COVID-19 has forced us all to rethink many aspects of our lives. Job losses, stimulus checks, 0% interest rates and stock market turbulence dominate conversations when avoiding the more morbid topics of death and disease. Most large scale systems are struggling to deal with this pandemic in a coherent way and these struggles offer a rare lens into what we value as a society. As I work longer and longer hours, and fight with a variety of electronic screens to protect my cognitive real estate, I’ve been compelled to analyze the relationship between Work, Education and Value (Productivity).
“Never let a good crisis go waste.” Sometimes the music is not in the notes but in the spaces between them. Taking this pandemic as that silence between the notes, in a series of blog posts I examine deeply the relationship between the 3 pillars of the knowledge economy: Work, Education and Value.
In this post, I talk about why those ‘common’ ideas are not a reflection of reality any more (pandemic notwithstanding). I try to understand reality and where we are headed in the near future if nothing is done about fixing the gap between that reality and the common ideas/assumptions.
In Future of Work: A Vision, I first propose a hypothesis of the crux of the gap problem. And then, based on all of this, I present a vision for the future of work. Most importantly for the reader, in Future of Work: An Individual Perspective I describe a decision framework at the individual level about how to prepare for that future of work and the changing dynamic between Work, Education and Value (Productivity).
The Treadmill (Now)
Technology, decentralization of work, globalization, these forces mean that increasingly most jobs are becoming winner-take-all or winner-take-most competitions.
“Banks and law firms amass extraordinary financial returns, directors and partners within those firms make colossal salaries, and the route to those coveted positions lies through years of round-the-clock work. Securing a place near the top of the income spectrum in such a firm, and remaining in it is a matter of constant struggle and competition”.Ryan Avent: “Why we work so hard?”
Constant competition, a requirement of long work hours for years on end has several other social outcomes. Firstly such competition encourages concentration i.e. such people cluster together. Therefore same relatively high earning people drive up the cost competing for other resources such as real estate, professional services, education etc.
Finally, this forms a feedback loop. The cost to achieve the same lifestyle keeps going up and so does the need to work ever longer hours for increased professional achievement to meet those costs. It is as if you are on a constant hedonic treadmill. This phenomenon has excruciating social outcomes for the individual, something that has formed the fodder for many TV series and movies. (E.g. Suits, Scrubs etc.).
(Notice that the so called 40 hour work week concept is practically irrelevant for knowledge economy workers today). Career trajectories are rapidly changing from linear to exponential for most parts of the economy. As mentioned earlier, while low skilled workers are forced to accept ever smaller pay rises to stay in work, high skilled workers need to work longer and longer to maintain their place in these exponential trajectories. Because that next jump will mean exponentially more for the individual than not fighting for it and staying in the same place.
The pyramid to the top has been a reality since the dawn of human society. However the point I’m trying to make is that the reward gaps in the pyramid are widening. The gap will gradually become unsustainable for those participating in it its lower rungs socially, psychologically and eventually financially (unless they score the exponential jumps up the pyramid). The 2nd point I want to make is that this pyramid is becoming longer, wider and more common in all kinds of industries. We may not realize but almost every knowledge economy job will start or already resembles the set up of competitive sports athletes.
“Future employment opportunities will likely satisfy at most 2 of the following 3 conditions (employment trilemma):
- High Productivity & Wages
- Resistant to Automation
- Potential to absorb large amounts of Labor
Example of (1) ❌, (2) ✅, (3) ✅
To see the dynamic, consider the solar-panel industry. Increased productivity in manufacturing solar panels has caused them to drop in cost, creating a large market for solar panel installers, a job resistant to automation (meets criteria 2 and 3). But that same increased productivity means most of the cost of acquiring solar is the installation labor, limiting wage growth for installers (fails criterion 1).
As another example, consider healthcare. As technology increases the productivity of (or automates) other aspects of care delivery, healthcare jobs will concentrate in non-automatable services requiring few skills besides bedside manner and the willingness to do basic and often unpleasant caregiver tasks.
Example of (1) ✅, (2) ✅, (3) ❌
Consider artisanally-produced goods, whose low productivity is part of their appeal (meets 1 and 2). But the market for them is limited to the small subset of people who can afford to buy them (fails 3).”
I encourage you to read that amazon book review in its entirety. Totally worth every second you will spend reading it.
The Missing Piece of the Puzzle
Jefferson:Hamilton by Lin Manuel Miranda
Uh! Our debts are paid, I’m afraid
Don’t tax the South cuz we got it made in the shade
In Virginia, we plant seeds in the ground
We create. You just wanna move our money around
A civics lesson from a slaver. Hey neighbor
Your debts are paid cuz you don’t pay for labor
“We plant seeds in the South. We create.”
Yeah, keep ranting
We know who’s really doing the planting
So far the discussion has focused on technological disruption, globalization, automation, shifting labor markets etc. as the primary movers causing dynamic changes in the equation between work, education and productivity. But this is not the only reason why general assumptions about this equation are at odds with realities of actual value generation in society.
The other primary reason is a social one.
“What work is valuable to society?” This question has always been answered only by a select group of people who represent only a certain demographic of humanity. Historically that demographic has always been powerful men. (And they haven’t gotten it right enough, ever). (And they have extensive mechanisms to keep the output of that value concentrated with themselves). Most social unrest across the world has originated from groups who did not have a say in this answer trying to fight for one. As automation increasingly catches up with aspects of work and society which were considered “valuable” by only this particular demographic, we are in turn periodically forced to reconsider what the term “valuable” means actually.
For example one such dissonance is in the work that the different genders do. As I argue in my essay on the origins of Wonder Woman:
“The work that women do in shaping the future of humanity (literally by raising children) and safeguarding the health of families has no formal recognition in that ever enigmatic metric of honor, GDP”.Aaksha Meghawat: “The Myth of Wonder Woman”
This is not a plea for more consideration. Creating structural disadvantages for participants of this important aspect of society that moves it forward makes all of us the worse for it. This value creation shows up in other ways. For example, 70% of top male earners in the US have a spouse who stays home. The women in these households are creating value which goes on to create and preserve family legacies but they usually have little ultimate control over the return of that value. Modern economic society has no framework to deal with the value provided to it in rearing nourished, psychologically stable, positively contributing humans. It is probably the reason school teachers earn abysmally low amounts as well.
If we wake up Keynes from his grave today and ask him to imagine a household where both husband and wife are high skilled workers, he would probably describe a scenario hypothesized in Ryan Avent’s essay:
“Each may opt to work 35 hours a week, sharing more of the housework, and ending up with both more money and more leisure.”
“that didn’t happen. Rather, both are now more likely to work 60 hours a week and pay several people to care for the house and children”.Ryan Avent: “Why we work so hard?”
The exponential trajectory nature of knowledge economy jobs has something to do with this. However the artificial social constructs which decide whose labor is valuable and whose is not irrespective of how they benefit society also has a lot to do with it. These artificial constructs are what prevent that “sharing of housework” (and are problematic to say the very least).
“Those most at risk of technological disruption are men in blue-collar jobs, many of whom reject taking less ‘masculine’ roles in fast-growing areas such as health care”.Equipping people to stay ahead of technological change
After a lot of efforts from many people across countries and cultures, the only recognition of the labor needed in raising children is parental leave. Beyond this the so called economic wisdom offers nothing for such an important aspect of society. (That silence or inadequacy is taken over routinely by even more archaic power structures such as Religion who attempt to undermine abortion, Planned Parenthood and other medical organizations, sabotaging efforts offering women more control over this process).
And this is not a new problem. As the fictional rap exchange between Jefferson & Hamilton demonstrates, denying people the true value of their labor and boosting economic metrics has happened time and again. For example consider this short recap of Manumission in the US, capturing how the rise and decline of labor intensive crops directly affected society’s appetite and rules for freeing slaves. This is Goodhart’s law playing out at its worst and it has real damning implications for our lives.
The culmination of all this is a ‘winner-takes-most’ setup. What I talk about next is what this really means for us as a society. (And no, its not a trope on anti-trust laws, capitalism etc. I hope to offer something different, hopefully more useful).