Are We Headed for a Servant Economy?

by on October 20, 2012 · 17 comments

in Business, Education, Government, Politics

Jobs in the US are undergoing a huge transformation. People are being laid off from good paying jobs with benefits, and, to the extent they are finding new ones, they are being paid about half what they were at their previous job with no benefits. Most of the newly created jobs in the “promising” recent jobs report were part time or temporary jobs.

The September Bureau of Labor Statistics (BLS) jobs report indicated that 114,000 jobs were added in September and that the unemployment rate dipped to 7.8%. This is good news to be sure, but the fact remains that the issue is more about the quality of jobs added than the actual number.

Half of all college graduates are not able to find work. The good jobs out there are only for elite students from elite institutions. Half of all graduates including graduates in science and engineering from universities like Harvard and Duke are going to work on Wall Street. This is where the top talent is going, and they’re making big bucks – six figures to start plus signing bonuses. If you are just an average college student though from a run of the mill college, chances are the only job you will find is as a barrista at Starbucks or at the Apple genius bar. The Microsofts, Qualcomms, Googles and Intels are only hiring the top 1% or 2% from elite colleges.

The myth that with a college education you will be able to get a good paying job is being laid to rest. The social contract that, if you work hard, play by the rules and graduate college, there will be a job waiting for you is just a myth. Nowhere in the Constitution does it say anything about guaranteeing college graduates a job. That would be a social contract, and there ain’t no social contract.

The Bureau of Labor Statistics projects that for the top ten fastest growing occupations for the years 2010 – 2020, only two will require a college degree. Four don’t even require a high school diploma! Two require an Associate’s Degree. Jeff Faux in his book, “The Servant Economy,” explains why he believes politicians of both parties working for America’s elite are systematically destroying the economic aspirations and quality of life for America’s middle class.

Jeff Faux: “The future — you walk into an Apple store and you think you’re looking at the future, and you are, but it’s not in the technology. It’s in all of those smart college educated kids with the T-shirts on who are working as retail clerks at $12 an hour or so. Now if you talk to them, they will say, well, I’m just here temporarily.” But they may still be there well into their 30s. That’s what’s happening. When you consider the BLS projections about the jobs of the future, you realize that many of these kids, these 20-something’s thinking that they’re going to be on a professional track, are going to be 30-something’s with dead end jobs well into the future.

The BLS projections give the lie to the much repeated myth that with a college education you will make more over your lifetime than you will with just a high school diploma. Heck, where the jobs really are is for people without even a high school diploma. And the kids coming out of college that can’t find jobs, that is the non-elite kids from non-elite colleges, they are loaded down with student loan debt. They wind up in a dead end job barely able to make their payments to Bank of America and Wells Fargo.

The fact is that corporations are robotizing, computerizing and automating most aspects of most jobs. The kind of work that can’t be robotized is outsourced to sweatshop workers in Asian contries where workers slave away for less than a dollar an hour. This is mostly assembly work. For instance, the Apple iPhone is a sophisticated device most of whose parts are manufactured by robots.

However, they haven’t figured out a way to have robots do the final assembly. So the iPhones are assembled by hand by Foxconn workers in China. These corporations, like Apple, however, are working on robots that will even do this bit of final menial assembly work. At that point they will not even need the sweatshop workers. That is the final goal: a product that can be entirely produced from start to shrink wrap by an automated assembly line without the need for human intervention.

This “hollowing out” of the US economy is nothing new. It didn’t just start with the Great Recession of 2008. This is a trend that has been going on for 30 years or more. The first shot fired was Reagan’s firing of the unionized PATCO workers. The gradual demise of the unions combined with the globalization of the work force has resulted in the reduction of the status of American workers to the point that the middle class is doing a disappearing act. Some economists would argue that, as the work force is becoming more productive, workers should share in those productivity gains. But its not that the work force is becoming more productive, the robots are becoming more productive.

Capital itself in the form of robots is becoming more productive replacing the need for workers altogether. So to the extent that workers are necessary in the production process at all, it’s not that they in and of themselves are becoming more productive. It’s that less human work is required for the same amount of output due to the fact that robots are doing most of the work. In any event the non-unionized work force doesn’t have the power to demand wage increases tied to increases in productivity.

Rana Foroohar in a Time article entitled “More Jobs, Less Pay,” says: “Corporate profits are at record highs… and companies are buying plenty of cool new technology. The problem is that they are using it to replace human workers everywhere, with software eliminating white collar administrative jobs and robots getting Chinese factory gigs. …

“The upshot: while technology is still doing a good job of displacing workers, it’s not creating the kinds of megashifts in productivity and income growth that allow for major increases in standards of living.”

Service sector jobs have by and large replaced manufacturing jobs and temporary and part time jobs have replaced full time jobs with benefits. Most large employers in the service sector manage their workforce as if their workers didn’t depend on their jobs for anything essential like rent or child support. Most Wal-Mart workers are on food stamps. These are great jobs for people who don’t really need them to pay their bills.

In “No Logo,” a book published in 2000 well before the Great Recession, Naomi Klein says: “And so the mall and the superstore have given birth to a ballooning category of joke jobs – the frozen-yogurt jerk, the Orange Julius juicer, the Gap greeter, the Prozac-happy Wal-Mart ‘sales associate’ – that are notoriously unstable, low-paying and overwhelmingly part-time.”

She goes on: “Never mind that the service sector is now filled with workers that have multiple university degrees [and student loan debt], … laid-off nurses and teachers, and down-sized middle managers. Never mind, too, that that the students who do work in retail and fast food – as many of them do – are facing higher tuition costs, less financial assistance from parents and government and more years in school.” Many of these workers who consider their positions temporary, until they can find a real job in their field, end up with a de facto career in a job that doesn’t even require a university degree and at wages that can’t really support a middle class life.

Instead of entering the “servant economy” where job applicants are expected to conduct themselves in a servile manner, those who are able would be better off creating their own jobs instead of expecting that a university degree will be their ticket to a stable long-term, well-paying job. They should, if possible, be their own “job creators” instead of expecting that the so-called job creators, whose only real interest is in reducing the number of jobs and increasing automation and offshoring, will do it for them.

One who creates his or her own job does not necessarily have to be an “entrepreneur,” one who comes up with the next “Big Thing.” There are plenty of self-created jobs in well established fields which require little if any credentialization. For instance, trades such as carpentry, plumbing, electrical work, handyman, gardening/landscaping, these are jobs which one can create for oneself with little capital investment required. Windowcleaning is a profession that doesn’t even require a contractor’s license or any formal training in the state ofCaliforniaand hardly any capital investment. I should know: I’ve been one for 36 years.

And in a country that espouses freedom, one cannot really be free working in a servant economy where in essence one must bow down to your boss or supervisor. That’s not really being free. There is no freedom like being self-employed, and earning your living from multiple sources and a large customer base. That way no one customer has any power over you. No one can order you around. Only then are you truly free, and you can tell the so-called “job creators” to go to hell. It really is exhilarating.

 

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John Lawrence

John Lawrence graduated from Georgia Tech, Stanford and University of California at San Diego. While at UCSD, he was one of the original writer/workers on the San Diego Free Press in the late 1960s. He founded the San Diego Jazz Society in 1984 which had grants from the San Diego Commission for Arts and Culture and presented both local and nationally known jazz artists. His website is Social Choice and Beyond which exemplifies his interest in Economic Democracy. His book is East West Synthesis. He also blogs at Will Blog For Food. He can be reached at j.c.lawrence@cox.net.
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avatar Kathy Geels October 20, 2012 at 1:58 pm

No real insight, just a question: do you think the most important outcome of a college education is to acquire employment which pays well? That is what is suggested by some of the cavalier comments about college grads working retail at Apple stores.

I disagree, but feel that this mentality is the main reason we are experiencing the same inevitable social decline as any other empire in the history of mankind. Collectively, we manage to overlook the necessity of critical thought and education to individual and social well-being.

Not sure this is something that will ever be changed, only observing that your article seems to be addressing the symptom, not the disease. Personally, if I could work at a low-paying job with other educated people that do not emphasize material wealth as the primary measure of success, I would be pleased as punch. Since most people expect to spend a higher percentage of their waking adult hours in the company of co-workers compared to immediate family members, it seems worse fates are possible.

Thanks for raising the topic. Your point is well-taken, I just think the cause and the potential remedies are not as obvious as implied.

avatar John Lawrence October 20, 2012 at 2:50 pm

You say: “Collectively, we manage to overlook the necessity of critical thought and education to individual and social well-being.” Where is the critical thought and education in primary and secondary schools to resist advertising and do one’s own research? The conventional wisdom is that with enough money thrown at TV ads, they can get you to buy anything whether it’s a commercial product or a politician. Primary and secondary education have failed to teach people to think for themselves and resist enculturization into the consumer culture. They’ve also failed to get people to think critically about politicians.

I don’t see that college has done much better even for the ones that have graduated from college. They’re still driven like sheep by TV ads, big time sports, and the celebrity culture.

avatar Kathy Geels October 20, 2012 at 3:20 pm

I don’t think we are disagreeing with each other. I was just observing that even in an article that is ostensibly pointing to a kind of social failure (to protect labor from exploitation), it ignores, in a sense, the bigger social failure of thinking of the end-goal of education as being narrowly defined by material success. Where else could this kind of obtuse, self-limiting goal-setting lead?

The article talks about job replacement by robots…if education were geared towards social good, I think one result would be so much more effort directed at social engineering for the redistribution of wealth to at least bring up the base line quality of life to…life. Versus starvation due to malnutrition and other easily avoidable social ills.

Instead, the author seems to be criticizing Western society for depriving its college graduates of the opportunity to earn enough to buy more big-screen TV’s.

I think I understand the good intentions behind the article, I’m just suggesting that the problem is not automation, and not the exploitation of cheap labor. It’s the pursuit of an end-good through education – material wealth – that leads to nowhere. Not industrialization. There is so much need out there that industrialization could be harnessed to serve, but instead, we direct our energies at harnessing the labor to serve…desire instead. I guess it’s called desire.

It’s human nature, I think. I like shiny things. I buy shiny things, vs. donating my material wealth to the starving children. Just pointing out that the evil is more subtle than automation and industrialization, and the failing is not in rewarding the pursuit of a proper education, the failure might be more appropriately named a failure to properly identify the reward.

avatar Still Poor After All Those Years October 20, 2012 at 4:00 pm

In answer to your question, absolutely! One of most important outcomes of a college degree is finding a job which pays well. I feel this way because, despite having a bachelor’s degree that I worked hard and passionately to obtain, I still have absolutely no way to properly support my family without my spouse.

I wouldn’t feel so strongly if my education hadn’t cost an arm and a leg, or if the cost of living weren’t so high. I have no regrets about attending college and will raise my children to believe in the value of it, but I worked two and three jobs to support myself during that time, and there was not one part of me that expected that to continue after graduation.

That’s not to say that I don’t agree that education has a direct correlation to individual and social well-being. I just wish that it hadn’t come at such a price with so little opportunity for return.

avatar Kathy Geels October 20, 2012 at 4:16 pm

You can take a horse to water but you can’t make him think. If the main collective purpose of a college education is material wealth, it seems logical that education as merely a tool for achieving wealth can be made obsolete, and replaced instead by automation as a more expedient road to that wealth.

If you are willing to orient yourself so completely around the pursuit of wealth, at the expense of other social benefits of education, don’t be surprised the collective thinks and acts exactly the same way, and don’t be surprised when that kind of thinking eventually turns around and bites 95% of the population, so that they now replace education as merely another form of fodder for the pursuit of wealth.

Too bad such a small minority think the most important outcomes of an education have to do with communication, and being able to have reasonable, informed, civilized conversations with other people, and being able to talk intelligently about beautiful things and about how to move forward in solving problems that plague mankind.

Maybe if we felt and acted collectively like those things are important, we wouldn’t be losing our jobs to unfeeling robots. But if making money is widely regarded as the highest pursuit of education, or is considered the best way to spend our time, what separates us from the robots? They don’t need a degree to do a better job.

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avatar John Lawrence October 21, 2012 at 11:50 am

“Too bad such a small minority think the most important outcomes of an education have to do with communication, and being able to have reasonable, informed, civilized conversations with other people, and being able to talk intelligently about beautiful things and about how to move forward in solving problems that plague mankind. ”

I have had more “reasonable, informed and civilized conversations” with non-college graduates than I’ve had with college graduates. It’s sheer snobbery to think that people who haven’t been to college are somehow intellectually inferior to those that have.

As to wealth, most college graduates who go to work for some corporation or government are never going to be wealthy. Consider teachers, for instance. To acquire real wealth you have to go into business for yourself and you don’t need a college degree for that. Take Bill Gates, Larry Ellison or Michael Dell for example.

Most people who go to college such as this man are merely interested in making a living and living a middle class life, not getting wealthy. You can’t blame them for that.

avatar Goatskull October 20, 2012 at 4:52 pm

“and there was not one part of me that expected that to continue after graduation.”

I don’t mean to come off harsh, but that is one mistake so many people make. I’ll never understand why so many people assumed that a degree would automatically mean having a good paying career, especially these days.

avatar Goatskull October 20, 2012 at 4:54 pm

Considering the cost and amount of debt involved, for may people college is simply not worth it. Let’s face it, the future is bleak and I don’t believe it’s going to get better.

avatar Kathy Geels October 20, 2012 at 5:15 pm

History is cyclical, and some place has always been in a state of decline as the quality of life gets better somewhere else, and then roles reverse.

After traveling only a small amount with the military, and doing some work in at-risk neighborhoods, it became clear that my quality of life was much higher than most of the world’s.

To observe the standard for quality of life in the US decline somewhat is not necessary a terrible thing. It’s not that I believe labor should be exploited – on the contrary, I believe labor rights are among the most critical agenda items for humanity.

At the same time, perspective is important. The right to buy more big-screen TV’s is not necessarily something that the rest of the world can relate to. I believe that what the US is experiencing is similar to the effect of water seeking its own level…with a global economy, everything tends towards the middle, and for the US, that means downward.

I certainly understand the frustration and despair of people that are struggling with any kind of debt or unemployment crisis. But I’m not sure it was the greatest idea in the world to have a society built on the values where both parents rush off to work and send their children off to be parented by strangers so the parents meanwhile can buy really nice stuff, including an annual vacation for spending rare “quality time” with each other. Now the situation is much graver, and people are rushing around just to pay the mortgage, but they kind of allowed themselves to be coaxed into that situation, they weren’t necessarily forced at gun-point. We just kept buying and kept needing more and more in order to have and do what everybody around us has and does, and then…we stopped earning as much, but had all these things we no longer seem to be able to do without . Now we are at gun-point.

Well…maybe I’m not making much sense. I guess I’m trying to say that money can’t buy everything. Maybe the imperative to shift our values away from the things money can buy because we are not making as much, collectively, can have some positive outcomes. Like reading more books, or living more simply. Or appreciating the time with people we love more, as the employment becomes more scarce and the world becomes increasingly competitive, hostile, and dangerous.

Please don’t take my comments as lacking in sympathy. Ultimately, I feel like in spite of my economic problems, at least I have clean water and food to eat, and access to public roads and systems in the event of a crisis. A lot of people on this planet are not so fortunate to have been born into similar circumstances. I believe that if we focused on a base level of dignity for everyone, instead of being obsessed about our individual loss of comfort, things might work out a little better in the long run. For me, education is a road to dignity, not just wealth, and for many on earth it is an inconceivable journey, they just die before they get a chance to start.

That is what labor rights are about – they are supposed to focus on uniting for the sake of common welfare. It’s an oversimplification, but the general idea.

avatar John Lawrence October 21, 2012 at 12:05 pm

“I guess I’m trying to say that money can’t buy everything. Maybe the imperative to shift our values away from the things money can buy because we are not making as much, collectively, can have some positive outcomes. Like reading more books, or living more simply. Or appreciating the time with people we love more,”

Couldn’t agree more. I totally agree with your critique of consumer culture. We don’t need all the material possessions that a constant barrage of TV advertising tells us we need.

Still one needs to have some employment whether self-employment or other-employment in order to make a basic living. So many college graduates like “Still Poor” were sold a bill of goods that a basic standard of living would be forthcoming if they went to college, studied hard and played by the rules. Now it’s becoming obvious that that modus operandi was incorrect. I agree that now people have to pick up the pieces, change their mindset and go on from there. Many people’s illusions have turned to disenchantment. But we can learn from our mistakes even if they were foisted on us by our parents or by the larger society in general. It’s never too late to change course.

avatar RB October 20, 2012 at 4:41 pm

Your choice of a college major is more important than your choice of a school for employment. (Better schools may mean better pay, not lower unemployment.) If you are a math major, chemist, engineer, accountant, nurse, etc, you will get a good job. Most of these jobs have never had much union representation.

Here are a few majors with 0% unemployment……if you can handle the math.
http://money.cnn.com/galleries/2012/news/economy/1205/gallery.high-demand-jobs/?iid=EL

avatar Goatskull October 20, 2012 at 5:09 pm

My opinion to the question is yes. My wife and I have made the decision years ago to not have kids and so many of our friends and family members have made the same decision, including friends of our who are educators. I know this sounds extremely pessimistic, but I don’t feel a stitch of hope or optimism for the long term future. Nada. A college education is becoming more and more out of reach for more and more people and for those that are able to get one, the job prospects for anything that would put that degree to use are grim. I know people with Ph.Ds who are on the verge of homelessness. There’s no jobs available that can use their education and they’re too over qualified to get hired for more mundane positions.

avatar Still Poor October 20, 2012 at 6:40 pm

I didn’t start college in “these days.” I started when the economy was robust, and graduated in “these days.” I remember visitors to my senior class who told us we should switch majors if it wasn’t too late. Uh, yeah, it was too late.

The thing is, when I was growing up I was told that I needed to go to college, study whatever I loved and that I’d be fine as long as I put in the time and effort and resumes. The fact of the matter is I should have been encouraged to study in a field for a job that didn’t yet exist; to choose with the future clearly in mind instead of my passion. Instead, I chose journalism – an important skill that is equally as useless when it comes to paying the bills.

When I’m 100 years old and everything turned out all right, I’ll probably have the position that a good paying job was not the most important thing. At least I hope so. Until then, the thinking that it’s all about a healthy well-being isn’t cutting it.

avatar Kathy Geels October 20, 2012 at 6:50 pm

Still Poor, there is nothing I can say to make it better. I am going through my own financial struggles, and I guess I find it soothing to focus on the metaphysical. I guess those jerks that told us life is fair and everything will work out for the best are laughing pretty hard right now. lol. Writing makes me feel better. Having my writing understood sometimes saves my sanity. So maybe things are going better than you think, you just haven’t considered the alternative.

avatar Still Poor October 20, 2012 at 9:24 pm

lol. Well, you’ve given me another perspective, to be sure. It’s just a little hard to see the forest through the trees right now. Thanks for your kind words.

avatar Kathy Geels October 21, 2012 at 8:20 am

@Still Poor, I haven’t been kind enough. But it’s because of my experience, which is that other people’s words don’t help much. For me, accepting my world on different terms than I grew up expecting has been a process, and I feel as if it has been good for my attitude. Everything used to be about keeping up. Now, I can no longer imagine even wanting to keep up. At first I wanted to scream to the world all the time about how something was happening, and could they see what I see (with respect to world problems), but that too was a passing phase, and now I don’t feel an urgency, nor a need to judge. In a way, I guess I feel like I am just where many people are going to be, even if they don’t realize it, only I got here first, and in this moment I am calm, while everybody else is still running. In other moments I am scared. And I don’t think I am alone even in the US, but especially when I imagine the lives of people in other countries born into a lottery of starvation and deprivation. That is how I have come to understand how I have always had so much more than I needed, and how I still do. But – being born into an affluent society was a distraction for me from how much I do have, and I always felt I needed more. Now it feels different, and my comparisons are based on having life or no life, versus having a bigger credit line.

Just sharing my experiences…Now I AM actively working to try and make you feel better, even though I know it’s an internal process that nobody else can force. At the same time, maybe it will make you feel better that somebody does want you to feel better. All I can advise is that you find a way to take your time and enjoy the ride if possible, because it may be the only one you get, and it may not get any better, circumstantially.

avatar Kathy Geels October 21, 2012 at 3:07 pm

Here, this will help better than anything I can say. It’s funny, watch it on youtube

The “producer’s” channel kind of interesting too, so I’m posting a link. But I haven’t investigated yet, so forgive me if it’s a bust:
http://www.youtube.com/user/nigahiga

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