Must Reads: The American Prospect's David Bensman says the state of play for roughly one third of the U.S. workforce is contingency employment, which he argues is "robbing workers of wages, benefits, and job security." The American Enterprise Institute's James Pethokoukis and Robert Doar discuss why jobs are the best weapon in the war on poverty. Meanwhile, Shelterforce Magazine devotes an entire issue to impact investing, including this interview on defining philanthropic equity. Lastly, over at the Five-Thirty-Eight blog, Ben Casselman assesses rising inflation's impact on the poor.
Let's start with an editorial cartoon from the Augusta Chronicle's Rick McKee:
Andrew Flowers on the Five-Thirty-Eight blog says new research shows low-income workers should worry about being replaced by robots and other technology:
[C]an a robot really do a janitor’s job? Can software fully replace a fast-food worker? Economists have long considered these low-skilled, non-routine jobs as less vulnerable to technological replacement, but until now, quantitative estimates of a job’s vulnerability have been missing from the debate. Based on a 2013 paper by Carl Benedikt Frey and Michael A. Osborne of Oxford, occupations in the U.S. that pay at or near the minimum wage — that’s about one of every six workers in the U.S. — are much more susceptible to “computerization,” or as defined by the authors, “job automation by means of computer-controlled equipment.”
In the New Yorker, George Packer discusses the invisible workers at the end of the online supply chain:
The invisibility of work and workers in the digital age is as consequential as the rise of the assembly line and, later, the service economy. Whether as victim, demon, or hero, the industrial worker of the past century filled the public imagination in books, movies, news stories, and even popular songs, putting a grimy human face on capitalism while dramatizing the social changes and conflicts it brought. The guy stocking shelves and the girl scanning purchases at Target never occupied much of a place in the public mind, and certainly never a romantic one (no one composed a “Ballad of the Floor Associate”), but at least you had to look at them whenever you ventured out to stimulate the economy. They reminded you that low-priced Chinese-made goods were a mixed blessing—that many of the jobs being created in post-industrial America were crappy ones. With work increasingly invisible, it’s much harder to grasp the human effects, the social contours, of the Internet economy.
Over at In These Times, Sarah Jaffe says with technology changing the game, the future of the labor force might be jobs that require high emotional intelligence--unfortunately many of these jobs have been traditionally done by women and extremely undervalued:
If those social-skilled jobs are the only ones that will be left to us, will we learn to value them more? Or will this just be another excuse to pay workers less? The question, like the question of what is a skill in the first place, is one of power. The end of jobs doesn't have to be a dystopian nightmare. There is some truth to the rosy picture painted by Kelly Services about the “free agent” workforce. I once left a full-time job to be a freelancer, and I enjoyed the experience: writing for a variety of outlets, learning from new editors, sharpening different styles, working when I wanted. The pleasure came to a grinding halt, though, when a client who owed me what amounted to more than two months of my rent didn't pay for several months, and I had few other financial options. I needed a way to pay the bills if the work didn't come through, and our current so-called social safety net didn't offer one.
Meanwhile, Brookings' Kemal Dervis says with technology reshaping work may be it's time to ditch the GDP metrics and develop ones that looks at well-being:
Why, with all this new technology and imminent productivity increases, do so many continue to argue that everyone has to work more and retire much later in life if economies are to remain competitive? Or is it just the highly skilled who have to work harder and longer, because there are not enough of them? In that case, perhaps older workers should retire sooner to make room for the young, who have skills more appropriate to the new century... The nature and measurement of economic progress should involve a new social contract that allows societies to manage the power of technology so that it serves all citizens. Working, learning, enjoying leisure, and being healthy and “productive” should be part of a continuum in our lives, and policies should be explicitly aimed at what facilitates this continuum and increases measured wellbeing.
In the Harvard Business Review, Accenture's Matt Reilly says businesses are investing in technological efficiency rather than growth. In this recent speech, Federal Reserve chair Janet Yellen discusses the economic recovery and "maximum employment." (You may also be interested in this discussion on Yellen's stance in the New Republic.)
In the Washington Post, Emily Badger says it is a tough decade to be a young worker, check out this chart:
In CNN Money, MIT's Thomas Kochan says working hard and getting a good education is no longer enough to make it in America, and argues that we should look for "common ground on a Social Contract that works for the next generation":
Nearly 40% of recent college graduates are "underemployed," i.e., working in low-wage retail, restaurant, or other service jobs that don't require a college degree, don't put their skills to work, or provide opportunities for further learning and development, according to Northeastern University's Center for Labor Market Analysis. Such jobs pay wages that are hardly sufficient to meet their college debt payments, much less start a career or a family... Can this downward, disturbing trend be changed? I believe it can, if we start work now on building a consensus strategy for the future.
Can you work your way through college like days of old? Not a chance, reports PolicyMic's Tom McKay, using Michigan State as example:
The 1979 student would have to work about 10 weeks at a part-time job (~203 hours) — basically, they could pay for tuition just by working part-time over the Summer. In contrast, the 2013 student would have to work for 35 ½ weeks (~1420 hours) — over half the year — at a full-time job to pay for the same number of credit hours. Anyone who has attended college full-time knows that this is basically impossible for the vast majority of students.
Check out this chart showing changes in life expectancy rates by income from the Atlantic's Derek Thompson:
[The chart] tells a really sad story. In the richest country in the world, the expected lifespan of middle- and lower-income women is actually declining. At every income level, more money means more life.
In this cool interactive infographic, Pew looks at the demographic changes that will impact the United States in the next few decades and the need for generational equity. In the New York Times, the Third Way's Jonathan Cowan and Jim Kessler say the minimum wage is just the tip of iceberg on for helping low-income people's wealth picture:
Raising the minimum wage has justifiably captured policy makers’ attention, but if the goal is to materially raise living standards for every American worker, we should also be calling for a minimum pension. Done right, this would not only create real wealth for the middle and working classes, it would use the power of financial markets to reduce wealth disparity instead of widening it. There is a vast difference in the way the wealthy and the rest of Americans earn their money... The biggest winners would be minorities, who have high labor participation rates but lag far behind whites in retirement savings. Only 34 percent of working-age Latinos and 51 percent of African-Americans with full-time jobs participate in employer-sponsored retirement plans, compared with 59 percent for whites, who also contribute more to these plans.
Over at Fast Company, Adam Smiley Poswolsky notes a lot more young people are looking to find meaning and social impact in the jobs than simply climbing the old corporate ladder:
Young people aren’t waiting for retirement. They’re asking what their purpose is now, and they’re determined to find the opportunities, organizations, and companies that share their purpose. A recent study by Net Impact showed that the millennial generation expects to make a difference in the world through their work, and more than half of millennials would take a 15% pay cut to do work for an organization that matches their values.
Pacific Community Ventures' Ben Thornley, Cathy Clark of CASE i3 and ImpactAssets' Jed Emerson wrote about the global context of impact investing on the HuffPost Business blog:
There is a lot of talk about "mainstreaming" impact investing, as if the practice is inherently distasteful and requires a special marketing campaign. But when you study what's really going on in the world of finance today, as the three of us have from our different vantage points, what we see is the emergence of a new kind of capitalism, one that looks squarely to the future needs of the planet and to finance as a means to help achieve them.
Impact Hub DC's Allison Basile argues that in order for investing to truly have a social impact, we need a completely new economy:
Political-economic systems are characterized by who owns property, or the means to create wealth. Right now, power and wealth are concentrated in the hands of few corporations and individuals, leaving us with little or no control over our lives and communities. To get to the root of our challenges, we have to expand and localize ownership of our economic resources. While the sharing economy holds exciting possibilities for people (with means) to sell and exchange services like housing and transportation, the privately owned, venture-capital funded corporate structure of most sharing economy platforms doesn’t take us far enough from the status quo. New approaches like impact investing are promising, but if we want to get to the root of our crises, we have to ensure that we are building wealth and expanding ownership opportunities for the communities we’re aiming to impact.
Some writers are more optimistic about impact investing’s small scale: “Social investment is all about making the most out of limited resources and leveraging larger amounts of capitals,” says Caroline Hartnell at Alliance Magazine. Sophie Hudson in Pioneer Post looks at the ways in which social entrepreneurs need to balance their social goals with long-term financial sustainability.
In impact measurement news, on Markets for Good, Coopmetrics’ Annie Donovan and Rick Jacobus blog about their Homekeeper project and the importance of peer benchmarking in data. Read more about what we're reading on philanthropy here.
Tax Day has come and gone, but the old argument about corporate taxes and what they have to do with work in America remains. Over at the Hill, the RATE Coalition's James Pinkerton and Elaine Karmack say the current tax structure is killing jobs:
A simpler, more competitive system will encourage economic growth, job creation and make things fairer for families. In fact, a 25 percent corporate tax rate is expected to create 500,000 jobs and expand average household income by $2,484 per year. We can’t afford to wait any longer before undertaking fundamental reform. U.S. jobs, headquarters and companies are fleeing to nations with more hospitable corporate tax rates and the consequences are frightening. A recent Ernst & Young study found that due to reductions in the corporate income tax rate enacted abroad over the past several decades and as a direct result of our high corporate rate, U.S. GDP in 2013 was estimated to be reduced by 1.2 to 2.0 percent.
The International Business Daily reports on Walgreens' possible to move to Europe and argues that taxes are too high. A new report from the Council on Foreign Relations finds that tax policy disadvantages companies that are largely domestic, such as retailers and service firms known to be a driver of U.S. jobs. Over at Fast Company, Ben Schiller looks at 111 corporations that paid no taxes at all in the last five years.