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Tuesday, July 22, 2014

On the Future of Work

Posted by on Tue, Jul 22, 2014 at 2:42 PM

By now, most of us have heard about the 2010 study by software technology company Intuit, which holds that 40 percent of our workforce will be contingent, i.e. freelance, contract, self-employed, temp, etc., by 2020, and that traditional, full-time, full-benefit jobs will be harder to find. It's not hard to see that trend developing, whether it's Lyft and Uber offering tacos and bonuses in lieu of actual benefits; the rise of services like Elance, Fiver, Leapforce, and Taskrabbit (among many, many others); or the current contractor changes at Microsoft.

From the letter a contractor wrote to Brendan after last week's shakeup:

What's fascinating to me, in a very macabre way, is that many of my young co-workers don't know that there are actually jobs that provide good benefits. They have never experienced that so far and that says a great deal about what it's like to work in the US now.

People will say "why don't you get another job?" If only it were that easy. I'm in my mid-50s, MBA, 30+ years of international business experience and I can't find a decent job anywhere. I attribute this in part to very real ageism but I'll leave that for another day. The bottom line is that good-paying jobs are not plentiful any longer. The trend in business (especially in the tech world) is toward the use of contractors and paying them significantly less than they would a full-time employee. And they get away with it. It's truly a race to the bottom.

The trend raises several questions when we take just the briefest look under the hood. What happens when a significant percentage of our workforce becomes a demographic of independent agents who don't have legal backing from the companies they contract with, access to quality healthcare, no equity, and no safety net beyond the tatters of what was once available to them? What is the role of government regulation here? Will we see the return of collective bargaining, which business and globalization have spent the last few decades stamping out? Rand Paul blithely thinks technology will solve all of our problems, at least when he's standing in front of young and eager technology workers. What do you think?


Comments (26) RSS

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I think we need a new model for privately held businesses. The only way I see us proles ever getting a fair shake and something resembling a stable job is by creating employee-owned businesses, where the financial thinking is not overwhelmingly tilted towards maximizing profits for a limited number of owners or for a large group of third-party investors. In the meantime, as I'm fond of saying, we're screwed.
Posted by screed on July 22, 2014 at 3:02 PM · Report this
Fnarf 2
The most obvious part of the answer is that tying together two completely unrelated things -- work and health care -- has to go. It's absurd to make health care dependent on having a job with good benefits, and as those jobs disappear it's even more absurd. Good luck making it happen, though -- Obamacare, which is about a tenth of the way down the road to rationality, was hard enough -- and would have been impossible without a small window of Democratic control of House, Senate, and Presidency.

People can also use their personal choices to help preserve better jobs. Right now, young people with oodles of disposable income (at least for now) are voting with their fancy smartphones for things that expressly destroy the social contract -- things like Lyft and Uber that benefit the few but are unavailable to people without that income, leaving them stranded. Money needs to be poured back into the common good instead -- into transit, for instance, which is a social good that benefits everyone.
Posted by Fnarf on July 22, 2014 at 3:07 PM · Report this
Reverse Polarity 3
I'm increasingly worried that not only are good jobs with benefits in steady decline, but Social Security is under increasing attack from republicans who want to privatize it. You youngsters may not worry much about retirement now, but you will in 30 years. The next generation will be well and truly fucked if we dismantle Social Security AND have no jobs with benefits. Nobody saves for retirement when they're living paycheck to paycheck.
Posted by Reverse Polarity on July 22, 2014 at 3:15 PM · Report this
Sean Kinney 4
What Fnarf said. That and the brief period when the social contract was a palpable rationale for national domestic policy is a romantic memory (and romanticized).

Austerity & war. That's what we got.
Posted by Sean Kinney http:// on July 22, 2014 at 3:24 PM · Report this
Will in Seattle 5
The main thing is ending tax exemptions for companies that don't provide benefits, as they drive up the costs for society while providing no net benefit.

All tax exemptions and exclusions.

Makes the choice simple.
Posted by Will in Seattle on July 22, 2014 at 3:32 PM · Report this
ditto Fnarf and Reverse P.

Hopefully the recent Hobby Lobby decision puts a little wind back in the sails of decoupling health care from employment, but unless the repugs in the House take a good whacking in Nov I don't think it's enough for now.
Posted by gnossos on July 22, 2014 at 3:32 PM · Report this
keshmeshi 7
I'm not sure how this applies to contract work specifically, but countries that actually take labor protections seriously have a maximum allowable amount of time someone can be hired as a temp, typically six months. This is distinct from our shitty system which allows people to be employed as "temps" for many years.
Posted by keshmeshi on July 22, 2014 at 3:37 PM · Report this
care bear 8
Whoo path dependence!
Posted by care bear on July 22, 2014 at 3:58 PM · Report this
care bear 9
@7 There's a balance to be struck with labor market protections. If you go too far in the other direction you hurt productivity. And when it's more expensive to hire and fire, firms are more reluctant to hire in and coming out of recessions. Not to say that our system is better, but you wouldn't want to end up like Spain or Portugal.
Posted by care bear on July 22, 2014 at 4:20 PM · Report this
seandr 10
Optimistically, the disappearance of healthcare as a job benefit may put us closer to implementing universal health care.

Retirement benefits disappeared decades ago. I've never had a job with a pension, and I don't know anyone my age who has. No fucking idea what that will mean, but it can't be good.
Posted by seandr on July 22, 2014 at 4:34 PM · Report this
I am 32 years old and have never held a job with significant benefits. I can confirm that my generation doesn't believe they exist. Only pampered baby-boomers get "real" benefits.

I had a job that began offering health benefits after ACA went into effect, but the cost of that health plan's payroll deduction was HIGHER than what my insurance marketplace individual plan would have cost, after subsidy.
Posted by Lack Thereof on July 22, 2014 at 4:40 PM · Report this
I recently came to the conclusion that I won't ever experience retirement. Germany introduced the concept in 1889 as life expectancy started to outpace productivity. Since my kids will be spending every penny I make until well past the point where I am no longer productive, I'm assuming the only option left will be for me to be put into some kind of matrix-esque life support pod until I "achieve" total organ failure. This realization has brought me a great deal of metaphysical peace.
Posted by Niloc Yessirb on July 22, 2014 at 4:54 PM · Report this
Of course we're not going to see the return of collective bargaining, because there won't be a collective. Contracts with individuals are just that: they don't involve anyone else but the company and the individual, so the company can do whatever it wishes with/to that individual.

Health care should be separate, and if Obamacare doesn't get completely legalized out by the various courts, it will be. If your employer doesn't provide it, you join a federal or state exchange. That's under fire now, of course, with two appeals courts issuing opposite decisions. If the Supremes get hold of that issue, god help us.

In the meantime, there will be no vacations, family leave, or any other benefit for contractors.
Posted by sarah70 on July 22, 2014 at 5:06 PM · Report this
keshmeshi 14

Germany has those kinds of protections for temp workers. I don't think anyone is going to argue that Germany is not productive and competitive.
Posted by keshmeshi on July 22, 2014 at 5:13 PM · Report this
@14, Germany is in Europe. America does not pay any attention to Europe because we are a country that is completely unlike any other country on earth, and must not pollute our culture or economy with old ideas.
Posted by sarah70 on July 22, 2014 at 5:20 PM · Report this
My experience as a v- contractor over the past 18 months has been very different from what this guy wrote. I am very frustrated with the lack of permanent jobs in my field, and contracting is not my ideal situation, but at Microsoft I got a far better deal than I have at other large companies where I was contracted. My wage is well higher than market rate and I felt fully compensated for the lack of benefits. I have fully subsidized health insurance from my agency and pretty good 401K matching. No paid vacation, but I was paid well enough that I could afford unpaid leave. I was not exhausted like this guy and didn't find the environment very stressful.

I totally believe this guy when he describes this experience - just saying that it wasn't like that for me (or the other vendors on my team, which had only one FTE).
Posted by karinaq on July 22, 2014 at 5:35 PM · Report this
Grant Brissey, Emeritus 17
@13: Individuals can still group together to form unions and then collectively bargain. The development of contingency-based employment does not change that.
Posted by Grant Brissey, Emeritus on July 22, 2014 at 5:38 PM · Report this
I'm with #16 on this one, at least regarding MS, specifically. I'm thrilled anytime I can pick up a contract there. But I see the general point about being forced to contract.
Posted by patbareb on July 22, 2014 at 6:25 PM · Report this

What benefits are there that a person cannot acquire for himself outside his job?

Affordable healthcare is provided by ACA and it's better with on/off work if your healthcare is low cost and not tied to employment.

Savings? Same with 401ks. Better to use an IRA that isn't tied to a single employer so you can float around.

The most important thing for employment in the New Economy is low costs.

Here is where Cities, especially Seattle, fail. If you can get a $500 mortgage in Canton, OH and work between all the industrial companies in the suburbs, you can easily float for years.

Not so if your rent is a crushing $3000. You're locked into a system that will coddle you until it spits you out.
Posted by Supreme Ruler Of The Universe http://_ on July 22, 2014 at 6:31 PM · Report this
@20: wtf is your deal with Canton?
Posted by diorist on July 22, 2014 at 6:42 PM · Report this
@20, maybe I'm slow, but I can't really follow your reasoning. From my perspective it sounds like you are advocating a very fragile and nimble existence where individuals flit about often and take advantages of the loop-holes that society creates. Color me skeptical when it comes to considering that a reasonable model for society.
Posted by bradl on July 22, 2014 at 7:12 PM · Report this
Fnarf 23
@22, "I can't really follow your reasoning" perfectly describes the reaction of everyone to Bailo's posts.
Posted by Fnarf on July 22, 2014 at 7:33 PM · Report this
The Freelancer's Union was heavily advertised on NYC subways when I lived there. Not sure if it 'hit' Seattle but it might be one model for what you are talking about.

The changes in benefits and retirement matters mostly in terms of overall compensation. I don't think a 401k match is inherently worse than a pension, if overall compensation stays the same. The problem is when these benefits get lost and wages don't go up to compensate.

This is somewhat tangential but i think financial literacy (I favor the Mr. Money Mustache variety) would make a huge difference to a lot of Americans, especially those who can no longer rely on employers to take care of them and make the decisions. I have a small business, which I think is essentially what these contractors have, tax-wise, and I set up a solo-401k where I can make matching 'employer' contributions as well as regular employee ones. Saves me a ton on taxes, but I would bet most don't know they can do this. Also deducts from my overall income, allowing me to qualify for subsidized health insurance thanks to the ACA.

I am a huge supporter of a social safety net but think that a real solution has to include a sort of financial saviness to replace idiotic blind consumerism, I.e. people throwing away the bulk of their meager paychecks because they don't know any better (and I've been there myself). Hope that this rant was not too off topic...
Posted by Jude Fawley on July 22, 2014 at 7:38 PM · Report this
Ernie1 25
@1 when I worked for an employee owned company my observation was that people are pretty risk-adverse and conservative on average and with relatively small groups of "owners" it's hard to make much happen.

Try upgrading computers or other mundane overhead expenditures when the people controlling the budget feel that it is "their" money. Gridlock is the likely result.
Posted by Ernie1 on July 22, 2014 at 10:35 PM · Report this
@25 takes this all with a grain of salt because I've never worked for an employee-owned business but... There is more than one way to structure business' management. The framework you described fits with a popular conception - that decision-making at employee-owned businesses is through a consensus/communal process. Instead you could have a conventional hierarchical management structure but where management doesn't answer to Wall Street investors or to the financial needs of a limited number of owners. I was recently talking with a cashier at WinCo, which is an employee-owned company, and she said that when she retires in a few years the amount of 'shares' she's earned over her time at WinCo will cover her retirement, no problem. This is just one observation/example, I have no idea how WinCo works or if other employees are as satisfied as she seemed to be. But to me it is nonetheless suggestive of a more sane way to go about providing jobs and livelihoods in our economy.
Posted by screed on July 23, 2014 at 10:00 AM · Report this
@20 There are plenty of benefits that a person can get from an employer that he/she cannot get individually.

I have a defined-benefits pension as a result of having worked for the same (state) employer for 25+ years. I'll retire at an amount that is predictable year after year for the rest of my life, including occasional cost-of-living adjustments. The state will also pay half of my health care costs every year between my retirement age and 65, when my Medicare kicks in.

People in the private sector who have 401 k plans very often get an employer match, effectively doubling the amount saved: if the employee puts in 5%, the employer puts in another 5% (for example) resulting in a 10% contribution. Hard to get that if you're self-employed. Sure, you can put in 10%, but it's you and yourself, not you and your employer.

Some companies pay full health care, or at least they pay half. Some offer dental and eye care. Some offer tuition assistance with college students. Some will match contributions to favored charities. Many offer paid vacation and sick days (again--hard to do if you're self-employed).

A lot of people dream of being self employed or entrepreneurs. Me--I've always liked the security that comes from being part of a larger entity.
Posted by Clayton on July 23, 2014 at 1:30 PM · Report this

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