Tag: Degradation of Work

A Return to Full Employment With Mixed Signals: This Time is Different for the World of Employment

SOURCE ITEMS

Chart-Employed Full Time Trend

St. Louis Federal Reserve, Accessed December 13, 2015.

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The Netherlands seems to be undergoing a sort of industrial revolution in reverse, with jobs moving from factories to homes. The Dutch labor market has the highest concentration of part-time and freelance workers in Europe, with nearly 50% of all Dutch workers, and 62% of young workers, engaged in part-time employment – a luxury afforded to them by the country’s relatively high hourly wages.

Sami Mahroum and Elif Bascavusoglu-Moreau, Is Jobless Growth Inevitable? Project Syndicate, March 25, 2015. Accessed December 13, 2015.

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Inequality, exclusion, and duality became more marked in countries where skills were poorly distributed and many services approximated the textbook “ideal” of spot markets. The United States, where many workers are forced to hold multiple jobs in order to make an adequate living, remains the canonical example of this model.

Dani Rodrik, The Evolution of Work, Project Syndicate, December 9, 2015. Accessed December 13, 2015.

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Forced labor permeates supply chains that stretch across the globe, from remote farms in Africa and the seas off Southeast Asia to supermarkets in America and Europe. Almost 21 million people are enslaved for profit worldwide, the UN says, providing $150 billion in illicit revenue every year.

Erik Larson, These Lawyers Want Slave Labor Warnings on Your Cat Food, Bloomberg, December 10, 2015. Accessed December 13, 2015.

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Over all, the Labor Department data painted a picture of an economy that is growing steadily and creating jobs at a healthy pace, even as wage gains remain subdued and many Americans are still stuck on the sidelines of the recovery.

Nelson D. Schwartz, Robust Jobs Report All but Guarantees Fed Will Raise Rates, New York Times, December 4, 2015. Accessed December 13, 2015.

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In reality, the 35-hour workweek has become mostly symbolic, because a multitude of loopholes allow companies to work around the law. French employees work an average of 40.5 hours a week — more than the 40-hour average in the European Union — and have high productivity.

Liz Alderman, Smart Car Standoff Pits Social Progress Against Global Competition, New York Times, December 12, 2015. Accessed December 13, 2015.

COMMENTS

A question emerged after 2008 that unsettled the field of economics and is still unanswered: is this time different? Was the financial crisis of 2008 an economic crisis of a unique kind in the history of capitalism; or was it just a very severe version of a routine kind of economic crisis?

This phrase gained currency from the publication of the book, This Time is Different: Eight Centuries of Financial Folly, by Carmen Reinhart Kenneth Rogoff.[1] They argue that the financial crisis of 2008 is not different. But others disagree.

In a 2012 article, Lawrence King et al make the argument that this time is different because it is the result of a level of financial liberalization and a degree of free market economics that did not exist before the 1970s.[2]

A few of our world’s best and brightest economists expressed their uncertainty and sense that this time is different in this way:

“As a world economic crisis developed in 2008 and lasted longer than most economists predicted, it became increasingly clear that beliefs about macroeconomics and macroeconomic policy needed to be thoroughly examined. … we knew that we had entered a brave new world…”[3]

Different Seems More Likely Than the Same

After 2008 optimism about a return to robust economic growth has been the rule. But actual economic growth has not rewarded that optimism. A few economists have been trying to explain this poor record.

Robert J. Gordon, professor of economics at Northwestern University, recently asserted that “It is time to raise basic questions about the process of economic growth, especially the assumption – nearly universal since Solow’s seminal contributions of the 1950s (Solow 1956) – that economic growth is a continuous process that will persist forever.” He went on to propose that U.S. economic growth may grind to a halt because the kinds of technological innovations that drove rapid U.S. economic growth are not on the horizon.[4]

Professor Gordon was speaking only about the U.S., but the logic would apply to all of the world’s affluent nations.  Moreover, the World Bank and other global institutions have repeatedly warned of below par levels of global economic growth, in some cases for years to come.

Weighing anecdotal evidence, some discernible trends, and expert opinion, it seems reasonable to conclude that this time is different for economic growth.

That means this time is almost certainly different for the world of employment.

A Different World of Employment

In mainstream theories of economic development, the future of work is directly tied to the future of economic growth. Economic growth is the engine that pushes us toward the ever expanding prosperity goals that make for widespread affluence: high profits, high wages, and full employment. When economic growth slows down something has to give in the world of employment.  We are trapped in a long period of slow economic growth, so the employment trends of the past cannot continue.

We can be fairly certain that workers in the U.S. and other affluent nations will not experience the kind of return to full employment with high wage conditions we have known in the past. In the context of global competition and slow economic growth,  the world’s economic and political leaders are pressing hard to cap and reduce wage bills at all levels of employment. We have entered into an era of global degradation of employment.

In affluent nations they  are forcing working people to choose between fewer jobs and fewer hours at higher compensation levels or more jobs and more hours with lower wages and less valuable benefits.  In the rest of the world, where such a choice has seldom existed in any meaningful sense,  global competition and slow economic growth mean an end to the dream of jobs that will deliver better lives.  Everywhere, employment rights and workplace protections are falling away.

What we don’t know quite yet is how the ongoing degradation of the world of employment will play out in national and global politics. At the moment it appears that the world’s political and economic leaders have chosen to promote a free-for-all battle struggle among working people by defining rights to crumbs from the capitalist table using the old reactionary lines of difference – race, ethnicity, gender, religion, and nation. And, at the moment, too many workers in affluent nations are falling into this trap, as shown by the rise of Trumpism in the U.S., the growth of reactionary movements across Europe, and the destruction of governing institutions that embody common interests, and the rise of militaristic movements intent on redrawing national boundaries.

Intentionally engendering antagonisms can’t solve the fundamental problems for global economic growth, so the right wing policies can have only one ultimate outcome – a global catastrophe in multiple forms. Hopefully, this  will become clear to the world’s working people well before such a catastrophe becomes unavoidable.

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[1] Carmen M. Reinhart and Kenneth Rogoff, This Time is Different: Eight Centuries of Financial Folly, Princeton University Press, 2009.

[2] Lawrence King, Michael Kitson, Sue Konzelmann and Frank Wilkinson Making the same mistake again—or is this time different? Cambridge Journal of Economics 2012, 36, 1–15 doi:10.1093/cje/ber045.

[3] From the Preface: Olivier J. Blanchard, David Romer, A. Michael Spence and Joseph E. Stiglitz, In the Wake of the Crisis: Leading Economists Reassess Economic Policy, MIT Press, 2012.

[4] Robert J. Gordon, Is US economic growth over? Faltering innovation confronts the six headwinds, VOX, September 11, 2012. http://www.voxeu.org/article/us-economic-growth-over.

U.S. Jobs Report for October Looks Good, But Economic Forces Are Still Aligned to Degrade Employment And Wages

SOURCE ITEMS

Making matters worse, the return on investment in education is falling, because the economy is growing slowly and changing rapidly, making it difficult for some graduates to secure employment that takes advantage of their knowledge and skills. Universities are often slow to adapt their curricula to the economy’s needs, while new technologies and business models are exacerbating the winner-take-all phenomenon.

Mohamed A. El-Erian, America’s Education Bubble, Project Syndicate, November 9 2015.  Accessed November 9, 2015.

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Chart-Imports from Emerging Markets, 2015

9/11/2015-A further sharp downturn in emerging market economies and world trade has weakened global growth to around 2.9% this year – well below the long-run average – and is a source of uncertainty for near-term prospects, says the OECD.

 Emerging market slowdown and drop in trade clouding global outlook, Organization for Economic Cooperation and Development.  Accessed November 9, 2015.

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The demonstration is significant for two reasons. First, the tasks the robot is being asked to perform aren’t rigidly defined. Instead the robot needs to identify and adapt to a complex situation involving several variables. … But that technology migration is underway, and it will change the way products are manufactured and delivered. … On the robotics front, that means we’re going to see more flexible systems that can switch between tasks on the fly.

Greg Nichols, Why a fruit sorting robot will disrupt industrial automation Adaptable, smart, and cheap. Welcome to the future of automation, ZDNet, November 7, 2015. Accessed November 9, 2015.

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Without human advisers — people are the biggest expense at any securities firm — the new ventures can charge annual fees of 0.5 percent of assets under management or less. That undercuts full-service brokers, which typically charge annual fees of at least 1 percent.

Hugh Son, A Money-Managing Robot Is About to Join BofA’s Thundering Herd, Bloomberg Business, November 6, 2015. Accessed November 9, 2015.

COMMENTS

The old economic narrative that each nation has it’s economic destiny in its own hands is dead. The old economic narrative that a rising tide lifts all boats is dead. The old economic narrative that new jobs in new industries are created faster than automation displaces workers in existing industries is also dead. What this means is that the institutional and policy logics of job creation that served Americans and other western peoples well though the middle of the 20th century are dead.

We must replace those outdated logics with new ones that fit the realities of an Inclusive World Economy in which all destinies are tied together and rights to income can no longer be tied almost exclusively to having a wealth producing job.

Robotics, Artificial Intelligence (AI), and the New Era of Labor Exploitation and Coercion

SOURCE ITEMS

But salaries higher than those offered last year might not be part of the deal. … Gardner said about a third of employers surveyed plan to raise salaries this year, compared with 60 percent to 70 percent before the 2008 recession.

Curt Smith, Job market better for recent grads, MSU survey finds, Lansing State Journal, October 9, 2015. Accessed October 10, 2015.

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By one dismal measure, America is joining the likes of Third World countries. … The number of U.S. residents who are struggling to survive on just $2 a day has more than doubled since 1996, placing 1.5 million households and 3 million children in this desperate economic situation. That’s according to “$2.00 a Day: Living on Almost Nothing in America,” a book from publisher Houghton Mifflin Harcourt that will be released on Sept. 1.

Aimee Picchi, The surging ranks of America’s ultrapoor, CBS News, September 1, 2015. Accessed October 10, 2015.

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There could be between 10,000 and 13,000 victims of slavery in the UK, higher than previous figures, analysis for the Home Office suggests. … Modern slavery victims are said to include women forced into prostitution, “imprisoned” domestic staff and workers in fields, factories and fishing boats.

Slavery levels in UK ‘higher than thought’, BBC News, November 29, 2014. Accessed October 10, 2015.

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Erik Brynjolfsson has a dream of the future. Or perhaps more accurately, a nightmare. … A vision of a world where computers entrench the power of a wealthy elite and push the majority into poverty. … Brynjolfsson is an economist at the Massachusetts Institute of Technology (MIT) and co-author of The Second Machine Age, a book that asks what jobs will be left once software has perfected the art of driving cars, translating speech and other tasks once considered the domain of humans.

Nick Heath, Why AI could destroy more jobs than it creates, and how to save them, TechRepublic, No Date. Accessed October 10, 2015.

COMMENTS

In the distant past, when the worth of a human worker was primarily her/his calorie power (for moving, pushing, pulling, lifting, twisting, and turning materials and equipment used in the production and distribution of wealth), only a very few workers were engaged in highly skilled work and decision-making.   In most of the world of work, one worker could easily replace another (according to one story, a mule was more valuable to a mine owner than a man). Slavery was cost effective, immigrant and seasonal workers and starvation wages were the norm.

In the nearer past, workers in affluent nations had gained substantial economic power as business owners increasingly needed human workers not only as a source of energy but also as a repository of learned production skills (e.g., skill at soldering a resister to a circuit board without leaving an electrical arc point), and as managers, problem solvers (the intelligence to figure out why the assembly line shut down or whether a particular article contained information relevant to a lawsuit) and planners. The nearer past was also a time when much of the world was still not incorporated into nation-states and markets, so capturing more and more of the world’s people as consumers required more and more production and distribution facilities and equipment, which required more and more highly skilled workers and managers.

All of that is going fast. Fossil fuels and solar power (in all its forms) replace human muscle power. Robotic skills replace human skills. AI software and massive computing power combine to make better, faster and more consistent (unbiased by considerations of kin, ethnicity, race, gender, looks, etc.) decisions than human decision-makers.

What is left to give the mere mortal economic importance? Not much.

AI and robotics, in conduction with fossil fuels and solar energy, have dramatically reduced and will continue to reduce the value of working people for the world’s business owners and managers. In the context of global competition, American and European workers are much too costly given the savings achievable through combining AI, robots, and low wage, unskilled workers in the world’s factories and offices. Even the most honorable of business owners and managers must succumb to the competitive pressures – shedding higher wage, skilled workers and escaping regulations and taxes now devoted to protecting employment rights. Wages, benefits, and employment protections must continue to fall in the wealthiest nations and the best of businesses.

Enslavement, indentured servitude, unpaid family labor, and self-exploitation are labor acquisition strategies as old as humanity and there is no reason to believe the less honorable among the world’s owners and managers will not directly and indirectly take advantage of these strategies. Studies are already finding that these things are on the rise. There is no reason to believe the business owners and managers who are fair to their own workers will stop closing their eyes to the exploitation and coercion of working people practiced by the other owners and managers with whom they do business. Relying on the cheapest sources of components and raw materials must be part of the competitive strategy of every business owner and manager, including the most honorable.

The Broken Capitalist World Economy and the Future of Good Jobs

SOURCE ITEMS

But things are changing. Longer-term shifts—such as declining middle-class jobs, a continued fallout from the global financial crisis, but also a shrinking global workforce—are shaping labor markets worldwide. Whereas the problem today seems to be a glut of workers, in coming years the global labor force will shrink. These shifts could constrain growth, but they should also help correct some of the current labor market imbalances that have prevented workers from sharing in productivity gains. The beneficiaries, however, will mainly be high-skilled workers. The prospects for lower-skilled workers are less hopeful, which is bad news not only for them, but for efforts to reduce inequality.

Ekkehard Ernst, The Shrinking Middle, Finance & Development, International Monetary Fund, March 2015, Vol. 52, No. 1. Accessed September 19, 2015.

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“It has become clear that we are really dealing with a different kind of economic recovery than anyone has experienced since World War II,” says Mr. Hammond, chief executive officer of Hammond Power Solutions Inc., a Guelph, Ont. company that makes electrical transformers for industrial clients around the world. … “This is far different from any recession I have seen.” … Seven years after Europe and the United States slipped into what would become the one of the deepest global recessions in history, and five and a half years since the North American economy returned to growth, the recovery remains a perplexing, inconsistent and frustratingly elusive work in progress.

David Parkinson, Richard Blackwell and Iain Marlow, The 7-year slump: Why the global economy can’t seem to get started. The Globe and Mail, January 23, 2015. Accessed September 19, 2015.

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Many have characterized the U.S. economy’s inability to grow robustly as an expected after- effect of a severe cyclical downturn. Such interpretation is well past its sell-by date. It’s time to recognize that globalization has brought with it issues that defy cyclical economic prescriptions.

Daniel Alpert, Why the US economy can’t seem to shake off the Great Recession, BusinessInsiDer.com, May 21, 2015.

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Climate change threatens to provoke a new ecological panic. So far, poor people in Africa and the Middle East have borne the brunt of the suffering. … Climate change has also brought uncertainties about food supply back to the center of great power politics. China today, like Germany before the war, is an industrial power incapable of feeding its population from its own territory, and is thus dependent on unpredictable international markets.

Timothy Snyder, The Next Genocide, New York Times, Sept. 12, 2015. Accessed September 19, 2015.

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Together with his team of designers and engineers, Dutch artist and innovator Daan Roosegaarde is working on a prototype of a Smog Free Tower, that would create a clean air zone outside. … This smog solver is meant to move to other major cities too. So everyone can get acquainted with it. This way, Roosegaarde wants to bring NGO’s, concerned citizens and designers together in smog-free bubbles, to work on healthy cities around the globe.

Daan Roosegaarde’s clean air zones, Rotterdam City Blog, July 28, 2015. Accessed September 19, 2015.

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The paper contends that we have already crossed four “planetary boundaries.” They are the extinction rate; deforestation; the level of carbon dioxide in the atmosphere; and the flow of nitrogen and phosphorous (used on land as fertilizer) into the ocean.

Joel Achenbach, Scientists: Human activity has pushed Earth beyond four of nine ‘planetary boundaries’, Washington Post, January 15, 2015. Accessed on August 27, 2015.

COMMENTS

An abundance of good jobs is one of the core features of societal prosperity and it is an article of faith for most of the peoples in affluent societies that capitalism is the engine of growing prosperity.

However, it is quite clear to almost everyone that global capitalism is malfunctioning. Economists who write for the media and journalists who cover economic matters routinely refer to the fact that the world economy has still not recovered from the financial traumas of 2008 and that global employment trends are not good one.

There is much more to the problems afflicting the world economy than a cyclical downturn and poor national policy choices. The world economy has entered an era of declining wealth accumulation that is irreversible. Without increasing prosperity, the world economy will not be able to generate the growing stock of good jobs for the world’s working people.

The few good jobs the world economy has to offer are found almost exclusively in the affluent cities and nations in the world economy. And even in those affluent areas very large proportions of workers are consigned to jobs that pay low wages and benefits, expose them to health risks, and offer no employment security.

The reason is straight forward: good jobs are expensive to create and maintain. Not only do good jobs garner premium wages and benefits, they also require high cost work environments (expensive machines, high volumes of consumable supplies, expenditures on training and workplace safety), and expensive public and private oversight and enforcement activities. Thus, for the world economy to continue to produce and maintain good jobs, the wealth of the world’s people must continue to grow. But, it can’t.  The world economy has hit a wealth production wall.

We typically use the word ‘wealth” to refer to human made goods and services, yet we know, at least intuitively, that such things as the oxygen rich air we breath and zones of moderate temperature that support agriculture are forms of wealth that nature produces. What we have yet to fully acknowledge is that these two worlds of wealth creation are inextricably interconnected.

The capitalist world economy is the human part of an inclusive world economy that includes nature’s wealth production processes. The human world economy is a massive economic machine that takes forms of wealth produced by nature and converts them into different forms of wealth – the goods and services that define affluent society. In so doing, the capitalist world economy extracts and uses flows of energy and stocks of living and non-living resources that nature would otherwise use in its own production processes.

As a totality, this inclusive world economy of humans and nature is a single economic system. The only real input is the energy from the sun (discounting the miniscule meteorite contributions to the mass of the earth). We can process one form of wealth (say soil and water) into another form of wealth (crops), but we cannot make net additions to the earth’s total store of wealth.

The point here is that the human part of the inclusive world economy grows at the expense of the natural part. Conversely, the natural part expands at the expense of the human part (in the forms of rust, rot, and natural disasters). Human economies have always used nature, just as all living things do, but the capitalist world economy is the first human economy to press against the fixed stock and regenerative limits of the entire earth. This is a crucial and overlooked reason the human world economy is trapped in dysfunction.

The capitalist world economy grew and thrived on an earth where yet another pristine forest, yet another stock of game fish, yet another unspoiled river, yet another abundance of fertile land, yet another source of cheap labor, was just an explorer and a military conquest away. It was an era in which yet another technological innovation would solve a problem and increase human wealth. That was the era in which some parts of the world became extraordinarily affluent and good jobs were created.

Fossil fueled industrialization was the driving force in that period. It provided the means for accelerating the diversion nature’s supply of energy and resources into human economic activities and it provided the means by which certain parts of Europe and North America incorporated the rest of the world into the world economy, primarily as suppliers of labor and resources and more often than not through economic and military coercion. Affluent European, North American, and allied nations became more affluent and good jobs became abundant and set the standard for the world’s people.

That limitless earth disappeared over the course of the 20th century. The era of global geopolitical economic incorporation of “foreign” lands and peoples has come to an end. It is no longer possible for human wealth to increase as it did in the past. Thus, it is no longer possible to add to the stock of good jobs in the world economy and maintain them all.

The scale of the human world economy is now so enormous that the costs for maintaining human wealth are demanding an increasing proportion of the productive capacity of the world economy.

First, the scale of damage done to nature’s wealth production by the human world economy has become enormous and keeps growing, so more and more of our human economic activities must be devoted to repairing the damages and compensating for the damages we can’t yet repair (industrial cleaning of air and water because nature’s regenerative capacity has been overwhelmed). Second, the massive stock of human wealth (including people – human capital) that we have accumulated over the last several centuries gets older every day and, as we well know, with age comes deterioration and death. A large and growing proportion of human economic activity must now be devoted to maintaining this large stock of wealth and to replacing those items of wealth that are lost to rust, rot, and irreparable damage.

As the world’s population continues to grow and the world’s rulers continue to invest in massive urban infrastructures, the energy and resource conflicts between the human and natural parts of the inclusive world economy will increase. Our technologies will not save us because they were and continue to be designed to divert evermore energy and resources from nature’s wealth production processes. Nature will prevail and force an irreversible decline in human wealth and a loss of good jobs as that happens.

The world’s leaders continue to talk about restoring global economic growth and moving more and more of the world’s people into good jobs, but the actual trends in both parts of the inclusive world economy expose this as empty rhetoric. The leaders of affluent nations have already begun to dismantle the stock of good jobs available to their peoples and most people in the poor areas of the world know they have almost no chance of ever working at a good job.

The kind of affluence and the configurations of good jobs the peoples of the west became comfortable with in the 20th century can no longer be offered to the rest of the world; nor can they be retained for the majority of people in the now affluent nations. We must invent a new definition of affluence and a new kind of good job for a new kind of world. We won’t do that until the world’s economists and policy leaders acknowledge that the world has hit the ceiling on net wealth growth and incorporate this knowledge into economic and policy theory.

The Slow-Growth World Economy and the Degradation of Formal Wage Employment

SOURCE ITEMS

“We think of the ‘new neutral’ as a natural evolution from the ‘new normal’,” Executive Vice President Richard Clarida said in a telephone interview, likening the firm’s new outlook to a car stuck in neutral gear. “The ‘new neutral’ looking forward is a story about a global economy that isn’t recovering, it’s a global economy that’s converging to trend rates of growth that will be sluggish.”

Mary Childs, Pimco’s ‘New Normal’ Thesis Morphs Into ‘New Neutral’, Bloomberg, May 13, 2014.

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What is new – and distressing – is that developing economies’ low-productivity segments are not shrinking; on the contrary, in many cases, they are expanding.

Dani Rodrik, The Growing Divide Within Developing Economies, Project Syndicate, APR 11, 2014.

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Formal employment creation in Colombia is taxed with social security contributions and payroll taxes that equal roughly 60% of the base salary for each worker.

Domingo Cavallo and Rodrigo Botero, Proposal – Incentives to Formal Employment: A Proposal for Colombia, Global Economic Symposium 2014.

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But if you’re not self-motivated, this world will be a challenge because the walls, ceilings and floors that protected people are also disappearing.

Thomas Friedman, It’s a 401(k) World, New York Times, April 30, 2013.

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America’s shadow economy includes activities that are actually illicit — prostitution and drug dealing — and more benign jobs like working construction for a day for cash, or even the $2 a kid that Kalmes gets for walking neighborhood children to the bus. Added together, economists estimate $2 trillion could be involved.

Joshua Zumbrun, Shadow Economy Shows Joblessness Less Than Meets U.S. Eye, Bloomberg, March 20, 2013.

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A study for the Small Business Administration, a government body, found that regulations in general add $10,585 in costs per employee.

Over-regulated America, The Economist, Feb 18th 2012.

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Informal employment in Californian construction has increased by 400 percent since 1972. The ranks of the informal swell with each economic recession, but most recently a larger share of workers have stayed in the informal sector because formal sector jobs have not been recovered. Four years after the end of the Great Recession, the industry has recovered only 66 percent of the jobs lost in the formal sector. –

Yvonne Yen Liu, Daniel Flaming, Patrick Burns, Sinking Underground: The Growing Informal Economy in California Construction, Economic Roundtable, September 2014.

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The result has been a downsizing of expectations. By almost two to one — 64 percent to 33 percent — Americans say the U.S. no longer offers everyone an equal chance to get ahead, according to the latest Bloomberg National Poll. The lack of faith is especially pronounced among those making less than $50,000 a year, with close to three-quarters in the Dec. 6-9 survey saying the economy is unfair.

Rich Miller and Michelle Jamrisko, Americans on Wrong Side of Pay Gap Run Out of Means to Cope, Bloomberg.com, By December 30, 2013.

COMMENTS

The legitimacy of a formal wage employment system for working people comes from an implicit guarantee that workers get a fair share of national income. This guarantee is necessarily implicit because to make it explicit would require imposing substantial constraints and costs on the owners and managers of business enterprises. Public policy would have to define the primary and overriding obligation of the private sector to be providing employment or income to all working people in place of the existing mandate to provide maximum income to investors.

In most of the world’s low wealth political jurisdictions, opposition to creating and strengthening formal wage employment systems is generally very strong, especially among the rich and powerful of those jurisdictions.   Both the rich and a majority of workers in those jurisdictions understand that their profits and jobs can be quickly eliminated in a world economy in which businesses and workers in other jurisdictions will underbid them if given the opportunity.

In the post World War II decades, the rich and powerful in the world’s affluent nations were less often actively opposed to high cost formal wage employment systems, preferring the cost of accommodation to the cost of ruthless government suppression of conflict.

This accommodative stance has been disappearing as economic globalization has dramatically increased the competition for resources and markets faced by owners and investors in wealthier jurisdictions like the U.S. In recent decades, the accommodative stances common to business communities across the affluent nations of the world have been replaced with aggressive political campaigns to substantially reduce the high costs of the formal wage employment systems. Working people in the world’s affluent nations have lost benefits, suffered wage reductions, lost union organization protections, lost funding for government agencies charged with monitoring workplace conditions and labor market practices, and become more exposed to exploitative and unsafe working conditions.

Working people have been nudged into and forced into less desirable forms of employment (including informal sector employment, family employment, self-employment in petty trades, coerced employment, and employment in illegal activities). In a reversal of trends a few decades ago, formal wage employment now accounts for a declining share of total employment.

This trend is likely to continue because global ecological and institutional conditions impose a structural ceiling on the global rate of growth. As a result, global competition will intensify and national economic policy efforts to restore high rates of economic growth will fail much more often than they succeed. Adopting accommodative relationships with working people will not reemerge as an option for even the most successful of the world’s businesses.

Formal wage employment standards will continue to deteriorate because the world’s business owners and investors will put more pressure on governments to cut tax revenues and weaken labor market and workplace regulations as they fight for global market shares. Working people in various places will attempt to resist but will mostly lose these battles because they are, at heart, global political battles in which owners and investors have a massive advantage.

At the moment, the world’s working people are fragmented and disorganized, both across and within nations. Despite global business competition, the world’s owners and investors are much better organized into a global political force. They fund large transnational organizations to develop and pursue shared goals (e.g., more trade, easier money, lower costs) to a far greater extent than do the world’s working communities.

In the long run, this could change, but not unless the world’s working people find ways to politically checkmate the world’s owners and investors. That may or may not happen. What is certain is that the future of work is up for grabs.

(For a perspective on the slowdown in global economic growth see my article, Replacing the Concept of Externalities to Analyze Constraints on Global Economic Growth and Move Toward a New Economic Paradigm.)