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Notes on The End of Work

by Jeremy Rivkin, 1995

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Global unemployment has now reached its highest level since the great depression of the 1930s.  More than 800 million human beings are now unemployed or underemployed.

For the whole of the modern era, people’s worth has been measured by the market value of their labour.

In the U.S. corporations are eliminating more than 2 million jobs annually.

In the U.S. more than 90 million jobs in a labour force of 124 million are potentially vulnerable to replacement by machines.

Recent studies have exploded the myth that small businesses are powerful engines of job growth in the high-tech era.

French economist Jean Baptiste Say was among the first to argue that supply creates its own demand.

Charles Kettering of General Motors said, “The key to economic prosperity is the organized creation of dissatisfaction.”  John Kenneth Galbraith put it more succinctly when he observed that the new mission of business is to “create the wants it seeks to satisfy.”

The ever-increasing perfectibility of modern machinery forces each industrialist, factory-owner, entrepreneur to upgrade his equipment, and thereby his productive capacity, notwithstanding the fact that purchasing power, either through greater employment, higher wages, or the extension of markets can never keep pace, over the long run, with the increase in productive capacity.

The New Deal was at best only a partial success.  In 1940 the nation’s unemployment still hovered at nearly 15 percent.  Although the rate was considerably lower than in 1933, when it had reached a high of 24.9 percent, the economy continued in depression.

To reduce unemployment by a single percentage point would require the overnight creation of something like eleven biotech industries.

The gap in educational levels between those needing jobs and the kind of high-tech jobs available is so wide that no retraining program could hope to adequately upgrade worker’s skills to match those limited high-tech job opportunities.

One out of every three adults in the U.S. is functionally, marginally, or completely illiterate.

Although the Clinton administration does not openly use the term trickle-down technology, it continues to pursue an economic agenda based squarely on its underlying assumptions.

Rene Descartes, the French mathematician and philosopher, was the first to advance the radical idea of nature as a machine.  In Descartes’ utilitarian world, God, the benevolent and caring shepherd of Christendom, was replaced with God, the remote and cold technician who created and set in motion a machinelike universe that was orderly, predictable, and self-perpetuating.  Descartes stripped nature of its aliveness, reducing both creation and creatures to mathematical and mechanical analogues.  He even described animals as “soulless automata” whose movements were little different from those of the automated puppetry that danced upon the Strasbourg clock.

The technocracy movement (its proponents advocated “rule by science” rather than “rule by man” and urged America to grant near-dictatorial powers to scientists and engineers) captured the imagination of the country in 1932.  Its success was to be short-lived.  Internal bickering among its leader led to a splintering of the movement into warring factions.

In October 1944 the first mechanical cotton picker was successfully demonstrated in the Mississippi delta.  It could pick 1000 pounds of cotton an hour, thereby doing the work of 50 seasoned pickers.  In 1949 only 6 percent of the cotton in the South was harvested mechanically; by 1964 it was 78 percent.  Eight years later, 100 percent of the cotton was picked by machines.

More than 5 million blacks migrated north in search of work between 1940 and 1970.  The fortunes of black workers in the North improved steadily until 1954 and then began a forty-year historical decline.

Technology eliminates jobs, not work.

The father of cybernetics, Norbert Weiner, became so fearful of the high-tech future he and his colleagues were creating that he wrote an extraordinary letter to Walter Reuther, president of the United Auto Workers, pleading for an audience.  He warned Reuther that the cybernetic revolution “will undoubtedly lead to the factory without employees...and the unemployment produced by such plants can only be disastrous,” and promised Reuther his full backing and personal loyalty in any concerted national campaign by organized labour to address the issue.

Reuther was initially sympathetic and began to faintly echo Weiner’s concerns before congressional committees and in public addresses.  Despite all of the public rhetoric, however, organized labour proved far more conciliatory behind closed doors in the collective bargaining process.  Fearful of being branded as modern-day Luddites and obstacles to progress, unions for the most part capitulated to management on the issues surrounding automation.

While the unions were correct in their belief that automation would shrink the ranks of the unskilled labour force, they grossly overestimated how man high-skilled jobs would be created by the new technologies.  They failed to grasp the central dynamic of the automation revolution—management’s single-minded determination to replace workers with machines wherever possible, and, by so doing, reduce labour costs, increase quality control, and improve profit margins.

Robert Theobald argued that since automation would continue to boost productivity and replace workers, it was necessary to break the traditional relationship between income and work.  With machines doing more and more of the work, human beings would need to be guaranteed an income, independent of employment in the formal economy, if they were to survive and the economy were to generate adequate purchasing power to buy the goods and services being produced.  He wrote, “For me, therefore, the guaranteed income represents the possibility of putting into effect the fundamental philosophical belief which has recurred consistently in human history, that each individual has a right to a minimal share in the production of society.”

Milton Friedman also favoured a guaranteed income to the poor so that they could make their own personal consumption decisions in the free market, unencumbered by the dictates of bureaucrats.

Although liberal and conservative economists differed in their reason for supporting a guaranteed annual income, the growing interest in the idea led President Lyndon Johnson to establish a National Commission on Guaranteed Incomes in 1967.  After two years of hearings and studies, the commission, made up of business leaders, representatives of organized labour, and other prominent Americans, issued their report.  Commission members were unanimous in their support of a guaranteed annual income.  The report stated that “Unemployment or underemployment among the poor are often due to forces that cannot be controlled by the poor themselves.  For many of the poor, the desire to work is strong but the opportunities are not...Even if the existing welfare and related programs are improved, they are incapable of assuring that all Americans receive an adequate income.  We have therefore recommended the adoption of a new program of income supplementation for all Americans in need.”

The report was largely ignored.  Many Americans, and most politicians, found it difficult to accept the notion of providing people a guaranteed income because they believed it would seriously undermine the work ethic and produce a generation of Americans unwilling to work at all.  While the commission’s recommendations languished, the federal government did carry out a number of pilot projects to test the viability of providing a guaranteed annual income.  To its surprise, the government found that it did not appreciably reduce the incentive to work, as many politicians had feared.

In the 1980s, U.S. businesses invested more than one trillion dollars in information technology.  More than 88 percent of the total investment was made in the service sector, to help improve efficiency and reduce costs. Despite the large investments, productivity continued to limp along, increasing at about 1 percent a year. Economists began talking about the “productivity paradox.”  Some, like Harvard’s Gary Loveman, spoke openly about the utter failure of the highly touted technological revolution to whom so many had looked for their salvation.  Just as corporate CEOs began to sour on the new information technologies, the productivity paradox suddenly disappeared.  In 1991 output per hour increased by 2.3 percent.  In 1992 productivity soared to nearly 3 percent, the best performance of any year in more than two decades.  It became increasingly apparent to everyone who studied the phenomenon that the failure to achieve productivity gains faster lay not with the new laboursaving, timesaving information technologies, but rather with outmoded organizational structures that were not able to accommodate the new technologies.

Nearly half the human beings on the planet still farm the land, 2.4 billion to be exact.

In 1850, 60 percent of working Americans were employed in agriculture.  Today, less than 2.7 percent of the workforce is engaged directly in farming.  However, more than 20 percent of the GDP and 22 percent of the workforce is dependent on domestic crops and livestock.  The food and fibre industry is the single largest industry in the U.S.

A new variety of tomato was introduced in the 1960s that would ripen at the same time and be strong enough to withstand machine handling.  A new harvesting machine was designed specifically for harvesting the new variety, and within less that twenty-four years—from 1963 to 1987—the harvesting of tomatoes in California went from hand picking by Mexican immigrant labour to automated machine handling.

In 1850 a single farm worker produced enough food to feed four people.  Today, in the U.S., a single farmer supplies enough to feed more than seventy-eight people.  Agricultural production, even more than manufacturing production and service, has been stymied by ever-increasing output pitted against insufficient demand, with terrible consequences for farm families and rural communities.  There are currently more than 9 million people living below the poverty line in depressed rural areas across the U.S.—all casualties of the great strides in farm technology that have made America the number-one food producer in the world.

With its computerized manufacturing process, the mini-mill can produce a ton of steel with less than one twelfth the human labour of a giant integrated steel mill.

In 1980 United States Steel, the largest integrated steel company in the U.S., employed 120,000 workers.  By 1990 it was producing roughly the same output using only 20,000.  These numbers are projected to fall even further in the coming decades.

Today, powderized metals are poured from bags—like cement mix—into pressurized moulds which shape the component parts.  In some instances lightweight ceramics and plastics are substituted for powderized metals and put through the same mould process.  Making precision parts from moulds and casts has eliminated the jobs of thousands of skilled machinists.

General Electric, the world’s largest corporation, has reduced worldwide employment from 400,000 in 1981 to less than 230,000 in 1993, while tripling its sales.

The textile industry is becoming a high-tech industry with automation accounting for almost 70 percent of the production process.

For more than forty years the service sector has been absorbing the job losses in manufacturing.  With new information technologies beginning to make major inroads in the service sector, it’s has become apparent that this trend cannot continue indefinitely.

New electronic scanning technologies permit a possible 10 to 15 percent reduction in jobs for cashiers, the third largest clerical group after secretaries and bookkeepers.

Back in the early 1970s the average guy with a high school diploma was making $24,000 in today’s dollars.  Today a similar guy is making about $18,000.

In 1979 CEOs in the U.S. made 29 times the income of the average manufacturing worker.  By 1988 the average CEO was making 93 times the earnings of the average factory worker.

Less than half of 1 percent of the American population owns 37.4 percent of all corporate stocks and bonds and 56.2 percent of all U.S. private business assets.

Below the super rich is a slightly larger class consisting of 4 percent of the workforce who manage the new high-tech information economy.  This small group earns as much as the entire bottom 51 percent of American wage earners.

In 1992, 36.9 million Americans were living in poverty, an increase of 17 percent since 1989.  More than 33 percent of blacks,  29.3 percent of Hispanics, and 11.6 percent of whites live below the poverty line.

The cost of a first home went from 29.9 percent of income in the 1970s to 37.2 percent of income in the 1980s.

From early childhood, youngsters are constantly asked what they would like to be when they grow up.  The notion of being a “productive” citizen is so imprinted on the nation’s character that when one is suddenly denied access to a job, his or her self-esteem is likely to plummet.  To be under-employed or unemployed is to feel unproductive and increasingly worthless.

Many workers are becoming expendable, then irrelevant, and finally invisible in the new high-tech world of global commerce and trade.

In Western Europe one in nine workers is currently without a job.  In Spain, once among the fastest-growing countries in Europe, one out of five workers has no job.  Moreover more than 45.8 percent of the unemployed worker in Europe have been without a jobs for more than a year.

In Spain and Holland, 33 percent of the workers are part-time, in Norway more than 20 percent, and in the U.K. nearly 40 percent.

With longer paid vacations and fewer working hours, European labour is 50 percent more expensive than either U.S. or Japanese labour.

When companies build new factories in developing countries they are generally far more highly automated and efficient than their counterparts back in the U.S.

In Mexico, 50 percent of the workforce is unemployed or underemployed.

Shrinking employment opportunities in the formal economy, and reduced public spending will require that greater attention be focused on the third sector: the non-market or social economy.

Automation threatens to render possible the reversal of the relation between free time and working time: the possibility of working time becoming marginal and free time becoming full time.  The result would be...a mode of existence incompatible with the traditional culture.  Advanced industrial society is in permanent mobilization against this possibility.

Herbert Marcuse

William Green, the former president of the AFL said: “Free time will come.  The only choice is unemployment or leisure.”

Harvard economist Juliet Schor points out that American productivity has more than doubled since 1948, meaning that we can “now produce our 1948 standard of living in less than half the time it took in that year.”  Yet Americans are working longer hours today than forty years ago at the outset of the information-technology revolution.

Many companies prefer to employ a smaller workforce at longer hours rather than a larger one at shorter hours to save the costs of providing additional benefits, including health care and pensions.

A survey of 300 business leaders, conducted several years ago, soliciting their support for a shorter week did not receive a single positive response.  One Fortune 500 CEO wrote back, “My view of the world, our country and our country’s needs is dramatically opposite of yours.  I cannot imagine a shorter work week.  I can imagine a longer one...if America is to be competitive in the first half of the next century.”

Pension funds account for over one third of all corporate equities, and nearly 40 percent of all corporate bonds.  Pension funds hold nearly one third of the total financial assets of the U.S. economy.

While the business sector makes up 80 percent of the economic activity in the U.S., and the government sector accounts for an additional 14 percent of the GNP, the independent sector currently contributes more than 6 percent to the economy and is responsible for 9 percent of the total national employment.

If you look closely you will see that almost anything that really matters to us, anything that embodies our deepest commitment to the way human life should be lived and cared for, depends on some form—often many forms—of volunteerism.

Margaret Mead

The U.S. alone, with less than 5 percent of the earth’s population, is now consuming more than 30 percent of the world’s remaining energy and raw materials.

If giving money to charitable efforts is deemed worthy of tax deductions, why not extend the idea to cover deductions for the donation of hours given to the same efforts and causes?

Although corporate philanthropy reached $5 billion in 1992, it represents less than 5 percent of all giving to the third sector.

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