Worker at Amazon fulfillment center.
Work isn’t what it used to be, and millennials are paying the price.
No marker is a better indicator of the changing world millennials are inheriting than statistics about the American dream ― the belief that children will be better off than their parents: not just more financially secure, but also happier, better educated, and more secure overall as a result.
Across the twentieth century, that dream seemed to match up with reality. Americans born in 1940 had a 90% chance of earning more than their parents once they were at prime working age. That isn’t surprising: during the era from the end of World War II to the late 1970s, growth in per capita gross domestic product and productivity went hand-in-hand with growth in real earnings.
That situation changed immensely in the late 1970s. While the economy kept growing, real earnings weren’t tracking upward with it. And along with that disconnect between economic growth and earnings there came a change in the prospects for children in the new era. Those born in 1980 ― just a few years before the official beginning of millennials, but a sure sign of challenges just ahead ― face a coin-toss chance of doing better than their parents. That’s a drop from 90 percent to 50 percent in a stunningly short window of economic history. This dramatic decrease in “absolute income mobility” (as economists call it) provides the sobering reality that Michael Hobbes evocatively describes in his HuffPost Highline story “FML”:
“From job security to the social safety net, all the structures that insulate us from ruin are eroding. And the opportunities leading to a middle-class life… are being lifted out of our reach. Add it all up and it’s no surprise that we’re the first generation in modern history to end up poorer than our parents.”
One reason for these changes is the emergence of “the fissured workplace.” Very often, today’s workplace is no longer a traditional brick-and-mortar company owned and operated by a single employer. Rather, different job functions are handled by masses of temp workers, contractors and subcontractors. This has caused the employment relationship to “fissure” apart. And, as in geology, once fissures begin, they only deepen: Once a position like in-house janitorial services is eliminated, the secondary businesses that pick up that work deepen the fissures even further, often shifting those activities to still other businesses.
Fissuring has spread pervasively and rapidly. Top labor economists predict that 94 percent of net employment growth between 2005 and 2015 occurred in fissured workplace arrangements ― independent contracting, staffing and temp agencies, on-call workers and such. And while early waves of those shifts were concentrated in low-wage jobs, the practice has crept into occupations with much higher educational requirements: journalism and publishing, information technology, academia, even medicine and law. Though ostensibly associated with greater agility and flexibility for workers, the actual impact of these employment relationships, across many sectors, result in lower and more inconsistent earnings, greater turbulence in employment, less access to benefits, and, as Hobbes notes, more risk put on workers and lifted off of the organizations employing or contracting with them.
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What’s even more difficult for entry-level workers in today’s workforce is that these employment transformations erode social networks that are often serve as the lifeblood of career advancement. If you worked at Kodak or Xerox in days past, you could climb internal job ladders that would help you up the organizational levels and give you skills that might translate into employment elsewhere. Today’s contractor working a short stint for Apple or Amazon mainly just gives you access to your contractor. In some companies, contractors even have to wear different-colored identification tags to highlight that distinction — a practice some see as a kind of branding of a caste-system.
The rise of the fissured workplace has had enormous impact on millennials, leading to an economic outlook that’s vastly different from previous generations. If we are to resolve this issue, the challenges that lie ahead will require us to craft new social policies that reflect the transformed world in which people work and try to earn a living.