The Future of Work, but first a History

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 briefly tour history to understand how common ideas about Work, Education & Value (Productivity) became ‘common’.

In Future of Work, but first Now and the Near Future 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 Common Idea

We have been raised with the idea that Education will make “better” Work accessible to us. Our Education is a means to an end. This is not a judgement on the nature of education. It is an observation, almost an unstated fact. A crude blueprint of this system which happens to be in most people’s minds is:

“Our Education is a means to an end.”

Let me unpack that statement a little bit.

The “Means” need to transform us into a “productive” entity as defined by a Keynesian economic idea of “valuable”. 

The “End” is a realization of this “productivity” in terms of some form of “value”. 

“Value” is usually a combination of money and a lifestyle.

This idea did not just randomly take birth in society. It has very interesting origins which hold grave implications for the future and what we value as society. Prior to these ideas, most of the older generation passed on specialized knowledge to the younger generation via the system of apprenticeships.

The “means to an end” approach for education is an approximation of the commonly understood relation between Education, Work and Productivity (Value). However, in real life the relation between these 3 aspects is not at all obvious or clear. This common understanding of the relationship is often inconsistent with the rapidly changing needs of society, often structurally disadvantageous to some forms of real value generation/productivity over others.

So before jumping to a hypothesis of the future, I want to give you a brief tour of the origin of this idea.

History of Work: A Brief Tour

After most societies of the world had been sufficiently robbed of their ‘Produce’ by the European colonial powers, thanks to the “world” wars in Europe and subsequent independence wars in the rest of the world, modern political states were formed and there was a brief window to rethink what they valued as a society. A brief window to restructure the equation of work, value and education.

The conventional advice we receive today stem from ideas /assumptions developed about work and productivity in the few years following this period. The post-war/post-independence concept of work was largely shifting from work-for-survival to work-for-comfort for an increasing number of people. Not a significant proportion of society but an increasing one. More people were making the transition from ‘Basic Needs’ to upper levels of ‘Psychological Needs’ of Maslow’s Hierarchy.

Maslow's Hierarchy of Needs
Maslow’s Hierarchy of Needs

Several events in the western world set the tone for what conventional ideas surrounding work would soon look like. Labor unions began mounting political pressure in the 1870s for 8 hour-work-days.

Henry Ford re-organized the manufacturing process of his car factory by breaking it up into small, specialized tedious parts which meant that a worker needed only minimal training to contribute to the process. This resulted in huge efficiency gains. Subsequently he was one of the first industrialists who supported a 40 hour work week. It was more or less passed into law in the US in 1940s.

Similarly Germany set the retirement age at 65 in the late 1800s as a populist political move (why 65? Simply because people were not expected to live beyond that age at the time). The trend spread among other governments with the US government finally passing it into law in 1935.

Ryan Avent in his brilliant essay “Why we work so hard?” beautifully articulates that the post-war concept of work was a

“…means to an end…it was something you did to earn the money to pay for the important things in life….the working class had become a leisured class. Households saved money to buy a house and a car, to take holidays, to finance a retirement at ease…work was never supposed to be the centre of one’s life…”.

The industrial revolution was reaching its zenith with increased automation and innovation. There was an idea prevalent in American society at the time that the trend of automation might continue free-ing many more people from the need to work 40 hours per week.

“Keynes extrapolated in 1930 that a century hence, society might be so rich that the hours worked by each person could be cut to ten or 15 a week”.

This extrapolation might seem strange or illogical today but at the time

“productivity rose across the western world, hourly wages for typical workers kept rising and hours worked per week kept falling – to the mid-30s, by the 1970s”.

The extrapolation at the time seemed pretty reasonable, so what happened? Why aren’t you and I looking forward to a 20 hour work week (after graduation) with loads of free time to binge watch the whole of Netflix or work on a startup idea or produce and raise children or compose the next Hamilton?

While the 40 hour work week was on its way to becoming the norm in the western world, the supposed automation that was required to sustain the productivity levels of the typical worker did not actually happen. The productivity level fell out of sync with the automation needed to sustain it and a 40 hour work week was no longer viable. This paved the way for exporting manufacturing jobs to cheaper markets which did not have such labor-market restrictions, like China.

Wherever it was possible to simplify and atomize manufacturing steps, the efficiency gains in the short run resulted in higher wages for workers but also made them more susceptible to automation in the medium run. Another school of thought also points out that all of this was happening against the backdrop of a decline in the bargaining power of labor unions and the welfare state.

“Less-skilled workers found themselves forced to accept ever-smaller pay rises to stay in work. (They willingly or unwillingly worked fewer hours).”

I want to present another key point about automation which is often missed in such analyses. After having built machine learning products for over 5 years overseeing algorithms & pipelines to automate and enable business decisions, a fundamental idea of automation is that the moment you automate something well enough, the user’s expectation quickly adapts to the automation and demands the next bit of automated personalized tweak. The assumption that the user’s demand will stay the same or even grow at a steady pace wherever automation becomes available is a poor one.

Just as in my day job, I must develop models that “evolve” in the right direction with parameters which adapt to the situation, ironically the idea of a static “40” hour work week is practically irrelevant to the dynamic changes in the value creation chain today. Most high skill and low skill jobs require longer hour-work-weeks to justify the cost of the employee to the organization.

So while conventional ideas about work paint a picture of 40 hour, 5-day work weeks, 9am-5pm jobs, with expected retirement at age 65, all of this is becoming rapidly irrelevant. So what does it actually look like? What is the reality? What is it going to look like in the near future? This is what I talk about in The Future of Work, but first Now & the Near Future.