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Out of Work: Opportunities and Risks

April 1, 2014

Category: Society > Government and Politics

A companion essay posited that America may be rapidly transitioning toward an economy in which two-thirds or more of its citizens are non-working. The national labor pool is being squeezed by automation, outsourcing, and immigration. Labor-market-entering youth are unqualified for available jobs. The ranks of retirees are swiftly swelling. If this near-term scenario is plausible, what public-policy challenges might be generated by this seismic socioeconomic shift?

It’s not difficult to anticipate positive opportunities:

Much manual labor (and desk work too) is numbingly repetitive. In part due to this same routine, some is dangerous. These jobs are the ones most substitutable by automation. Liberating these workers could improve their physical and mental health, reducing national medical costs as a bonus. If working parents could spend more time at home, their kids’ educational performance and safety might benefit.
Non-working Americans of all ages might flourish, contribute to society, and find fulfillment away from the workplace in community service, volunteering, life-long learning, recreation, and travel. A leisure-time boom might spark new remunerative opportunities for entrepreneurs, trainers, elder-aides, and tour guides.
America could take a leaf from FDR’s book and invest laid-off human capital in national service, especially given the dilapidated condition of physical infrastructure and increasing damage from climate change.
Reduced national dependence on work could stimulate innovative attention to societal spacing and schedules. Consider, for example, the diminished relevance of commuting, central business districts, and weekends.
Education too could benefit from catching up with evolving economic realities. STEM competencies and enthusiasm might be vigorously promoted in primary and secondary schools.

Of course, it would be disingenuous to herald transition opportunities without acknowledging grave countervailing risks:

If a resentful majority perceived jobs, wealth, and privilege to accrue inequitably to “the 1%,” larger rocks might be hurled at Silicon Valley commuter buses. Widening inequality might enable the super-rich to consolidate control of the political process, lurching further toward oligarchy.
American culture defines work as worth. U.S. professionals are hard-wired to derive status and self-esteem from careers. For blue-collar laborers, “earning a living” carries moral weight. Might not permanent downsizing induce chronic depression and substance abuse?

A core conundrum links opportunities to risks. Who’s going to pay the bills? How could a largely post-employment economy support the non-working majority’s health, education, welfare, and leisure, not to mention governmental services from defense to public safety? (82% of the Federal Budget is currently financed by payroll and personal income taxes.)

One logical source of revenue, already being emulated by some states, could be an adaptation of Norway’s Sovereign Wealth Fund, capturing and investing a public share of America’s oil-and-gas bonanza. Other low-hanging fruit for the Treasury could include American multinationals’ profits parked offshore. If social unrest became sufficiently destabilizing, threatened elites might accept higher corporate-income, capital-gains, and wealth taxes as the price of domestic tranquility.

This array of policy challenges and responses only scratches the surface. But if America is indeed transitioning out of work, it’s not premature to be considering consequences.