An economy beyond jobs: the new normal

businessman in suit with laptop on beach

With more people losing full-time jobs, can't the unemployed just create their own dream careers as wired freelancers?

In his speech on jobs this Thursday night, President Obama will surely try to win back the six out of ten Americans who think he’s handled the economy badly. And he’ll probably offer some ideas to pump capital into the economy and create jobs, naturally watered down to offer as little offense as possible to the Tea Party and the US Chamber of Commerce.

But given that the US may soon reach the permanent end of economic growth, it’s unlikely that Obama will have anything of substance to offer the 16.2% of workers now without full-time jobs.

Those workers, whose ranks are growing weekly, can only realistically look forward to one kind of future: an economy beyond employment.

The history of jobs

It’s easy to forget that jobs as we know them today — 40 hours clocked at an office, factory, hospital or school in exchange for a guaranteed annual salary with health insurance, paid time off and a retirement plan — are relatively new in the history of human economies.

Before the middle of the nineteenth century, most adults (and many children) worked on farms and in small family-run workshops or retail stores. People may have worked longer or shorter hours than we do, but in the old days work time was often hard to separate from time spent with family on domestic chores.

More importantly, even adjusting for inflation, the farmers, craftsmen and merchants of yore made much less money by far than modern people do. Luckily for them, they didn’t need money as much as we do.

Today, we take it for granted that you can’t live without an income. But prior to the Industrial Revolution, as Dmitry Orlov has ably explained, people in Europe and North America got most of what they needed from family and neighbors as gifts or barter. The market was only a small corner of the overall economy, a club hosting a few merchants mostly trading in import items like spices from the East Indies bought by the rich.

So, if humans were able to feed and clothe themselves, heat their homes and maintain public order without much use of money, it stands to reason that they didn’t miss the employment they never had in a market economy most of them never knew.

Modern workers may not be ready to live without money, but if we’re going to learn from this history, can we find some way to earn the cash we need to cover the mortgage without getting it all from a single employer?

Freelance Nation

“We’ve seen a steady erosion of the American dream as an ’employment dream’ as more and more jobs (of higher and higher skill levels) move offshore, as companies become ‘lean,’ and as real wages steadily erode,” explains author Richard Hooker, who writes about the Post-Employment Economy. “The current recession, in fact, has been preceded by a decade or more of growing underemployment and three decades of rapidly increasing employment volatility. In fact, the current recession is primarily busting the employment dream [through] underemployment rather than layoffs.”

If an economy beyond employment is our natural future, then the Freelancers Union thinks we’ll all be joining them soon.

Just as workers 150 years ago began a large-scale shift from farms to factories, so today’s salarymen are beginning a transition just as momentous from full-time jobs to running their own consulting businesses from home, “leaving the cubicle for the coffee shop,” as Freelancers Union founder Sara Horowitz puts it:

Welcome to the Gig Economy, where over 42 million Americans are working independently – as freelancers, part-timers, consultants, contractors, and the self-employed. They are simultaneously holding multiple jobs, working for different employers, and mastering diverse skills. They are accountants and fashion designers and website architects.

As exciting as it may be for freelancers to be their own bosses, Horowitz doesn’t think that they should also have to sacrifice healthcare, unemployment benefits and guaranteed payment for their work. So she proposes an updated version of the New Deal that would offer freelance workers discounts on health insurance along with the ability to pay into self-funded unemployment accounts that they could later draw on when workflow becomes lean. She even thinks that her organization can give freelancers the clout with government that labor unions used to give to employees who worked for the Man.

While useful in the short run for consultants (and since I run a online marketing business, I count myself as one of their number), in the long-term trying to improve the lot of freelancers may prove to be the employment equivalent of rearranging deck chairs on the Titanic.

Turning Dilbert into Zig Ziglar

The cultural change required to convert office workers trained to follow orders into aggressive hustlers of new clients is daunting. And that’s just the first hurdle to entrepreneurial nirvana in the Gig Economy.

A bigger issue is that if too many more of us become consultants, there won’t be enough clients to go around.

Even if you believe in a future of endless economic growth, letting corporations lead the US economy down the path of “dematerialization” — replacing manufacturing with services — can’t go on much longer. Pretty soon, America’s knowledge workers won’t be able to write enough software, film enough Hollywood movies and process enough stock trades to pay the Chinese to keep making our car parts, microwave ovens and tennis shoes.

A country that demands a quarter of the world’s energy and other resources along with mountains of consumer goods won’t be able to keep its lifestyle going on the backs of webdesigners, professional Tweeters and wired medical transcribers alone.

If we want to have any hope of maintaining even a semblance of a First World lifestyle, America is going to need to stop closing factories and start opening them back up again right now, as the sensible folks at the Alliance for American Manufacturing have been telling us for years.

But even if the chances of it happening anytime soon weren’t vanishingly small, rebuilding our manufacturing base still wouldn’t be enough to bring back 1990s-style prosperity in the face of the new reality of Peak Everything — shortages of essential natural resources from oil to fish to drinking water — and especially the peak debt that’s stalled economic growth for now and the peak oil that will soon stop growth permanently.

You can’t have infinite economic growth on a finite planet, as ecological economists like to say.

(See Richard Heinberg explain why we may have reached the end of economic growth.)

More local and less techy

The peaking of world oil production and those other resources will likely bring corporate globalization to a halt very soon, as economist Jeff Rubin has explained in Why Your World is About to Get a Whole Lot Smaller: Oil and the End of Globalization.

As transportation and materials costs begin to outweigh any savings from making blenders in Shenzhen to sell to cooks in Savannah, manufacturing will be forced to come back closer to home. And if that makes costs higher than shoppers will pay for some items, then those consumers will just have to do without.

Given the economics of the high tech industry, iPhones, tablet computers and wireless inkjet printers are some of the items that companies may not be able to make and sell cheaply in a more localized economy that also suffers from stagnant or even negative economic growth. Doubling or tripling the cost of home-office technology alone would put most freelancers out of business.

In a future with less credit, less capital and fewer jobs, the economy will be much more devoted to providing basic needs — food, shelter, basic clothing and security, acute medical care — than it is today. Expect the demand for farmers, low-tech community healers and security guards to go up. But with fewer businesses selling luxuries like travel, toys and consumer electronics, the need for product designers, accountants or technical writers is sure to drop. Yet another nail in the coffin of the Gig Economy.

The Web is always with us. Right?

Finally, let’s consider what most people would think to be a true doomsday scenario. We’ve all heard how much power it takes to run the Internet. And that goes far beyond the few kilowatt hours used by the cable modem or the wireless router that you can see next to your desk.

What you can’t see is that massive data centers run by Google, Facebook, and others around the world keep the Web always on. But because data centers in the US alone use about 1.5% of America’s total electricity consumption, more than all our TVs put together, today’s Internet is made possible by today’s cheap electricity. So what happens when rising prices for the fuels that keep power plants running — coal, natural gas and uranium — make power-hungry data centers too expensive to run?

The tech industry, bless ’em, is already racing against the clock with a heroic effort to build and source solar and wind power while there’s still time through initiatives such as Google Green or Bill Gates’s American Energy Innovation Council.

But if clean energy turns out to be too little, too late, as Heinberg has predicted, then it may be game-over for the Internet as we know it. As with air travel or cell phone service, in an economy limping along on depleting energy that’s only getting more pricier by the year, a limited version of the Web might still be available to government, the military and the wealthy. But that will be cold comfort to the freelancer who can no longer count on free Wi Fi at her local java joint.

Putting the “free” back in freelance

Though exchanging cubicle for coffee shop may deliver income in the short-term, given peak oil, the long-term prospects of freelance consulting are dim. Gaining true resilience in the new economy beyond jobs and economic growth will require us all to look for ways to make do with less money and to wean ourselves, slowly or quickly, from the market economy.

That will mean doing more things for ourselves at home — growing our own food but also darning our own socks — while also seeking more help from our neighbors.

Now, if Obama were to tell the American public on Thursday night to forget about economic recovery; to prepare to lose their jobs if they still had them and to forget about finding new ones; to stop counting on any help from public assistance; and to start living on half the money they used to make by learning to barter for bread and milk, then he’d be lucky if Joe Biden didn’t have the locks on the Oval Office changed by morning.

But that doesn’t mean it isn’t true.

— Erik Curren, Transition Voice

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  1. Auntiegrav says

    This article is very timely and important. It has a direct correlation to someone going off the electrical grid.The first step is conservation, so that you don’t need to invest and maintain as much generating power.
    The first step in living without jobs is reductionism, frugality, etc., so that the ‘lean times’ aren’t much different than the rich times. Stress comes from worrying about losing stuff. Security comes from not needing it. Unfortunately for most people, the reduction is forced upon them without notice, and they are unprepared. In fact, being frugal and living minimally is still frowned upon and criticized (especially in gated communities or high-end suburbs). Social cooperation must be carefully worded to avoid “socialism” or “commune”.

    Most of the industrialized world’s jobs are people doing and making things that nobody really needs in order to have money to buy things they don’t really need. (Human beings don’t need roads: cars do.)

    That is the basis of the consumer economy.

    The other side of the coin is that what we do should be creating resources, not destroying them. “The opposite of consumption is not frugality, it’s generosity.” -Raj Patel
    Humans have to learn to give more than they receive (to the future universe, not just to each other).

    This concept negates the fear of ‘perpetual growth’ because it takes consideration of ALL of our actions (including reproduction) into account. You can’t be creating more resources for the future if you are busy making babies that are going to consume more of it than they add to it.

    Jobs are a small piece of the consumption mentality, and they are especially beneficial to those who exploit workers by convincing them they are getting paid what they are ‘worth’, even as those same workers see the wealth they create for their employer being squandered on yachts and shiny, noisy crap.

    • Erik Curren says

      It’s funny that since the recession began in 2008, many factors measuring environmental quality have improved. We certainly are using less energy. So businesses closing their doors and laying off workers is tough for us all now. But the decline of the industrial economy could be the best thing for the future survival of our species.

  2. Sunny says

    Wow, that was depressing. Especially for someone who’s finishing up her masters and hoping to start a new career. If only there was money to be made in finding new ways to coax people into facing reality.

    • Erik Curren says

      We always think that too about facing reality — why does all the money seem to be in working for big corporations or doing things like producing tar sands or making plastic junk in China?

      • says

        Because the nature of money is to encourage consumption and abstract obligations. Layer on top of that legal structures which favor consolidation of capital ad further abstraction of derivative structures of money flow and you can easily get all sorts of maldistribution of resources.


    • says

      Sunny, it is only depressing if you hold on to the (outdated) belief that the only way you can have a successful career and achieve fulfillment, is via employment. This is totally untrue and in fact the professionals who are really thriving today are pursuing a different direction.

  3. says

    All good thoughts, although i think the premises do not necessarily lead to as gloomy a conclusion as the one you advocate. Doubling or tripling cost of home technology will likely lead to creation of other technology that is affordable – or application of process and technology in a way that keeps costs where they must be to ensure productivity. also, i, for one, am happy to work towards the return of a kind of personal “renaissance” – where productivity (producing services in exchange for $ or otherwise) isn’t constrained by artificial 9-5 Mon-Fri brackets encouraged by the industrial revolution (and subsequent workers movement). the-end-of-the-internet-as-we-know-it may not be a bad thing – after all, we find time and time again that we actually know very little, so what we learn after the-end-of-the-internet-as-we-know-it may just be the-start-of-the-internet-as-we-can’t-possibly-imagine-and-maybe-even-better ;).

    • says

      Ilya, you could be right! Maybe we’ll see some different kind of internet in the future and that if we’re smart that it could be better for freelancers. And of course all the entrepreneurs who are starting local, small-scale sustainable businesses from food to retail to services are freelancers in a way as well. And there seems to be a great future in that.

  4. cindy birdwise says

    Perhaps transition is a state of mind based on experiences gathered throughout a lifetime. Today I need a position that will enable me to be creative while respecting the way my disabilities affect my outlook. I am a field based zoologist previously living and working in northern isolated boreal forests and arctic sites. Each year brings more transitions as my disabilities become more severe so I find different ways to effectively communicate my ideas regarding climate change, sustainability and lifelong learning. Some of my efforts have been paid for, others have been volunteered and some come via a barter system. I am seeking a forward thinking libertarian to study with me on a PhD in love, peace and harmony based on the traditional teachings of First Nation peoples. Life changes as we dance upon the earth, laughiing out loud with our friends and families while we seek to make sense of the newer harmonics in every part of our lives. I learned about six sigma, organizational learning and living through college and university and living in the wilds. I think we need to move with a light hearted beat embracing change as Margaret Wheatly writes about the images in computer generated data or fuzzy logic in Japanese trains. I think we may work in well grouped communities with green houses, farming, building, fibre optic capable connections with each location offering its specialities to other locations. Life is truly what we make of it.

    • says

      Cindy, I resonate strongly with everything you wrote. I do want to add that it is possible to add a conscious, spiritually based entrepreneurial model into the mix so that it works financially as well.

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