Work or Welfare?
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Work or Welfare?

Joel Kotkin
Joel Kotkin
9 min read

If a man doesn’t have a job or an income, he has neither life nor liberty nor the possibility for the pursuit of happiness. He merely exists.
~Martin Luther King, Jr. (1968)

Throughout history, work has been the common lot of humanity—at least, outside of the idle rich and those who could not find any. It was celebrated by the Calvinist capitalists described in Weber’s The Protestant Ethic and the Spirit of Capitalism as a means for people to achieve their “own salvation.” Labor for its own sake was embraced by the Marxist canon as well—work, wrote Friedrich Engels, “is the prime basic condition for all human existence, and this to such an extent that, in a sense, we have to say that labor created man himself.”

Yet today’s baffling shortage of workers in high-income countries may presage something different: a post-work society, in which only a select few labor. For most, economic maintenance would come from some form of universal basic income (UBI). This notion has been tried as part of the COVID-19 relief program and in President Biden’s proposed Build Back Better initiative, which allows benefits for those who could join the workforce but don’t care to.

This idea is arising at a propitious time. A strong majority of people in 28 countries around the world, according to a recent Edelman survey, believe that capitalism does more harm than good. More than four-in-five worry about job loss, particularly from automation. Rising inequality and general fear of downward mobility have boosted support for expanded government and greater re-distribution of wealth.

Surplus classes

As early as 1995, author Jeremy Rifkin suggested that automation would eliminate work for most and create the basis for a society where “large numbers of people could be liberated from long hours in the formal marketplace.” This would allow them to focus on “leisure activities,” a kind of technological utopia for the masses.

It’s a compelling vision in some ways, but right now it looks dystopic. The ranks of what Marx called the “reserve army of the unemployed” are simply disengaging. A decade ago, Gallup’s Jim Clifton wrote about The Coming Jobs War, in which he predicted a global struggle for diminishing employment. Now there is plenty of work but people are not interested. In the US, labor participation rates have fallen from 80 percent in 1950 to 61 percent now, down from 64.4 percent in 2010. Nearly one-third of American working-age males are not in the labor force, suffering high rates of incarceration, or drug, alcohol, and other health issues.

And, to be sure, opportunities may be further reduced by technology, which could accelerate the loss of many kinds of jobs that once provided a means of upward mobility: postal workers, switchboard operators, machinists, computer operators, bank tellers, travel agents. For the 90 million Americans who work in such jobs—and their counterparts elsewhere—the future could be bleak. By 2030, Oxford Economics predicts that 20 million factory jobs worldwide will fall to automation—1.5 million in the US, 2.5 million in the EU, and 12.5 million in China.

The pandemic clearly accelerated this process, notably in the service sector. With the shift to online and takeout food, chains like McDonald’s are perfecting electronic delivery systems that reduce the need for human labor. Large capital investments are necessary for such adaptations, which—as France’s Thomas Piketty has noted—favors larger corporations as opposed to smaller family businesses.

Globalism, automation, and its effects

A plausible future scenario is a society in which a small, hyper-productive technical and managerial elite delivers food, housing, and pleasure to the plebes, like those in the later centuries of the Roman Empire. Their only role in society would be to take and not threaten the imperial state—a system that only worked due to the presence of slaves and huge territories to pillage.

In the West, globalization has worked to undermine much employment and promoted a pervasive sense of what historian Martin Wiener calls “psychological de-industrialization”—a loss of interest in making things. Between 2000 and 2007 alone, the United States hemorrhaged 3.4 million factory jobs, about 20 percent of the sector’s total. The trade deficit with China, according to the Economic Policy Institute, has cost as many as 3.7 million jobs since 2000, and similar symptoms have spread to Germany, long an industrial paragon.

Many of these problems are of our own making. Pundits have long been predicting the demise of factory jobs, and by now, according to Rifkin, factories should be “near workerless.” Yet as automation kicks in, American factory managers increasingly complain of a distressing lack of skilled workers. Due to an aging workforce, as many as 600,000 new manufacturing jobs are expected to be generated this decade which cannot be filled. The current shortage of welders could grow to 400,000 by 2024. Amid a mild recovery in the US, by May, an estimated 500,000 manufacturing jobs were left unfilled.

In contrast, our non-Western competitors, notably China, are building a skilled workforce that can operate sophisticated automated facilities. As a report from American Compass noted, “Only five percent of American college students major in engineering, compared with 33 percent in China; as of 2016, China graduated 4.7 million STEM students versus 568,000 in the United States, as well as six times as many students with engineering and computer science bachelor’s degrees.” Meanwhile, in the US, Apple CEO Tim Cook has observed, “you could have a meeting of tooling engineers and I’m not sure we could fill the room. In China, you could fill multiple football fields.” This helps explain why the company maintains virtually all its production in the Middle Kingdom.

The green dawn of post-industrialism

While Asian countries are focusing on future work, Western societies seem determined to eliminate gainful employment for blue-collar and middle-management workers. Many jobs that could support families have disappeared, and most new opportunities tend to be low-wage service work. One widely cited reason for the recent labor shortages relates to a post-pandemic reluctance to accept low wages, including those in the “gig” economy, where pay and hours are often uncertain.

Some low-paid workers have also found state support during the pandemic to be, in some cases, more profitable than work, and a way to remove the risks associated with crowded offices and public transport. Yet, although the pandemic was the trigger for this withdrawal, high levels of public welfare delinked from work have also been associated with the persistently high unemployment that has plagued countries such as Italy and Spain.

Not everyone sees mass idleness as an unalloyed negative. “Post-work” fits neatly with the de-growth philosophy pushed by climate activists today. This notion seeks to ratchet down consumption among the masses by reducing the size of homes, cars, air travel, and air conditioning. Particularly hard-hit would be millions of working-class people, particularly those in well-paying manufacturing, construction, and energy jobs. UBI would provide the basics for a properly austere ecological lifestyle.

Perhaps the most perverse impact of all this is that, by raising energy and other costs, it accelerates the de-industrialization of countries like the United Kingdom, and could make it harder to shift production to places like India and China, by far the world’s largest emitter. By the time China, India, and other developing countries have to embrace lower emissions, likely with nuclear power, the largely self-driven de-industrialization of the West will likely be all but complete.

Building the post-work society

The most powerful groups advocating for a post-work future are precisely those most illustrative of the economic transformation of our times. Leading tech entrepreneurs may behave like obsessed workaholics, but they see no reason for the plebes to live the same way. Greg Ferenstein, who interviewed 147 digital company founders, says most of them believe that “over the (very) long run, an increasingly greater share of economic wealth will be generated by a smaller slice of very talented or original people. Everyone else will increasingly subsist on some combination of part-time entrepreneurial ‘gig work’ and government aid.”

Numerous figures such as Mark Zuckerberg, Pierre Omidyar, Elon Musk, and Sam Altman, founder of the Y Combinator, have embraced a “guaranteed wage,” that would cover most critical household bills. This notion of a work-free future may be enticing to some, but the reality may be far less pleasant. As author Aaron Renn suggests, for those parts of American society where income transfer has become a way of life, like Native Americans, the result has been shocking levels of drug abuse, alcoholism, and idleness.

In our era, a broad-based UBI would necessitate high taxes, particularly on the already beleaguered middle class. The question will then be who gets what and who pays? Democratic presidential candidate Andrew Yang’s campaign was built around UBI, and his plan was estimated to cost around $2.8 trillion annually, paid for by a national value added tax, and higher capital and social security taxes. But some on the Left see even UBI as inadequate, and seek to seize tech wealth and commandeer their technology to create “fully automated luxury communism”—a leisure society paid for by Apple and its counterparts.

Unsurprisingly, much kneejerk opposition to UBI comes from the Right. But Damon Linker, a liberal writing for the Week, describes UBI as the road to “spiritual ruin,” particularly for those most dependent on it. Some on the Left even see it as the construct of a neoliberal “income scam” to hasten the end of productive work and upward mobility. Most voters, according to an October Morning Consult poll, also oppose permanent income supports. Yet Democratic strategists realize that such largesse, once offered, will be likely accepted by recipients and so want to continue it ad infinitum.

The hard work alternative

The current labor shortage, and predictions of its continuance, suggest that the market for work has not disappeared in areas such as manufacturing, logistics, and home-building, precisely where labor shortages are most acute. In his 1995 book, The End of Work, Rifkin suggests that industrial employment would be eliminated early in this century, but labor demand, not only in manufacturing, is on the rise.

Rather than embrace expanded welfare, we could see a resurgence of higher wage work, including in blue-collar fields. Demographic forces in the West and China have created a diminished workforce. US population growth in the working-age cohort, 16–64, has dropped from 20 percent in the 1980s to less than five percent in the last decade. These trends were evident before the pandemic, when working-class Americans were making significant income gains for the first time in a generation.

The labor force is now down 8.4 million over the past year in the US alone, and with a record 10.1 million job openings, even restaurants are being forced to hand out “signing bonuses” as workers remain on the sidelines, awaiting higher pay. These shortages are appearing in virtually all high-income countries, including the EU, the UK, Japan, and even China, where the workforce fell by over five percent in the last decade. Similar developments have been seen in other countries, including Australia, where the western mining industry is being slowed by a lack of drivers.

Economists may hate labor shortages for raising business costs, but the pandemic could help ameliorate the growing inequality in advanced countries by raising wages and reaffirming the value of work itself. As occurred in the wake of the far more deadly Medieval European plague, workers and entrepreneurs who somehow survived that contagion found new opportunities and greater demand for labor.

What kind of society do we want?

We have two options. We can surrender our future prosperity for an automated society in which the standard of living drops to levels comparable to those in the Soviet Union than in late-20th century Europe, Japan, or America, or we can continue to improve our societies. There are many necessary things we can do with well-compensated labor that extend beyond algorithms.

There’s a clear need for new housing and other infrastructure, providing medical care, and, perhaps most critically, getting humanity an exit pass from this planet. As anyone who has visited the space factories here in Southern California will know, we still need people—from engineers to machinists—to build rockets, drones, and moonwalkers. Much of this demand could be satisfied with intensely targeted skills training, and most employers now prefer this for many jobs over a college degree.

This work-society follows the path that led, albeit with some cruelty, to the exploration of the oceans, the mass settling of continents, the conquest of diseases, the building of healthier cities and, in the past half-century, the spread of prosperity to East Asia and other once-poor areas. These are emblems of a society moving forwards, worthy heirs of progress from the “age of exploration” to the heady days of Silicon Valley.

The alternative system, particularly under the de-growth regime, offers a different prospective future. This society may be secure in the basics, but it will be parasitic and stagnant, much like the last centuries of the Roman Empire or the Ch’ing Dynasty. It is a society in which young people can look forward to subsidized schooling, housing, and perhaps part-time work, but may never buy a house, raise a family, or start a significant business.

In a post-work world, the whole diverse character of our lives—the last remaining vestiges of autonomy—would disappear. It may be true that artificial intelligence will deliver goods and services efficiently, but would they be able to provide personalized service, or allow for human creativity? We may exist in a digital age, but the analog is where we live, and without it our lives will be very bleak indeed—our democracy will be functionally dead as we go from contributors to permanent dependents. In our understandable desire to eliminate poverty and raise basic living standards, we need not embrace a system that turns most people into quiescent drones. The price of security must not be a new and cushy kind of slavery.

American Politicseconomics

Joel Kotkin

Joel Kotkin is the presidential fellow in Urban Futures at Chapman University and executive director of the Urban Reform Institute. His new book is 'The Coming of Neo-Feudalism.'