Post-Covid Economics
There have been profound economic shifts since the COVID-19 pandemic, emphasizing changes in inflation, globalization, labor dynamics, and corporate roles.
Table of contents
Two things will change an economy overnight: War and Disease. Covid-19 has radically altered the global economy, and a variety of trends have changed the economy, the workforce, and much more. The American economy is different than it was a few years ago. These changes are dramatic and hard to navigate, contributing to the post-COVID malaise of the economy. Post-Covid economics will affect everyone for the remainder of the 2020s.
Inflation and You
Over the past three years, currencies, notably the US Dollar, snapped from deflationary pressures during the pandemic shutdowns to crushing inflation that can be as high as fifteen percent (if you keep food and fuel in the calculations). However, most people don’t need economic data to understand inflation. It is everywhere, from the grocery store shelves to car prices. The Federal Reserve is assiduously trying to tame inflation but is having little success due to the natural causes of inflation.
Inflation hawks are not incorrect when they say that printing too much money devalues the currency over the long term. The US enjoyed low inflation for years. The Fed kept inflation at a modest two percent, and in some cases, the deflationary pressures on the dollar were so bad that the Fed printed money to prevent the financial system from seizing. Deflation was such that all the money spent in 2008 to stop-gap the failing economic system caused no appreciable inflation.
During the Pandemic, we have not been so lucky. Not only has the government put money in the hands of people, but it has also put money in the hands of companies through PPP loans and massive government spending on personal protective equipment, among other things. This amounted to a five trillion dollar splash of cash into the economy that followed a decade of cheap and easy money following the 2008 crisis. Given the constraints on demand for two years, inflation was bound to increase as that demand sought satisfaction in goods and services.
A renaissance in American manufacturing is also causing inflation. President Biden made it his mission to revive the American factory, which had already begun. Ultimately, inflation isn’t going anywhere soon, and that is due to a complete reordering of the global economy.
The Death Knell of Globalization
As if the world didn’t need more problems, Vladimir Putin decided that now would be an excellent time to attempt to restart the Russian Empire under his reign. His war, beginning in 2022, has shaken global markets and has marked the end of globalization as we know it. As much as I don’t always agree with geopolitical strategist Peter Zeihan, he is right about one thing: globalization requires a stable security environment, which we simply do not have. As the political theorist Samuel Huntington predicted during the end of the Soviet Union, we are moving to a multi-polar world where there will likely be minor conflicts around the globe over land and resources. Indeed, this world existed before World War I, and our global environment has returned to the mean.
Economically, this means that many of the conveniences we have become used to having over the past 40-50 years aren’t going to be around anymore. Consumer goods have gotten dramatically cheaper since 1975, and that trend will end. Crucially, the sanctions against Russia and the ongoing war in Ukraine have caused shortages in fertilizer. Getting natural gas to Europe by ship is far longer and more expensive than bringing it in my pipeline from Russia. Europe should have had an energy crisis in the winter of 2022-2023 but was saved by mild weather throughout the continent. They may not be so lucky in 2023-2024.
The US tensions with China are another factor in the death of globalization. Bringing China into the World Trade Organization in 2000 was the lynchpin of modern globalization. China’s ability to provide cheaper labor to make the world’s goods pushed prices downward and created large trade imbalances. China bought very little from the West and sold all the goods it could stand to take from its European and American counterparts. Thanks to COVID-19 and tensions over Taiwan, the world's two largest economies are diverging from one another. American companies are looking to reshore manufacturing, which was lost 20 years ago. Much of this will return to the US, and some will go to Canada and Mexico. This will make North America a powerhouse economically, but this also means that there will be greater opportunity for sparring between China and the United States in the Pacific theater. Geographically, closer countries are already preparing for the new dynamic. In 2023, Japan announced increased defense spending and a military posture not seen since World War II.
Economic Hurricane
To the average person, it might seem like not much works well in the post-pandemic environment. This is not far off. Three years on, supply chain issues continue to plague the world economy, particularly in the auto sector. Chip shortages remain for many goods, and the shortage of labor means that getting service in areas from Government to Retail can be difficult. China’s insistence and subsequent abandonment of zero COVID-19 plugged up the trade pipes for a year longer than much of the world.
The reality is all of this is an economic hurricane. Labor shortages are leading to higher wages; companies are price gouging by raising prices to pad their profits (53% in 2021, according to Bloomberg), and commodities prices continue to rise. Everything is going up in price; most people's household budgets are squeezed, and this shows no sign of letting up anytime soon.
The labor situation, in particular, isn’t going anywhere anytime soon. The Pandemic triggered a wave of retirements. According to Peter Zeihan, the Baby Boomers have nearly left the workforce. The youngest are hitting retirement age, leaving Gen X, Millennials, and Gen Z to pick up the slack. People are moving jobs around looking for better pay benefits or work-from-home flexibility, and with the Boomers gone, a wealth of knowledge and skills have gone with them, and it will take some time for that to be replaced. This is combined with the people who are simply missing from the workforce. There are still over 10 million prime-age working men missing from the workforce. The total labor force participation rate is 61%, rising from 58% before the pandemic (Federal Reserve numbers).
Corporations as a Social Utility
Corporations proved over the pandemic that they are essential to keep society running, and when they have issues, they reverberate throughout the entire economy. It’s not merely in jobs but also in keeping shelves stocked. The labor movement has also seen a resurgence in the post-COVID environment, with workers demanding better wages, healthcare, and pay. The railroad workers nearly went on strike until President Biden intervened, and Congress stopped them from striking for fear the entire economy would collapse.
Part of the problem is the concentration of corporate monopolies. If the market were more dynamic and there were more companies and competition, the failure of any single company would not be a death knell for the entire economy. However, due to a lack of anti-trust regulation, mergers have reduced railroads from a dozen to only four major railroads. This trend has affected nearly every industry, from telecoms to grocery stores. With all the concentration among major corporations, any system failure meant failures everywhere. These failures were so apparent during the pandemic. In this way, we are both beholden to these corporations for essential goods and services while also nearly powerless to stop them from doing whatever they wish to do to grow and please shareholders.
The dynamic between the American people and her corporations, which I lovingly call the new aristocracy, has also entered the political realm. Ron DeSantis has made a national profile of himself for sparring with Disney as well as other companies in Florida over their views on LGBT issues that he stands against and has legislated regarding. The 2023 incident between Bud Light and its new advertising campaign featuring trans influencer Dylan Mulvaney triggered a nationwide boycott that cost its parent company billions. Corporations, in their all-encompassing role, are at the crossroads of politics and public opinion.
ESG (environmental, social, and governance) investing is where the debate over climate change and the world’s companies also meet. Companies must play a big part in reducing carbon emissions and achieving the goal of net zero carbon emissions by 2050. In addition, ESG also calls for companies to improve how they impact society with better diversity and better relationships with all stakeholders in the company. Warren Buffett has remarked that he has no use for ESG scores or investing on that basis. ESG investors have been successful at earning seats on the boards of oil companies like Exxon Mobil, hoping they can lead the charge at reducing production emissions and moving those companies away from fossil fuels as a primary business. In the context of making money, this all might seem somewhat counterintuitive.
The waters are muddy in the debate over whether corporations can serve a public good or are a social utility. A company’s primary goal is to make money for shareholders. Still, this goal often gets in the way of other matters within society because Corporations have become such an essential driver in society. They determine what we wear, what we buy, where we buy, and how much we pay. They are arbiters of culture, whether intentionally or not.
Labor, Strikes, and Work-From-Home
The nature of work has changed. The Covid-19 pandemic shook up the entire system. Displaced people in the service industry took new opportunities, which have left hospitality and restaurants desperate for workers. People lost jobs, careers, businesses, and much more. People have gone back to school and gotten new skills. Mass retirements among the Baby Boomers have finally let Gen X and Millennials move up the corporate ladder. Work-from-home has become a negotiation point, and the fight over compensation has been decidedly on the side of the workers for the first time in 45 years. All of these changes have created a new culture of work and employment.
The Great Resignation
Before was quiet quitting in the US, China was already on the case with the “lay flat” and “let it rot” movements. China is an overworked society, with some people working on the brutal 9-9-6 schedule. Chinese people have labored under terrible conditions for decades, but younger Chinese workers are finally giving up. Work slowdowns and simply stopping work altogether or working very little has swept across the country. It should be no surprise that people cannot live by working alone. Having leisure time outside of work (as we know it) is vital. We have to be human before any other consideration.
The big trend in work right now is trying to rediscover living instead of simply living to work. People have discovered that there is more to life than work, and this is particularly acute among Gen Z. Americans who found out what it was like to live and just work, hoping for two days of precious freedom that personal tasks would dominate. The Chinese have led the world with their lay flat movement. The constant drive to achieve, grow, and build the world and economy is not as compelling as it once was to people. The seeming lack of drive in workers today has nothing to do with humans being suddenly lazier but has much to do with the rise in inequality. Even in China, a regime that is supposed to be more egalitarian than its Western peers, inequality has skyrocketed at least as fast as it has in the West. Wealth is getting concentrated in the hands of the few, so much so Xi Jinping has been cracking down on people paying taxes since 2019.
Ultimately, the system of working for 30 or 40 years to enjoy 10-20 years of retirement, albeit in poor health due to age, just doesn’t have appeal anymore. And why should it have any appeal? It’s a great deal for companies and employers but a bum deal for workers. People would like to live their lives now, and the reality is that work-from-home and its appeal is the ability to avoid a commute and have a more flexible schedule. In an article on May 25, 2023, Bloomberg reported that “workers don’t hate the office; they hate the commute.”
Work From Home Forever
2011, I was standing at a Barnes and Noble bookstore in my hometown. I had seen this bookstore being built when I was a kid. It was where I joined my first writing group and where I painfully wrote my first fictional pieces. This time, I returned to buy some magazines, and the cashier asked me what I did for a living. I answered, “Freelance Writer.” That wasn’t quite right, but it was close enough. She asked me how that worked, and I explained that people online hired me to write content for them or do transcription/dictation. We talked about the nature of work, and at the end of the exchange, I said, “In 10 years, more people will work like I do than work like you do.” And thanks to COVID-19, my prediction has basically come true.
Since the pandemic, there has been a fall in worker productivity. This concerns Boomers retiring and people leaving the workforce due to disability or starting their own business. This has created an environment where wages are beginning to rise for the first time in decades. However, wages have a long way to go to catch up to where they should be given productivity. Some people blame the lack of productivity on people working from home, but the picture is much better than that, as witnessed by a video I posted to The Cameron Journal from the Wall Street Journal. And our changing attitudes toward work, wages, and what it means to live in society.
It is important to note that the work-from-home trend does not affect many jobs like retail, food, maintenance, construction, manufacturing, trades, and more. The work-from-home trend disparately affects those who work in offices and support those industries. The difference between this is a sharp class divide that was exposed during the pandemic. The narrative might be about “people staying home,” but that was not true for most working-class Americans. It was a distinctly middle, upper-middle, and wealthy class phenomenon.
The idea of working from home or remotely in an office is not new. Still, until the advent of the internet, it was reserved for the leisure executive who could employ a dozen people and three phone lines to make it possible. Thanks to the internet, wi-fi networks, and laptops, software programmers, web designers, and others could work essentially from anywhere. I was a part of what Louie C.K. once dismissively called “laptopistan,” one of those nervous people sitting at a coffee shop, hunched over a laptop, pecking away at the keys on some project.
One of the principal effects of the pandemic is the changes in work. Office workers learned how to use Zoom, have meetings digitally, and suddenly have to learn digital collaboration tools. The second wave of the Delta variant is reviving these tools again. Just as companies prepared to get everyone back in the office, many sent people back home or canceled and delayed plans.
Many bold predictions were made about how COVID-19 would change work. This spring and summer, managers and executives pressured workers to return to the office. Instead of returning, many quit and moved to other jobs with more flexibility. Still, other companies offered more flexible work-from-home options with limited time in the office.
Workers have made it clear that they have gotten used to working from home and are much less eager to return to the office than their managers would like them to be. This has broader economic effects as well. There is a whole economy that depends on people commuting to work. If people stay home, they may not need more than one car. People who sell lunch in business parks and downtown areas will find fewer customers. Mass transit systems will see fewer riders. Companies will reduce their commercial footprint, leading to more buildings getting converted or torn down. This means there will be fewer support staff in janitorial as well. This change has vast economic effects across both the government and private sectors.
Work-from-home forever has economic impacts in the other direction as well. As we say, in the early pandemic, people moved out of cities to get more space for home offices, and Amazon couldn’t fill the orders for office chairs, desks, and other work-from-home equipment fast enough. Many of our future remote workers will want dedicated home office space, meaning home builders may wish to update their home layouts to accommodate this new need for space. Suburban cities will benefit from these workers because people will spend money closer to home. Some suburbs are already building urban-like town centers where people can gather and enjoy activities. The big city may no longer be the only place to enjoy a great meal, entertainment, or meet friends.
The New Contractor
In the pre-pandemic world, many futurists thought that future workers would likely not work in an office as more work could be done anywhere. This is not true for true service jobs that interact with the public, but it is undoubtedly true for much of the administration it takes to keep companies going.
This corresponds with another trend in various industries: hiring more contractors than employees. Soon, we might see more and more people working as contractors without benefits for companies far from where they live. As things like health insurance and unemployment are tied to regular W-2 employment, this will have a massive social impact.
The new contractor might perform specific tasks for a reasonable hourly rate but can be let go at the end of their contract term and not get any benefits while working for the company that contracted them. Much like janitorial and food services, temp companies could find a new market for everything from copywriters and marketing professionals to programmers and others. Companies can realize the benefits of offshoring without all the cultural and linguistic problems of moving jobs overseas. Companies could export their expensive coastal labor force to Iowa.
Remote Teams and Remote Tools
For businesses, having the correct remote teams and remote tools management will be crucial to creating a productive work-from-home environment. Productivity did not drop during the pandemic, and in many cases, it increased. However, workers often found that they worked nearly 24/7, and an expectation of availability must be managed. Workers clocked longer hours as commuting time became productivity time. Creating a space between personal time and work time was already a problem before the pandemic, and if companies are going to continue the trend, then this problem needs to be managed.
Using the right tools to manage digital collaboration will be crucial to the success of work-from-home staffing. This goes beyond an enterprise Zoom account and some Google tools. Things like an XML to JSON editor are essential to keep the workflow moving forward. There are security concerns to be managed. In the future, companies may need to compensate employees for using their own devices or choose to send out dedicated machines that are safer for the distributed networks required to keep everyone on the same page. Companies will be leaning on IT departments to deploy and maintain these solutions.
Team cohesion and social events will have to be managed as well. With a distributed team, it will be hard to have casual conversations that can spark new ideas or help people get to know and trust each other. New solutions will be required to help teams work together effectively. Everyone is scrambling for these new solutions. Whoever can create a system to solve these problems will become a star in the field. Can Slack recreate the casual conversation and “water-cooler” moments? What about employees only using social networks or social media groups? Companies will try out various ideas as we continue working from home.
Working from home has many opportunities for companies that can deploy their human resources like this, but it also presents various challenges for an entire organization. However, it won’t take much to help make working from home a way of life. Given how things are going with the pandemic, most companies must be adept at using tools and creating positive distributed working arrangements. The economy will likely be adapting to this new reality. This situation would have happened over the next decade, but as so many people, like Scott Galloway and others, have said, every problem we thought we would have in 2030 is a problem we have now.
The New Globalization
One of the hallmarks of a variety of Southeast Asian countries and several countries in Europe is that young people often take jobs overseas to gain experience and make money. There is an old Irish joke about how Ireland’s greatest export is its young people because of the lack of jobs at home.
Forbes reports that young American graduates are increasingly taking a global approach to starting their careers and are looking overseas for opportunities to jump-start their careers. In 2012, there was a great story in the Washington Post about how the number of Americans looking for jobs overseas was on the uptick, 6.3 million, according to the State Department. That number has only slowed down due to the pandemic.
For college graduates, international experience can make a resume stand out in a crowded field of young professionals looking for new careers. Taking some time out of the US and returning can be a career boost, especially if you take time to learn a new language. For professionals and others, working overseas can be a way to get an opportunity that just wouldn’t come in the US.
In that Washington Post article from 2012, the writer mentioned how her husband had sent out hundreds of resumes to finally land a job in Hong Kong. He wasn’t looking for a new adventure in China, but that’s what happened. In a globalized workforce, the best opportunity for a job might involve a very long plane flight to a new place, culture, and language. This is quite a change from the past when young Americans tended not to look outside the United States for opportunity. After all, America is supposed to be the land of opportunity. Times have changed, and now, opportunities can be found in places you don’t quite expect.
Much like Europe, American young people are having an increasingly difficult time getting their first foot into the door in entry-level jobs. And much like young people in Spain, Italy, France, Greece, and other European countries, the best opportunity may be elsewhere. Young Southeast Asian folks have been moving around the Pacific Basin looking for jobs in everything from construction to domestic service. This is the world we now live in, and young American people will have to adjust their expectations and employment plans.
Ultimately, this is the nature of a globalized economy. Workers in the United States have been trying (and failing) to compete with workers from other countries for 30 years. Millennials were the first to feel the full force of this change. The 20-somethings of today have a unique opportunity to take advantage of this rather than be a victim of the trend. A small part of me is slightly regretful of the state of things. Remember that old Irish joke I mentioned earlier? It’s always told with a bit of a forlorn tone. It’s nice when you can be successful where you are and where your family and connections already exist. Moving to a new city is hard enough, but a whole new country presents a unique set of challenges that can be hard. However, since we can’t change the globalized economy overnight, it is time for America’s young people to look to the world for opportunities, not just on their own shores.
Wages and the Labor Force
A few years ago, my Mom got bored and decided to see how inflation was affecting her household budget (we are an odd people), and she calculated that even with regular raises, inflation had outpaced my Dad’s wage growth, which means they had less money today than they did when I was a kid. Her baseline was the year 2000. Over the 21st century, their money didn’t go as far as it did in the 1990s. Looking at the broader picture, Americans have been underpaid since 1977. Productivity has steadily grown (until the pandemic), but America’s wages have stagnated for nearly five decades. This is not only a loss of wealth but a significant loss of growth. Rather than letting wealth pile up at the top, it should go into the pockets of working people where it can do the most good and cause economic growth.
Since the pandemic, some of these themes have begun to reverse themselves. Wage growth is finally become; however, it is having trouble keeping pace with inflation. Unions are also pressuring companies to increase pay as well. A renaissance in American manufacturing is also pressing up wage growth. Reshoring has been encouraged by the Biden administration, but the question remains: could it be real, and will it help middle America? Much of Donald Trump's appeal was to hollow out the American industrial base. He made many promises to solve that problem and levied tariffs against China (all of which Biden continued) but didn’t do much else. The pandemic offered an opportunity to bring supply chains closer to home, but geopolitics changed this. Overall, this is good for American workers.
There are still some things workers need to solve in the economy. Getting people the right skills for these new manufacturing jobs in modern factories is a challenge, especially as Baby Boomers retire and take their decades of knowledge with them. This mass retirement is an even greater economic force that will open up new opportunities but ultimately make labor more expensive in the near term. The upside is that the greater economy will begin to work for people in ways that it hasn’t in decades.
Despite the rhetoric from businesses, an economy that works for people is far better because money moves, people spend that money, and business grows. For all their perceived virtue, the wealthy aren’t great for an economy because their money tends not to move very much. While workers make tremendous gains in wages and schedule flexibility, not all enjoy the new benefits. Gig workers have been the backbone of the Covid-19 lifestyle and are still struggling in this new economy.
The Failures of the Gig Economy
This should come as news to no one, but the gig economy is terrible for workers. Is it convenient? Yes! Do I love being able to order food and get a quick ride? Also yes! However, the reality is that the people who make these services possible aren’t paid very well, have no benefits, and aren’t even fairly compensated for the wear and tear on their vehicles. In 2016, I was an Uber Eats delivery driver and saw how little money it added in real-time. Things have only gotten marginally better in the interim. In this video, we see a modern analysis of what has gone wrong with the gig economy.
Although the gig economy is not eponymous, back in 2014, it was just beginning to be a thing. I had already been a victim of the gig economy. Since 2007, I had been working as a freelance writer. I had an excellent little business going. I had been doing writing gigs for a variety of companies. I made good money in college doing that sort of thing. When people ask what I did, it mostly leads to quizzical looks. I was standing in a Barnes and Noble bookstore back in 2014, and I was chatting with the cashier, and I was talking about freelancing, and I said, “This is the future; in 5 years, more people will work like me than work like you,” she shrugged her shoulders, and I left the store. Lo and behold, here we are: the gig economy is reaching everywhere.
Traditional employment, in some sectors, is already on its way out. Alphabet, the parent company of Google, is notorious for hiring people as contractors. Those people should be employees with real jobs with benefits and rights, but to avoid all of that, Alphabet simply hires them as contractors—obviously, the biggest offenders of these “gig” apps like Doordash, Uber, and Lyft. Even apps like Airbnb can be classified as gigs for those letting out a house or a room. Even the automakers have gotten around union contracts by hiring “replacement” workers who aren’t replacing anyone but get paid less with no benefits.
The idea within this system is that anything or anyone can be quickly hired and just as easily let go, which is rather insidious. It turns people into a commodity. Labor is no longer about people; it’s simply about service. Something needs to be done, and an essentially disposable person can be brought in to solve the problem and dispense just as quickly.
Employment stands in contrast to this idea. An employee has a position. They can take risks, and most importantly, there is a framework for how they can be treated, how many hours they can work, overtime pay, and so on. Contractors have none of these protections. This system is more manageable for employers but is at a distinct disadvantage for employees.
What does the world look like when all work is simply a gig? What does this look like in a world of remote work? These are questions that are still being resolved. Some states like Colorado and California have passed laws trying to stop this trend towards contracts and gigs, but employers simply eliminate job seekers from those states instead of complying.
One of the side effects is that we end up with an economy of ever more precarious workers working ever harder for mediocre pay under contracts that have no obligation to give them any kind of future. How does one build a career on this basis? I am not convinced that will be a thing in numerous instances. Not only have workers expressed less of a desire to start a career in the 20th-century sense, but there is much less opportunity for that in an environment where everything is a gig and the best way to get a pay rise is to change companies. People changing jobs frequently leads to a fluid employment market and great inefficiencies from increased training costs.
Everything being a gig is a function of something happening in the economy that has been common for some kind now. Why pay people to do something directly when you can hire a company and reduce overhead costs? In my book, What the Hell is Going On? I talk about how Tyson Foods figured out that growing chickens was the most expensive part of their business and began outsourcing it to independent farmers to reduce costs. The only problem is that most Tyson farmers go broke because the rate at which Tyson buys the chickens is less than the expense of the required water, food, and housing for the chickens. Tyson still gets chickens, and the family farmers are in debt. Uber drivers have to shoulder the cost of car maintenance on their earnings. The same thing goes for Amazon delivery drivers and others who work independently.
One of the major concerns I have always had with this system is the lack of social stability. When people don’t quite know where their next paycheck comes from, it is harder to plan for the future, save money, or make major life decisions. Instability means that people may or may not need to rely on social services from time to time or move quickly to take advantage of new employment opportunities. The options that people may pursue certainly depend on the type of work involved, but the sad reality is that whether it is an office job or a physical job, the gig economy is many things, but stability is not one of them.
In 2014, I remarked that if we pursued this as a society, we would have to change various systems to accommodate this work. Things like cellphone bills, which are charged monthly and even rent, might have to be shifted to a different model so that people can pay when they can and have the cash available.
Ultimately, it seems to me that having the kind of social stability we are used to under these conditions will be challenging. A lack of income stability harms the economy, as people must be careful with spending to create stability on their own. Often, this also causes people to take on less stable roles. Take nurses, for example. A nurse can work with an agency, travel from place to place, and get more pay, but that isn’t as stable as being at a hospital consistently over time.
Regarding economic progress, more income goes to the owners of assets rather than those who work, and the rich benefit. It’s a transfer of wealth from the bottom to the top. Transferring wealth from the bottom to the top has been a trend that has only gotten worse since the pandemic.
The job market is in an interesting place right now. We are getting more contracts and gig work while also going through a labor shortage. Unemployment right now is deficient. If someone wants a job, barring other factors, they should be able to get one. But are these jobs quality? Do they provide social stability and a good living? Unequivocally, no, for many people. A few fields still offer this kind of thing, but it is becoming rarer. An America run by gig workers is great for the wealthy and corporations, but it is to the disadvantage of every worker.
The New Work and UBI
The phrase “bull shit jobs” has been around for 30 years now. There has been this idea that industrialization makes lots of jobs that aren’t necessary but that we seem to hire for anyway. “Inspectors of Inspectors” is another way to put it. I would argue that it is this class of useless jobs that AI is going to eliminate first. Once an AI can run reports, compile them, summarize them, and give real-time data points, the entire staff that used to do that will no longer be needed. This is doubly true when data collection is digitized and automated. One person can do the work of dozens. Industrialization has radically changed how we think about work and “industry.” AI and technology are changing the game again. But what does that mean for workers moving forward? What do we do when the economy simply doesn’t need as many human workers as it used to need?
If you follow anyone with a socialist bent, you’ve probably heard about Universal Basic Income, UBI, or Basic Income. Recently, Chris Hughes, one of the co-founders of Facebook, proposed that the government, by taxing the 1%, give anyone who makes under $50,000 a $500 a month payment with no strings attached and no questions asked.
Basic income proposals aren’t a new thing. Various writers and political thinkers have proposed this since the 19th century. However, thanks to widening inequality in the United States and throughout the developed world, these proposals have come back into popularity to directly ease the suffering of people who are underemployed or simply don’t have a high enough wage.
However, embracing this kind of proposal would require dramatically restructuring our thoughts about work, idleness, and what it means to be a part of a society. It’s an old cliche, but especially on the right, one of the remedies everyone promotes for someone to improve their life is to simply “get a job.” Mike Rowe, that fellow who became famous for the TV series “Dirty Jobs,” has spilled much ink, reminding people that everyone should have a job no matter what it is and that one’s personal goal should simply be to get good at that job. He never mentions if that job can support you or your family, and he never mentions what it takes to get and maintain a job. In years past, just having a job was enough to have a place to live, food to eat, and some sort of transportation.
However, that is no longer the place. If all you can offer for someone is to simply “get a job.” Then, it ignores the reality that getting and maintaining a job requires several things like computer skills, some sort of shelter, and the ability to apply to many jobs and wait for them to get back to you finally. Some places always take resumes, even if they don’t need anyone. Navigating the modern job market is difficult, especially if you’re facing homelessness or are already homeless. Even for the working poor, maintaining basic shelter and survival food often requires 1 or 2 jobs and a government program. We act like someone getting a job solves all their problems, and it’s deeply rooted in how we think about people.
When we greet each other for the first time in America, one of the first things we ask someone is, “What do you do?” The question is code for “What do you do for work?” If someone reports that they do something that is socially favorable. That is much less favorable if they say they are unemployed or just don’t have a job. Even if you work for yourself or freelance, you must be in the right circle of people or very successful to see that you’ve got your life together. Even then, many people only respected those who could get and keep a job. People are not valuable on their own. We don’t ask people where they volunteer or their favorite thing to do with their time. We want to make sure that the person we meet at least checks some basic boxes, and one of them is employment.
It’s practically un-American to think of people just being people and not being defined, at least somewhat, by what kind of work they do. It’s a basic principle that everyone must be productive at something. To see someone being idle or not productive means that there is something wrong with them. New ideas like universal basic income challenge this fundamental principle of society. Ultimately, are we willing to give people money for free?
There are many arguments against a basic income. One is that it would increase the number of people who do not work. The early results of a Finnish experiment showed that it did not stop people from finding work but gave them greater security in finding work. However, not everyone in the experiment found work, leading some sites to state that basic income doesn’t encourage work but instead encourages people to simply live off the public dole.
The other argument is that a basic income would encourage people to quit their jobs and simply sit at home watching TV. Anyone looking at the cost of living would figure out that quickly: $500 a month would not pay all the necessary bills. In most American cities, it would provide food security and perhaps help with smaller bills, but other income sources would be required. This means that even with some basic income, most people would continue to work.
The whole point of a basic income is to create an extra level of security for people. To give them a reliable income source so that if a job ends or there is a major expense, they will have some extra cash to help them in their time of need without any means testing. This new income would be a considerable hand-up to a new economic circumstance for the very poor. For students, it would mean extra food security during their studies.
To many people who have worked their whole lives and struggled to survive no matter what, the idea that the government would give out money without anything in return or any expectations seems to fly in the face of the basic principle of society: self-reliance. This is baked into the whole American experiment. While a basic income is a great idea, it still requires us to re-think industriousness and what it means to participate in society. We must let go of the idea that people are only valuable when they are productive. We must embrace the idea that no one in our society “deserves” to suffer if life hands them a tough hand. We must let go of the idea that having a job solves all the problems in one’s life and that life is more complicated than just having a job.
Automation has already put many people out of work. And more jobs are threatened by automation. Self-driving trucks will gut the trucking industry. Reports show that a few lines of code or new software have eliminated jobs. This development is great for corporations but very bad for those who depend on those jobs. The job gains since the Great Recession have come in low-wage service jobs and not the higher-wage production jobs that dominated the economy of the past. Economically, if we are going to continue to have growth, we’re going to have to distribute the wealth generated by these technologies to everyday people, not just the shareholders of the companies that own the automated production processes. Basic income isn’t just a nice idea; it will soon be necessary.
Pandemics and Wars
Nothing has changed our economy more since World War Two than the Covid-19 pandemic. It has disrupted economics, work, employment, and personal finances more than anything other than a war. Although we don’t talk about it in those terms, the pandemic has affected our lives in a way that usually only occurs during war.
In another day and time, this kind of rapid, global disease would have caused a war. In a recent podcast episode, I spoke about this subject. Epidemics and pandemics can shift economics. The most notable case is the Black Death during the 13th century. The bubonic plague killed one-third of Europe, and the resulting labor shortage gave peasants power that they hadn’t enjoyed in centuries. The reality is that Covid-19 sped up all the economic trends of the 2020s and pulled them forward to the beginning of the decade. Retirements sped up, removing half of the baby boomers from the workforce, and with 1.5 million people dead, the American landscape has changed since those early days of March 2020.
Economy 2030
Globalization is out; gig, contract, and work-from-home are here to stay, and our economy looks very different now. The 2020s have been a difficult decade. With the rise of manufacturing and the receding wave of global free trade, a new class of jobs and a fresh economic base will be available by the end of the decade. Combined with changing demographics, independent energy, and the changing relationships between corporations, labor, and society, the order we’ve been used to over the past several decades is slowly disappearing. It will take time, but the reality is that North America and the US, in particular, will be the continent and economy to beat moving forward.
This is not to say there aren’t headwinds ahead. We will likely have a structural labor shortage for several years. The national debt remains an economic issue with minimal political will to solve it. America’s changing political environment and perceived lack of stability could also be challenging. However, these problems are not without solutions, especially for well-meaning and considerate people. The most difficult thing will be adjusting expectations and legacy ideas that people have about the world and the economy. Times are changing in fundamental ways, and it can be hard to adjust.
The economy of 2030 will look very different from the economy many people grew up with or were familiar with recently. Dealing with the political fallout from those changes (both positive and negative) will likely be the biggest challenge we face as a country.
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About the Author
Cameron Lee Cowan is a creative director, podcaster, author of several books, political commentator, and culture observer. With a background in music, fashion, and theater, Cowan´s multifaceted journey has shaped his unique approach to storytelling. He began his writing career in 2005, crafting essays and short stories that reflect his vintage flair. Drawing inspiration from his diverse experiences, Cowan intricately weaves everyday narratives into his work, aiming to leave readers with profound insights and observations. Whether through his contributions to The Cameron Journal or his novels, Cowan´s writing invites readers to engage critically with the world around them.