Work's End: A Talk With Futurist Jeremy Rifkin

The current economic debate over the future of jobs has developed into a predictably sterile polarization: those who want to protect existing jobs vs. those who want to "grow" new jobs. Neither position recognizes that technology may be displacing work itself. Futurist and economist Jeremy Rifkin, author of The End of Work, is among those who have looked unblinkingly into the maw of the jobless future, foreseeing that what will be required is not simply an 8-point program, but the reconstitution of society and work as a whole. His remarks below are excerpted from an interview conducted recently on a public affairs program.The thesis of The End of Work is that we are in the midst of a fundamental transformation in the very nature of work itself. We are moving out of the Industrial Age over the next three to five decades and into the Information Age. Sophisticated computers, telecommunications and robotic technologies are already replacing entire job categories. So if you are a file clerk or a secretary, a receptionist or a bank teller, if you are garden-variety middle management, if you are in wholesale or retail, if you are on the factory floor, your job may be headed to extinction.The best example I can use here by way of analogy is the tremendous shift from the agriculture to the industrial revolution. If you go back just 100 years ago in this country, a majority of our American workers were still on the farm. Today, less than 2 percent of our workers are on the farm directly engaged in farming. We have very sophisticated technologies producing more output than we can even consume. Now we are seeing a comparable technology revolution sweep through the manufacturing sector in the U.S. and in every other country. And, to the surprise of economists, the same technology revolution is also deeply penetrating the service arena. Ten years from now, 12 percent of our workforce will be on the factory floor, we'll still be the No. 1 manufacturing power in the world. And by the year 2020, we're going to see the virtual elimination of the blue-collar assembly line factory worker from the pages of history all over the world. It is true that in the Industrial Age when one sector mechanized, a new sector would emerge to absorb the displaced mass workforce. Today, we have a different reality. Many economists still hold to the assumption that displaced factory workers can be retrained and will find jobs in the service arena. Yet, the service industries are automating as fast as manufacturing, in finance, in insurance and banking, in wholesale, in retail. These large service companies are deconstructing. They are flattening the old corporate pyramid. They are eliminating layer after layer of management and infrastructure. The goal is to be small and what they call virtual companies: small entrepreneurial elite, a core professional staff and then, a just-in-time workforce.KNOWLEDGE IS WORK Now, it is true that there is a new sector emerging: the knowledge sector. It is the essential employment sector of the Information Age economy. And it is made up of the professionals, the consultants, the engineers, the highly trained technicians and the computer programmers. But even if you could retrain the whole American workforce for the knowledge sector jobs which are opening up, there will never be enough jobs in the knowledge sector to absorb the millions of people let go in traditional blue- and white-collar industrial sectors.By its nature, the knowledge sector is elite, not mass labor. Its small, highly conceptual workforce is joined together with increasingly sophisticated intelligent machines and automated technology. You'll need the best engineers, the best architects, the best accountants, the best lawyers, but you won't need garden variety [workers], because more and more intelligent software will take up the traditional technical and professional work.The Industrial Age is based on mass human labor to produce goods and services. The Information Age is based on the use of small, elite, highly conceptual workforces combined with increasingly sophisticated automated technologies and intelligent software to process goods and services. That is both the opportunity and the problem. ...Let's look at biotech, because this is an example of an industry created whole cloth, an industry that did not exist 15 years ago. It's a classic example of creating new jobs in the Information Age. But how many new jobs has this industry created? About 90,000-plus. AT&T [just] announced they were laying off permanently 77,000 workers. And two years ago, Sears announced they were knocking off 50,000 workers in one stroke. So you would have to create a new science and a new technology comparable to the biotech industry every month, and you still couldn't keep up with any particular company that was dislocating its employees.The Industrial Age replaced physical labor. The Information Age replaces much of mental labor. What I believe we are going to see is the emergence of new jobs, small but important new jobs for conceptual work--highly skilled conceptual work. On the other end, we are going to see more and more dead-end jobs at the lowest level of the service ladder. In this sense, we are going to see a new servant class. The upper-middle class, the knowledge sector, will need their nannies and their house attendants, and their personal shoppers and people to attend to their needs and desires.So what we are losing is the great middle, the kind of industrial jobs that provided a middle and working class in this country with solid incomes and predictable economic futures. That's what is leaving. And in place, we have a smaller and smaller upper-middle class and a larger and larger working class and underclass. And that's happening in every country. ...... You know, people say to me, Well isn't this a grim future you are painting? My answer is that it doesn't have to be; that we are on the cusp of a technology revolution now that can free us from toil in the marketplace. We've always believed that labor-saving technologies would free us for more leisure, not more unemployment lines. Now, I think the real question here that hasn't been raised is twofold: What do you do with the millions of people in every country who will be needed less or not at all in an increasingly automated global economy? How do we begin a discussion in every country on how best to share the vast productivity gains of this new technology revolution so it benefits the greatest numbers of our people and not just the small corporate elite and stockholders? If we could begin to wrestle with these two challenging questions, we may be able to turn this around from a grim future to a renaissance and a transformation for our society and for our children's generation in the coming century. ...... The business people understand that they are going to need fewer and fewer employees as they become more and more successful. But let me share with you their concern; it's just emerging in the last few months. While it seems to make sense from the bottom line to reduce the workforce, re-engineer the company and replace a large number of the workers with the technology on the macro level, all of the companies realize they are beginning to lose purchasing power. They are letting so many people go, or are marginalizing them with dead-end jobs or low-wage increases--there is not enough purchasing power out in the country now to empty the inventory. That's why the Christmas retail season was a dead zero. It was a disaster. This very poor economic recovery was kept going by credit card purchases and now even that is gone, because people are at the limit of their credit. And so this is one of the two Achilles' heels of this Information Age: There has to be someone out there to buy your product. So there's a dawning awareness of that.There is another Achilles' heel which is equally as interesting from the businessperson's point of view. Most businesses would rather have a smaller workforce at time-and-a-half than a larger workforce that they have to pay a benefits package to. And so they especially don't want to pay health and pension funds. So they really want to move from permanent to a just-in-time workforce, but when they eliminate the pension fund to save money, they eliminate the chief source of capital for the capitalist system for investment. Pension funds--the workers' deferred savings--are worth $5 trillion dollars and they control 30 percent of the stock market and 40 percent of the bond market, and they are worth more than all of the assets in the U.S. banking system.So as you let your workers go because you don't want to pay their pension funds, or you place them in part-time contingent work, you slowly drain the capitalist system of the new investment dollars it needs to move it into the investment age. Combine that with loss of purchasing power as you let people go, and you [have] prescriptions for an economy grinding to a halt. These two Achilles' heels--loss of purchasing power and loss of pension fund investment--are much more impressive factors to the economic health of the economy than all of the discussion here in Washington of balancing budgets and deficits.DAWN OF A NEW ERA My hope here is that this dawning awareness of the problems in terms of loss of purchasing power and investment capital will push management to come to the table and begin to rethink the social contract with the American workforce. If they don't start sharing the productivity gains in a way that makes sense for the employer and the workforce, everyone loses.I'm working with two or three of the largest unions on some of these issues. But the response has not been overwhelming. There is talk about a new labor movement in this country with the election of Mr. Sweeney as head of the AFL-CIO, yet they really need to rethink their whole mission. And this is what I have been saying in The End of Work. I think that the rallying cry for labor ought to be to share the productivity gains in the Information Age and that means a 30-hour workweek in the next 10 years. If you look at the history of organized labor in this country, every major stride forward for labor has been based on the demand for a shorter workweek. Not pay, but a shorter workweek. When we abandoned that goal after World War II labor began its decline. We have a tremendous potential in this country for working people to rally and say look, we want to take part in the great productivity gains of this technology revolution. Technology was supposed to free us for leisure, not unemployment lines. You know, in the Industrial Age, the mark of success was a shorter and shorter workweek and better pay and benefits. Why should we expect anything less of the Information Age?For working parents, it would be a godsend. Children are growing up unsupervised because Mom and Dad both have to work to make a living. And when the politicians say restore family values, the only way to do that [is for] Mom and Dad to spend some time with their kids. But they both have to work. I think the formula ought to be six and six. Work six hours when your kids are in school, come home when they come home. That's the way to restore the American family. The key question is, how do you make it work for employers? How do you say to employers, we want you to gradually reduce your workweek to 30 hours and still keep paying benefits high? They'll say we can't be competitive. What I say to them in my business seminars is, yes you can, I can prove it to you in five minutes.Hewlett-Packard, Grenoble France and BMW in Germany--big companies--they took their workforce from a five- to a four-day workweek. They still pay them for five days of work. Now, the logic says they couldn't do that and be competitive. The reason they were able to do it is they arranged for a quid pro quo with the workforce. They said, "Look, if you are willing to work shifts, the technology is so productive that if we could operate this technology 24 hours a day, seven days a week, week in and week out, we can triple productivity and pay you more for less work." They have a new social agreement at Hewlett-Packard, France and at BMW in Germany, and everyone is making money. ...... It means a transition period that we have to continue to see the workweek go down in hours as productivity of the new technology releases human labor. We could go down to 25- or 20- or 15-hour workweeks. For those who think that is far-fetched I remind them that in the Industrial Age in this century, we went from 70- to a 40-hour workweek. And we increased pay and benefits in almost half the workweek. So the idea that we could go from a 40 to a 20 in the next century is very doable if we were smart enough to begin thinking seriously on how to share these productivity gains and provide the appropriate incentives to employers so they can be competitive and so that the workforce can have some job security. Even at a shorter workweek, though, we still have to come to grips with the fact that we're not going to need millions of people in the marketplace when it's automated. ...... So what I have suggested is that we have to rethink politics. We normally think that the marketplace provides or the government becomes the employer of last resort. Neither is likely to fill the vacuum in the Information Age. The marketplace is automating and the government is retreating as an employer of last resort because of deficits and debts. There is, however, a third arena that could potentially absorb the work of the next generation and this generation. And that's the civil society.Rather than being optimistic or pessimistic, I think we have to be realistic and understand the challenges are enormous; they are daunting. But on the other hand, human beings make their own future. So we ought to set out a vision of the way we'd like our society to be, where we would like to head for our children and then get on with the business of having a national discussion and begin the process and seeing how we can share these gains in a way that works for everyone. So I think we need a vision, but we also have to be ready and prepared to doggedly pursue it.

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