSTWAR SOCIAL CONTRACT, WHERE DID IT COME FROM, AND WHAT MADE IT WORK FOR THREE DECADES?
• 3 THE DEMISE OF THE OLD SOCIAL CONTRACT AND THE CHALLENGES AND OPPORTUNITIES THAT LIE AHEAD
• 4 HOW BUSINESS LEADERS CAN CONTRIBUTE TO A NEW SOCIAL CONTRACT
• 5 MARRIED FOR LIFE: WORKERS AND EDUCATORS
• 6 HOW LABOR CAN CONTRIBUTE TO A NEW SOCIAL CONTRACT
• 7 HOW GOVERNMENT LEADERS CAN CONTRIBUTE TO A NEW SOCIAL CONTRACT
• 8 A CALL TO ACTION
• COVID-19 POSTSCRIPT
• INDEX