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Authors: Robert B. Reich

Tags: #Business & Economics, #Labor

The Future of Success

THE FUTURE OF SUCCESS

Robert B. Reich

*
Productivity grew at an anemic 1 percent per year in the 1970s, increased somewhat in the 1980s, then accelerated to 1.5 percent a year between 1990 and 1995, and almost 3 percent annually between 1996 and 2000. Even these official numbers may underestimate the recent gains. Productivity gains were easier to measure in an industrial economy in which products stayed roughly the same from year to year; it was just a matter of counting up how many more items were made per unit of work from one year to the next. But now that so many new products are better, faster, and cheaper than the ones they’re replacing, such a simple tally doesn’t reveal how much more value buyers are getting. On the other hand, the productivity gains of recent years may also be
overstated
somewhat because, as we shall see, most Americans are working longer hours than before—especially managerial, professional, and “creative” workers, who are putting in many extra hours at home and during travel. To the extent that these extra hours are not included in the calculation of output per unit of work time, there’s an upward bias in the productivity data.
*
I do not mean that laws or rules guarding privacy are unnecessary, but only that competitive forces will motivate sellers to be more responsive to customers’ concerns about privacy than otherwise. Of course, in order for the market to work on its own, buyers would need to be aware of how personal information about them was being utilized. It can hardly be assumed that they will always know.
*
Since 1950, the U.S. Bureau of the Census has been dividing workers into “Major Occupational Groups,” such as “managerial and professional specialty,” “technical, sales, and administrative support,” “service occupations,” “operator, fabricator, and laborer,” and “transportation and material moving.” But these categories have very little bearing on the new work. In
The Work of Nations
(1991), I reclassified workers into three more relevant groups: “symbolic analysts,” “routine production workers,” and “in-person service workers.” Among the remainder were government employees, farmers, miners, and other extractors of natural resources. Assessing the job data at the start of the twenty-first century, I would assign the highest-paid 25 percent to the category of “creative worker,” which, as I suggested in the preceding chapter, seems a more accurate description of what they do and will be doing in the future; about 20 percent to routine production; and slightly more than 30 percent to in-person services. Again, government employees and others make up the remainder.
*
The wide latitude accorded midcentury executives had already been the subject of considerable commentary for several decades. In 1932, Adolf A. Berle and Gardiner C. Means, lawyer and economics professor respectively, wrote
The Modern Corporation and Private Property,
a highly influential book which revealed that top executives operated corporations “in their own interests, and . . . divert[ed] a portion of the asset fund to their own uses.” But to overcome this plutocracy, Berle and Means did not suggest that shareholders become more powerful. They recommended instead that the powers of all groups affected by the corporation be enhanced. “Neither the claims of ownership nor those of control can stand against the paramount interests of the community,” they wrote. “It remains only for the claims of the community to be put forward with clarity and voice.” Executives should become a “purely neutral technocracy, balancing a variety of claims by various groups in the community and assigning each a portion of the income stream on the basis of public policy rather than private cupidity” (New York: Macmillan, 1932), pp. 300, 312.
*
Legal responsibility for the 1996 ValuJet crash was established, but without practical effect: In 1999, a federal jury convicted SabreTech, Inc., the now-defunct maintenance company, of nine felony charges related to its mishandling of the oxygen canisters which led to the crash. A former SabreTech mechanic and a maintenance supervisor were acquitted on all charges. After the verdict, SabreTech’s attorney said the company was a corporate shell with virtually no assets. In 1997, ValuJet merged with another airline.
Introduction

A
FEW YEARS AGO
I had a job that consumed me. I wasn’t addicted to it—“addiction” suggests an irrational attachment, slightly masochistic, compulsive. My problem was that I loved my job and couldn’t get enough of it. Being a member of the President’s cabinet was better than any other job I’d ever had. In the morning, I couldn’t wait to get to the office. At night, I left it reluctantly. Even when I was at home, part of my mind remained at work.

Not surprisingly, all other parts of my life shriveled into a dried raisin. I lost touch with my family, seeing little of my wife or my two sons. I lost contact with old friends. I even began to lose contact with myself—every aspect of myself other than what the job required. Then one evening I phoned home to tell the boys I wouldn’t make it back in time to say good night. I’d already missed five bedtimes in a row. Sam, the younger of the two, said that was O.K., but asked me to wake him up whenever I got home. I explained that I’d be back so late that he would have gone to sleep long before; it was probably better if I saw him the next morning. But he insisted. I asked him why. He said he just wanted to know I was there, at home. To this day, I can’t explain precisely what happened to me at that moment. Yet I suddenly knew I had to leave my job.

After I announced my resignation, I received a number of letters. Most were sympathetic, but a few of my correspondents were angry. They said my quitting sent a terrible message; it suggested that a balanced life was not compatible with a high-powered job. Many women on the fast track were already battling a culture that told them they were sacrificing too much—and here I was, they said, essentially telling people the same thing. Others complained that while it was easy for me to leave my job and find another one that paid about as well while giving me more room for the rest of my life, they didn’t have that choice. They had to work long hours, or the rent wouldn’t get paid and there would be no food on the table. So I was sending the wrong message to people like them, too. Still others wrote to inform me indignantly that I shouldn’t think myself virtuous. Hard work was virtuous, abandoning an important job to spend more time with my family was not.

Perhaps I should have expected that my career decision would carry symbolic weight—I had, after all, been the Secretary of
Labor.
In fact, I’d had no intention whatsoever of sending a message about how other people should lead their lives. Certainly I didn’t think there was anything virtuous about the choice I’d made. But until that time I had been making a different choice, an implicit one, without acknowledging it.
That
was the problem. The wake-up call my son requested was a wake-up call for me to make an explicit choice, and make it consciously.

The experience made me notice a lot of things I hadn’t seen before, even though I’d spent most of my adult life examining work and the economy. It focused my attention on the struggles most of us are having over paid work and the rest of our lives—men as well as women, young people setting out on their careers, middle-aged people who in years past would have already resolved these matters—including choices that sometimes are posed starkly, but more often are subtle, and appear in various guises. And it caused me to want put together what I’ve observed about the large-scale changes occurring in the global economy with these small-scale personal dramas. This book is the result.

I am writing here about making a living and making a life, and why it not only seems to be but actually
is
getting harder to do both. Acres of paper and oceans of ink have been expended in detailing the dizzying exuberance of the emerging economy. Yet there has been almost no discussion about what it means for us as
people,
and about the choices that lie before us for the kinds of lives we wish to lead. The deepest anxieties of this prosperous age concern the erosion of our families, the fragmenting of our communities, and the challenge of keeping our own integrity intact. These anxieties are no less part and parcel of the emerging economy than are its enormous benefits: the wealth, the innovation, the new chances and choices.

My purpose here is to invite a debate that’s larger than the admonition to “slow down and get a life.” To view the struggle for a better balance between paid work and the rest of life only as a personal one, waged in private, is to ignore the larger trends that are tipping the scales. It’s not just a personal choice; not simply a matter of personal balance. It’s also a question of how work is—and should be—organized and rewarded. It’s a question of a balanced society.

The central paradox is this: Most of us are earning more money and living better in material terms than we (or our parents) did a quarter century ago, around the time when some of the technologies on which the new economy is based—the microchip, the personal computer, the Internet—first emerged. You’d think, therefore, that it would be easier, not harder, to attend to the parts of our lives that exist outside paid work. Yet by most measures we’re working longer and more frantically than before, and the time and energy left for our non-working lives are evaporating.

Why should this be? If what we do for pay is making us richer, why are our personal lives growing poorer? Why can’t we dedicate more of our material gains toward making our lives
outside
paid work richer? The British economist John Maynard Keynes, writing in 1930, during the darkest days of the Great Depression, cheerfully predicted that in a hundred years England would be eight times better off economically, so that its people would choose to work only fifteen hours a week. Their material needs satisfied, they would see the love of money as “one of those semi-criminal, semi-pathological propensities” that affluence had cured. Keynes probably will be correct about most people being far better off materially in 2030, but incorrect about their working fewer hours, at least if Britain keeps going the way of the United States, and we keep going the way we have been.

Of course, not everyone is far better off materially than a quarter century ago. Some aren’t better off at all. And many people are working harder because they have to. But here’s the strange thing: The richer you are, the more likely it is that you are putting in long and harried hours at work, even obsessing about it when you’re not doing it. A frenzied work life may or may not make you better off, but being better off definitely seems to carry with it more frenzy.

Consider some counterintuitive statistics: In America, college graduates earn on average 70 to 80 percent more than people with only a high-school diploma, which is twice the premium accorded to a college degree twenty-five years ago. So you might suppose that people who have graduated from college would feel they have to work somewhat less intensely than high-school grads. You’d be wrong, of course. It’s the college-degree holders who are working the longer hours. And maybe you’d also think that, with the college premium having doubled, college students themselves would be somewhat less concerned about being well-off financially than they were twenty-five or thirty years ago. But you’d be wrong about that, too. Surveys show they’re far more focused on financial success than ever before.
1

What’s happened? Have college grads become greedier, more obsessed by money? Maybe, but there’s no good reason to assume so. Has our national character changed in just a few decades? It seems unlikely; the character of a people doesn’t alter so quickly.

The typical American works 350 more hours a year than the typical European, more hours even than the notoriously industrious Japanese. You might then suppose that more Americans would prefer to work a bit less, sacrificing some earnings. But only 8 percent of them say they would prefer fewer hours of work for less pay, compared with 38 percent of Germans, 30 percent of Japanese, and 30 percent of Britons.

Do we have a workaholic gene that the citizens of other advanced nations lack? Or is work so much more satisfying and enjoyable here? Both seem doubtful. We didn’t used to work that much harder than they did, decades ago. Why have we started to?

We hear a rising chorus of American voices resolving to slow down. Yet more of us seem to be speeding up. We say with ever more vehemence that we value family. So why are our families shrinking and family ties fraying—fewer children or no children, fewer marriages, more temporary living arrangements, more subcontracting of family functions to food preparers, therapists, counselors, and child-care givers? We talk more passionately than ever about the virtues of “community.” And yet our communities are fragmenting into enclaves filled with people who earn similar incomes—the wealthier, walled off and gated; the poorer, isolated and ignored.

Are we engaged in mass hypocrisy? Mass delusion? Probably neither. Most Americans seem genuinely to be seeking more balanced lives. The problem is that balance between making a living and making a life is becoming harder to pull off because the logic of the new economy dictates that more attention be paid to work and less to personal life.

Here is my argument, in brief:

The emerging economy is offering unprecedented opportunities, an ever-expanding choice of terrific deals, fabulous products, good investments, and great jobs for people with the right talents and skills. Never before in human history have so many had access to so much so easily.

Technology is the motor. In communications, transportation, and information-processing, the new technologies that gained momentum in the 1980s and 1990s are now racing ahead at blinding speed. They are making it easier to find and get better deals from anywhere and allowing us to switch instantly to even better ones. These technologies are radically sharpening competition among sellers, which in turn is provoking a staggering wave of innovation. In order to survive, all organizations must dramatically and continuously improve—cutting costs, adding value, creating new products. The result of this tumult is higher productivity—better, faster, cheaper products and services of every description.

Economically, all of this is to our great and unequivocal benefit. But what it means for the rest of our lives—the parts that depend on firm relationships, continuity, and stability—is acutely problematic. There’s no diabolical plot here, no trap cunningly devised by evil corporations and greedy capitalists. It’s a matter of straightforward logic.

The easier it is for us as
buyers
to switch to something better, the harder we as
sellers
have to scramble in order to keep every customer, hold every client, seize every opportunity, get every contract. As a result, our lives are more and more frenzied.

The faster the economy
changes
—with new innovations and opportunities engendering faster switches by customers and investors in response—the harder it is for people to be confident of
what any of us will earn
next year or even next month, what they will be doing, where they will be doing it. As a result, our lives are less predictable.

The more intense the competition to offer better products and services, the greater the demand for people with insights and ideas about how to do so. And because the demand for such people is growing faster than the supply, their earnings are pushed
upward.
Yet the same competition is pushing
downward
the pay of people doing routine work that can be done faster and cheaper by hardware and software, or by workers elsewhere around the world. As a result, disparities in earnings are growing steadily larger.

Finally, the wider the choices and easier the switches, the less difficult it is for people to
link up
with others who are just as well educated, wealthy, and healthy as they are—within residential communities, businesses, schools, universities, and insurance groups. And the easier it is for them to
exclude
the slower, less educated, poorer, sicker, or otherwise more disadvantaged, all of whom have greater needs. As a result, our society is becoming more fragmented.

In short, rewards of the new economy are coming at the price of lives that are more frenzied, less secure, more economically divergent, more socially stratified. As buyers switch more easily to better deals, all of us have little choice but to work harder to satisfy buyers. As our earnings become less predictable, we leap at every chance to make hay while the sun shines. As the stakes rise—toward greater wealth or relative poverty, highly desirable communities or patently undesirable ones—we’ll do whatever we can to be in the winner’s circle and to get our children safely there as well.

For all these reasons, most of us are working harder and more frantically than we did decades ago when these trends were just beginning, and than do citizens of other modern nations where these trends are not as far along.

The price may be worth it. The terrific deals are benefiting all of us in myriad ways. But even if the price is acceptable today, will it still be worth it in the future as the stakes continue to rise?

There is, undeniably, much to celebrate about the new economy. American capitalism is triumphant all over the world, and with good reason. Neo-Luddites who claim that advancing technologies will eliminate jobs and relegate most of us to poverty are wrong, even silly. Isolationists and xenophobes who want to put up the gates and reduce trade and immigration are misguided, often dangerously so. Paranoid populists who say global corporations and international capitalists are conspiring against us are deluded, possibly hallucinating. We—you and I and most Americans—are benefiting mightily from the new economy. We are reaping the gains of its new inventions, its lower prices, its fierce competition. We are profiting from the terrific deals it’s offering us as consumers, and to a large and growing portion of us as investors. We are driving the new economy forward.

And yet .         .         . As wondrous as the new economy is, we are also losing parts of our lives to it—aspects of our family lives, our friendships, our communities, ourselves. These losses closely parallel the benefits we’re gaining. In an important sense, they are two sides of the same coin. And as the new economy accelerates, both the gains and the losses are likely to increase. Working ever harder in order to compete within a system where competition is growing fiercer; selling ourselves with increasing determination within a system that’s turning almost everyone into a self-promoter; sorting by wealth, education, and health in a system that’s making it ever easier to sort—these phenomena are self-propelling. The more people join in, the more imbalanced the situation becomes, and the harder it becomes for any individual to choose a different path.

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