Analysis: The future of work - I

By SAM VAKNIN, UPI Senior Business Correspondent

A U.S. Department of Labor report published, aptly, on Labor Day 1999, summed up the conventional wisdom regarding the future of this all-pervasive pastime we call "work."

Agriculture will stabilize, service sector jobs will mushroom, employment in the manufacturing sector will be squeezed by "just in time" inventory and production systems and by labor-intensive imports. An ageing population and life-prolonging medicines will prop up the healthcare sector.


Yet, the much-touted growth in services may partly be a statistical illusion. As manufacturing firms and households contracted out -- or outsourced -- hitherto internal functions, their employment shrank while boosting the job figures of their suppliers. From claims and wage processing to take-away restaurants and daycare centers, this shift from self-reliance to core competencies spawned off a thriving service sector. This trend was further enhanced by the integration of women in the workforce.

The landscape of future work will be shaped by technological change and globalization. The latter is erroneously considered to be the outcome of the former. But as "The Economist" has pointed out in a series of "School Briefs," the world was much more globalized one hundred years ago, long before the Internet.


These two independent trends reinforce each other in a virtuous cycle, which will profoundly impact the future of work. Enhanced flows of information increase market efficiency, partly through global competition and price transparency and partly through shorter product life cycles.

But innovation by itself would not have had such an impact on work patterns. Manufacturing techniques -- chiefly miniaturization -- had a profound effect on the relocation of work from factory and office to home and car. Machine tools and office equipment well into the 1980's were too cumbersome to install at home.

Today everyone has a telephone and many have a fax, a mobile phone, an Internet connection, and a PC. As a result, work-from-home and flextime are burgeoning. Increasingly, with the advent of Internet-enabled PDA's, laptops, beepers, and wireless access to e-mail and the Web, so is work-on-the-move: in cars, in trains, everywhere. Work has become ubiquitous.

This harks back to the past. Even at the end of the 19th century, at the height of the Industrial Revolution, more than half the population still worked from home. Farmers, medical doctors, blacksmiths, small time retailers -- lived and slogged in combined business and domestic units. A steady career in an organization is a recent invention, as William Bridges pointed out in his book "Job Shift".


Harlan Cleveland and Garry Jacobs explained the emergence of Organization Man in the newsletter of the World Academy of Art and Science: "The job--the kind that you had, or hoped to get--became a central fixture of life in industrial countries. Its importance was great because it served many needs. For managers and efficiency experts, job assignments were the key to assembly line manufacturing. For union organizers, jobs protected the rights of workers. For political reformers, standardized civil service positions were the essence of good government. Jobs provided an identity to immigrants and recently urbanized farm workers. They provided a sense of security for individuals and an organizing principle for society."

Currently, three types of work are surfacing. Old, industrial-age, permanent, and workplace-bound jobs are increasingly the preserve of low and medium skilled workers -- about 80 percent of the workforce in Britain. New, itinerant, ad-hoc, home-based, technology-intensive, brand-orientated, assignment-centered careers characterize another tenth of the workforce. Temporary and contract work -- mainly in services -- accounts for the rest. It is a trichotomous landscape, which supplanted the homogeneous labor universe of only two decades ago.

Nowadays, technologically literate workers -- highly skilled, adaptable, well educated, and amenable to nontraditional work environments -- are sought by employers and rewarded. The low skilled, computer-illiterate, uneducated, and conservative lag behind.


In 1999, more than 13 million people in the United States alone held multiple jobs, or part time, or contract jobs (i.e., freelancing). Work from home and flextime accounted for one fifth of all other employees. Contrary to their image as rigid labor marketplaces, self-employment and temporary work were more prevalent in the European Union (except Britain) than in the U.S.

The Bureau of Labor statistics in the U.S. Department of Labor noted these demographic changes to the workforce. Though pertaining to the USA, they are applicable, in varying degrees, to the rest of the world, with the exception of certain parts of Africa. America is a harbinger of trends in employment and of changes in the nature of work.

1. Labor force growth will slow down to an annual 0.2 percent after 2015, compared to 2.6 percent between 1970-1980 and 1 percent during the last decade. This is when Baby Boomers start retiring and women's participation will level off. Women already make almost half the labor force. More than three quarters of all mothers are working. The propensity to hold a job is strongest among single mothers.

2. The median age of the labor force will reach a historically unprecedented 41 years in 2008 - compared to 35 in 1978. As middle management layers are made redundant by technology and as start-ups mature - experienced executives will be in great demand and short supply. Even retirees are being recalled as advisors, or managers of special projects. This, coupled with a dramatic increase in functional life expectancy, may well erode the very concept of retirement. The Urban Institute predicted, for ABC News, that, as Generation X, Generation Y, and young immigrants enter the workforce, it will be polarized between the under-25's and the over-45's.


3. Labor force growth is strongest among immigrants and minorities. In the U.S., they will make up more than a quarter of the total workforce in 2008. Those with higher education and those devoid even of a high school diploma are over-represented among recent immigrants.

4. College graduates already earn twice as much -- and their earnings are still growing in real terms -- as people with a high school diploma whose inflation-adjusted earnings are dwindling. High school dropouts are four times as likely to be unemployed as college graduates. These disparities are going to be further exacerbated. On the job training allows people to catch up.

5. Five of the ten fastest growing occupations are computer-related and three are connected to healthcare. Yet, contrary to hype, half of the new jobs created by 2008 will still be in traditional, labor-intensive, sectors such as retail or trucking. One in two jobs -- and two in three new ones -- are in small companies, with less than 100 workers. Even behemoths, like General Motors, now resemble networks of small, autonomous, businesses and profit and loss centers.

6. Much hectoring and preaching notwithstanding, the burden of wage-related taxes and benefits in the USA is heavy, at one half the base salary, though it has held stable at this level since 1970.


7. The shift from defined benefit to defined contribution retirement plans continues apace. This enhances labor mobility, as workers are able to "carry" their personal plans with them to new employers. Still, the looming social security crisis is far from resolved. In 1960, there were 5 workers per beneficiary. By 2060, there will be less than two. Moreover, close to a third of all beneficiaries will be the relatives of retired or deceased workers, rather than the pensioners themselves. This is likely to create severe social tensions between workers and beneficiaries.

8. Job tenure has decreased markedly in all age groups over the last two decades -- but only among men. Both boom and bust contributed. Economic growth encourages job-hunting, job hopping, and job-shopping. Recessions foster downsizing and bankruptcies. Jobs are mainly obtained through nimble networking. This is especially true at the higher rungs of the income ladder. Still, the median figure for job stability hasn't changed much since 1983 in both the U.S. and the UK. Moreover, some jobs -- and employment in some states -- are far more stable than others.

Transformation across all professions took place among workers younger than 32 and workers with long tenure. The job stability of the former decreased markedly. By the age of 32 they had already worked for 9 different firms, according to figures published by "The Economist". The job security of the latter has vanished as firms, until less than 2 years ago, succumbed to a "youth cult" and inanely rid themselves of precious social and professional capital. Another phenomenon is the emergence of a Hollywood-like star system among ultra-skilled workers, both technical and executive. Many of them act as freelancers and get paid with a mixture of cash and equity. They regard themselves as a brand and engage in brand marketing on a global scale. The more capable they are of managing organizational change, leading teams, and identifying business opportunities, the more rewarded they are, according to a study by Timothy Bresnahan, published in the June 1999 issue of the "Economic Journal".


9. About 3 percent of the workforce are employed through temporary help agencies. This is 6 times the figure in 1983. Public prejudices aside, even engineers and system analysts work as "temps". Many people prefer Mac-jobs, freelancing, or temporary assignments. It allows them to preserve their independence and free lifestyle. More than 90 percent of all Americans are happily ensconced in their jobs.

10. Work gradually encroaches on family life and leisure time. In 1969, couples aged 25-54 toiled a combined 56 hours a week. By 2000, they were spending 67 hours at work -- or 70 hours if they were childless. This increasing absence has probably contributed to the disintegration of the nuclear family, the emergence of alternative family systems, and the loosening of community ties.

Part 2 of this analysis will appear Friday.

(Send your comments to: [email protected])

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