Rethinking the Future of Work #1
In which we cap rewards and do some decoupling
Let’s kick off another series (check out the previous one on the science and experience of being introverted.) In this series, we’ll take a critical look at work, specifically at work in a typical 9-to-5 office job, which is increasingly the norm for most people.
Disclaimer: I have a 'traditional' day job. At the same time, I am (very) skeptical about some aspects of modern office culture. Those are not mutually exclusive.
Capped rewards
I've been thinking a little bit about 'capped rewards' in traditional jobs. In salaried jobs, employees can only receive capped rewards. What do I mean by that?
You sign a contract and trade your time for money at a set rate, regardless of whether you do the bare minimum or pour your heart and soul into it. "But," you might say, "what about a raise or promotion? Surely that's a reward for good work?" Yes and no.
Yes, excelling at your job might land you a raise or promotion. That, however, will never be a one-to-one correlation.
No, despite what we might (want to) think, other things matter more for raises/promotions. One close to my little heart: extroversion correlates with 'promotability' more than skill or effort.
So, where do we find the potential for minimally capped rewards? (As in a reward with the potential to be more commensurate to effort/skill.)
Jobs that include commission. Sales, etc.
Freelancing. While you might have a set rate, in an ideal situation, you'll have more say on how much you work/how many clients you work for (of course, in the real world, most freelancers struggle. Finding clients, taxes, admin, etc.)
Owning a business. (Networking will be a big facilitator, so there is more involved than effort and skill.)
Probably other things I haven’t thought of. Elite athlete in a high-paying sport? A-list celebrity (thought that’s freelancing, I suppose)? Let me know in the comments.
Of course, this all assumes that you work for a reward beyond paying rent and food. It’s simply part of the game, those capped rewards. Companies gonna company, and it’s a lot more manageable to have salary grades and caps.
There is one big, glaring problem with this: the great decoupling
The great decoupling
Our time is worth less and less. Literally.
This is known as the great decoupling. A decade or so ago, economists came across something very odd. After WWII, productivity (measured via GDP) and wages rose hand-in-hand. That's good.
But, for most Western countries, this changed in the 1980s. Productivity (aka GDP per capita) kept going up. Wages, however, stagnated. Because GDP keeps going up, life becomes more expensive. And salaries don't keep up - even with inflation adjustments.
That figure might look like a jumble, but here’s the important part: the dotted lines rise faster than the solid lines of the corresponding color. Or, the GDP produced per hour of work goes up while salaries even out.
In the words of economist Erik Brynjolfsson, who named the phenomenon with Andrew McAfee in their book The Second Machine Age:
Productivity has continued to grow steeply and innovation has been strong, but median income and employment have stagnated.
Your time - $/hr - is *literally* worth less. Profits do not trickle down to the salaries of the people generating those profits.
Some people blame technology for replacing (parts of) jobs. I don't think that's necessarily the key driver (disclaimer: I'm not an economist). Let’s say technology is contributing more and more to several different types of jobs. We - the human part of the equation - are still supposed to work the same number of hours for a full-time salary. So, technological gains in productivity are added on top of human productivity. Not a valid excuse for the decoupling, in other words. The only consistent options are either to couple salaries back to overall productivity, or to reimagine what amounts to full-time employment. There are trials on shorter work weeks and work days. In short:
While it’s easy to understand the effects of a shorter week on worker wellbeing, the positive effects on company earnings and productivity may be more of a surprise – but research backs this up.
The current 40-hour full-time equivalent was born in Henry Ford’s factories around 1914. Maybe it’s time to move on.
In any case, the great decoupling is not so much a problem in terms of the generation of profits (which has its own issues, but that's for another day), but about the distribution of those profits. Since those pesky 1980s, wage inequality has been growing in Wester countries. Most of the profits are distributed among an increasingly smaller group of people.
Time is your most precious non-renewable resource; treat it accordingly.