(Right now I am working with two global organizations that are redesigning their workforce to be more agile and competitive in a world that is volatile, uncertain, and disruptive. What we are finding is that the old ways most of us experience employment is going to radically change.)
Lots of politicians and economists are talking about stagnating wages for the middle-class. This is a real and persistent problem. This is the final proof that trickle-down economics is a failed idea. This is the narcissistic idea that the prosperity of wealthy individuals and big businesses create a river of well-paying jobs to provide an on-ramp to the good life for people who actually work for living.
The evidence against this ‘what’s good for me is good for you’ economic theory is now overwhelming. Real middle-class wages have not risen since 1979. And virtually all of the astonishing gains in worker productivity in the past 20 years have gone into Mount Everest levels of executive compensation and vast oceans of corporate profits.
Corporations make so much money they literally don’t know what to do with it. In 2014 they spent nearly twice the amount of their profits buying their company stock rather than investing in research and development. And overall they spent nothing on raising employee wages. (By the way, companies who use their profits to buy their stock back do so to manipulate their stock price. It’s called ‘financial engineering.’ The only people that benefit from this game are senior executives who hold stock options and stock traders who make money timing the temporary upward bounce in the company stock price. More and more economists are suggesting that stock buyback should become illegal.)
Perhaps the most realistic way to view today’s economy is to recognize how similar it is to the heyday of Kings and Princes who ruled Europe for centuries. When the Royals were in charge only they and their families could own property, which was the main source of wealth. They depended on peasants and craftsmen to operate their farms and make tools, weapons and clothing. For centuries every person was stuck in the class they were born into. Virtually everyone’s life would be exactly like their parents.
The economic and social stagnation of an economic system that suffocated individual dreams was the reason people risked their lives on dangerous and leaky boats to come to America. The promise of the American dream is that where you start life should not determine where you finish. In the American colonies land was so plentiful that a common citizen could actually own the title to their family farm. That idea was so big it was worth fighting for.
When we started this country there were few big enterprises. Almost everyone was on their own. We were a nation of farmers, traders, merchants and craftsmen trying to build lives that would give our children a better starting place and a better world.
Today, large-scale enterprises are increasingly run like kingdoms. Senior management is the aristocracy and employees are peasants who simply don’t know how to get ahead. Let me be clear, the forces that are driving the new economic aristocracy are not a vast conspiracy of powerful elites. Most of these powerful people are not that smart, nor would they cooperate enough to actually sustain a conspiracy. No, the real reason is technology.
Consider this. There were almost no gains in productivity since the beginning of farming 12,000 years ago. Before that we were all hunter-gatherers living day-to-day. It was the Industrial Revolution that changed everything. The innovation of mass production enabled humans to increase their productivity by 50 times in 50 years. Nothing like that has ever happened in the history of the world. (The assembly line enabled a Model T to be built in 90 minutes. Before that, one car took 14 hours.)
Of course wage gains that were enabled by zooming productivity only took place because laws were strengthened to enable workers to organize into unions. For decades people who believed that large companies should be able to negotiate wages with individual employees without restraint ruled our country. The impact of this was that wages and working conditions never improved because there were always more economically desperate people willing to take less money than a current employee.
Finally the Supreme Court ruled that individuals could not effectively negotiate with employers on a level playing field. In other words, individuals had little leverage. Research has shown that the rise of unions caused wages to rise for everyone and created a great middle-class that arose after World War II. (Just so you know, I am not a fan of lots of the obnoxious demands and generally stinky behavior of union leaders over the past 70 years. The wildly adversarial positions that unions took created conditions that ultimately weakened them. On the other hand, without unions our workplaces might still be ridiculously dangerous and dreadfully dreary.)
What broke the back of unions were technology, globalization and politics. Once the labor pool for manufacturing became worldwide there was always a supply of peasants somewhere willing to do our jobs for very little money. Meanwhile robotics and automated factories shrunk the need for more workers.
Over the last 20 years the identical forces have begun to impact workers with college degrees. The main driver is increasingly smart artificial intelligence baked into software. Some experts assert that companies like Intuit, that makes products like TurboTax and QuickBooks, have put an estimated 20,000 trained bookkeepers and accountants out of business. Those of you who work for large corporations whose main systems are run on software built by companies like SAP, IBM and Oracle know first hand how many fewer people are needed today than were needed 10 years ago to operate the plumbing of giant global corporations.
I am afraid this is only the beginning of software devouring human jobs. Today we are encouraging all our children to learn how to code. But there are plenty of smart people working on software that will code its own improvements. Gulp!
This is serious. Research recently released from Oxford University claims that half the jobs that exist today are most likely not to exist 10 years from now. If you think I am over-blowing this consider the fact that some experts estimate that 80% of secretarial jobs have been eliminated over the last 25 years…mostly due to personal computers and the Internet.
So what should you do? What should your children do?
Lately I’ve been teaching employees of large companies a course I named Supercharge Your Career and Work like a Genius. It’s based on the idea that we are all pioneers again. I call it ‘Me, Inc.’ Just like the colonists who came to America we must become self-sufficient. All jobs are now temporary. The latest data reveals the average length of time someone works for their employer is less than 3½ years. We are all temporary contractors, no matter who is signing our paychecks. What I tell people is don’t confuse your job with your career.
In the future the people who will enjoy the most economic security will be those with a high degree of expertise and sophisticated emotional intelligence. It’s this intersection of knowing something valuable and having the influence power of emotional intelligence that will keep you in demand. Knowledge, skill and empathy… that’s the path to in–demand talent in the coming decade.
During the sessions I help people discover their motivated talents…what they are good and what they enjoy doing. This is critical because work success in the future will demand continuous learning and mastering new skills. To sustain the energy that this requires takes intrinsic motivation. If you do not love your work it is unlikely you will invest the energy necessary to be great at it.
Of course passion is not enough. There are plenty of people trying out for American Idol who think they are great singers because they wish they were. Many are just plain awful. We all have motivations that are disconnected from our abilities. The key is to find the intersection of our passionate interests and our true talent. Most often this comes not from introspection but from experience…trying stuff out.
Look at this as an opportunity. The world is not designed to employ you. And you don’t want to spend your life working simply to help other people achieve their goals.
It’s time to be clear on your goals. We are meaning-driven beings. Good work and trusting relationships gives our lives meaning. Neither of these things happens by chance. More than ever it is time to lead your life.