December 10, 2018
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Memo to G-20 leaders: The ‘future of work’ is now

Natacha Pisarenko | AP
Natacha Pisarenko | AP
An Argentine flag waves over Plaza de Mayo square, seen through a door at the presidential palace in Buenos Aires, Argentina, Thursday, Nov. 29, 2018. Leaders from the Group of 20 industrialized nations will meet in Buenos Aires for a two-day summit starting Friday.

The “future of work” will top the agenda when G-20 leaders gather in Buenos Aires on Friday. That is a popular topic these days, but one that too often devolves into wild speculation about future technologies and the radical changes in society they might produce.

A better place to start would be the state of work today, as events lead many workers to wonder whether there is any future for them at all.

Yes, Amazon recently announced it will hire 25,000 highly paid knowledge workers in both New York and the D.C. area. But at the same time General Motors has announced it is closing several manufacturing plants, including one in Detroit and one near Youngstown, Ohio. Both are examples of the economic divergence already hitting the U.S. and driving international trade tensions that will surely come into focus in Buenos Aires.

The idea of a bifurcated economy where the rich get richer and the poor get poorer is an oversimplification, but it is one that gets at something real. There is a growing divide in our country between winners and losers, the New Yorks and the Youngstowns. Places in the middle like Kansas City or Milwaukee struggle to remain on the right side of that divide.

It is a fissure that runs not just between regions such as the coasts and the heartland, or between cities such as Columbus and Flint, but often through the heart of our communities. In Los Angeles, Hollywood glitters and Silicon Beach startups flourish as homelessness spirals out of control and generational poverty traps too many people. Elon Musk sends rockets into space as the local Federal Reserve finds that the median value of the liquid assets of people of Mexican origin — 35 percent of the population — is zero.

In a globalized, technology powered, innovation driven, increasingly post-industrial U.S. economy, elite sectors boom while traditional blue-collar industries suffer. Many jobs have disappeared and what remains are too often low-paying and unstable, or mere piece work in the “gig economy.”

While disruptive innovation at the high end of the economy is celebrated, the reality is that only a third of adult Americans earn a four-year degree and fewer than half earn a community college degree. The genius of the Industrial Age was that it gave people who were not part of the cognitive elite an ability to hold a job with dignity, one that allowed them to support a family, own a home, take vacations and give their children a better life. Any policies that do not give those in the bottom half of the skills distribution a productive and valued place in our society are inadequate.

Whatever the merits of our current economy, which are considerable, it is not meeting that challenge. Economists can explain to people all day long that they are not putting a proper value on their iPhones and other consumer goods, but the classes at the bottom of the economy have judged that in critical ways the modern economy is failing them.

This is producing social unrest that threatens not just the positives of our current economy, but the body politic itself. Populist uprisings around the developed world — Trump, Corbyn, Bolsonaro, the new Italian coalition government and more — are upending the current elite consensus. Many people today, on the left and right, are ready to blow the current system up. Brexit is perhaps the most consequential manifestation of this to date. But more threats could arise, as a possible U.S.-China trade war looms over the G-20 summit.

It is time for the Western elite to recognize that the social and political consequences of the current policy consensus now outweigh the economic benefits. Man does not live by GDP alone. The time is now to engage in genuine, productive reform that focuses on the social, cultural and political dimensions of civic health without abandoning the economic one.

What such changes will look like is our generation’s challenge to solve. In his new book, “The Once and Future Worker,” Oren Cass makes the case for focusing on providing productive opportunities for workers rather than just their ability to consume. That’s a start. We need regulatory reform at every level. We need to reform the safety net to reward instead of punish work. We need to “move to Canada” by adopting a skills-based immigration system that is actually administered and enforced. We need policies to encourage family formation and stability.

We don’t know how all these new policies will look, but we can either be part of productively developing good policies or cede the ground to others who will create bad ones. Those who merely cling to the status quo and yesterday’s dogmas will be rendered increasingly irrelevant by those looking forward to an always changing future.

Aaron M. Renn is a senior fellow at the Manhattan Institute.


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