BOOK REVIEW & ECONOMIC ANALYSIS:

THE END OF WORK
by Jeremy Rifkin
a Tarcher/Putnam Book
350 pages, $32.50 hardback,
$15.95 paperback

Author Predicts `The End of Work' as Global Labor Force Faces Decline

by Marc Oliver

Jeremy Rifkin is president of the Foundation on Economic Trends in Washington, D.C., and has published more than a dozen books on economics, culture, science and technology. In The End Of Work he explains what many of us already feel is happening, and supplies copious and frightening data to prove it.
He warns we have spent far too little time thinking of the transition happening now. In the future, many of us will no longer work in the traditional sense, if at all. What will that mean?
Rifken believes that we (and the rest of the world, too) are rapidly approaching a historic crossroads in history. "Global corporations are now capable of producing [an ever-increasing] volume of goods and services with an ever-smaller workforce," Rifkin points out. "The new technologies are bringing us into an era of near workerless production at the very moment in world history when population is surging to unprecedented levels."
      The culprits, if we can call them that, are computers, including robotics, telecommunications, and new forms of cheap transport. Manufacturers have been able to transplant highly sophisticated production facilities to third world countries. But even in those developing countries, machines are replacing workers. Rifkin notes that "when companies build new factories in developing countries they are generally far more highly automated and efficient than their counterparts in the United States...."
[In] China, cheap labor traditionally substituted for more expensive machine capital. Now times are rapidly changing in China as technology becomes mainstreamed. Its government officials have announced an across-the-board restructuring of factories and upgrading of equipment to help give China a competitive advantage in world markets. "Chinese industry analysts predict that as many as 30 million will be let go in the current wave of corporate restructuring," writes Rifkin. [Emphasis added. ]
The new model of success, according to Rifkin, is Bangalore, India, a city of 4.2 million. "Global companies like IBM, Hewlett-Packard, Motorola, and Texas Instruments are flocking to this city atop a 3,000 foot plateau.... with... gleaming office towers emblazoned with fortune 500 logos...
"Bangalore is just one of a number of high-tech enclaves being established... [whose] very existence, amidst growing squalor and despair, raises troubling questions about the high-tech future that awaits us...."
These enclaves are where computers and electronic tools for increasingly efficient production are designed. Note that such enclaves are trending to be in third-world areas where education is high and labor costs are low.
High-Tech Winners: "Throughout the world there is an "emergent new group of high-tech... workers, who will account for more than 60 percent of the income earned in the United States by 2020," reports Rifkin. These few workers, he predicts, "...are likely to retreat from civic responsibilities in the future, preferring not to have to share their earnings and income with the country as a whole." This elite wealthy group, Secretary of Labor Robert Reich believes, will pool their resources rather than share them with other Americans or invest them in ways that improve other Americans' productivity.
"Distinguished from the rest of the population by their global linkages, good schools, comfortable lifestyles, excellent health care, and abundance of security guards, symbolic analysts will complete their secession from the union," Rifkin writes. "The townships and urban enclaves where they reside, and the symbolic-analytical zones where they work, will bear no resemblance to the rest of America."
The Other America: Rifkin provides ample data to support his predictions. A 1993 Census Bureau report on U.S. poverty confirms the growing gap between rich and poor. In 1992, 36.9 million Americans were living in poverty, an increase of 1.2 million over 1991 and 5.4 million more than in 1989; 40 percent of the poor are children. A third of African-Americans live in poverty, and nearly 30 percent of Hispanics. Nearly 11.6 percent of white Americans also live in poverty. To all these people, government-assisted relief is essential just to survive.
More than 1 in 10 Americans depend on food stamps, for example-the largest percentage since the federal program was launched in 1962. "Another 20 million are currently eligible for food stamps but have failed to apply," adds Rifkin. "Many of the new recipients are working people whose depressed wages and part-time employment are inadequate to feed their families."
Many of those going hungry are senior citizens. More than 30 million older people are forced to regularly skip meals, according to studies by Bread for the World, a Washington-based relief organization.
The Census Bureau reports that over a third of Americans were without health care insurance in 1992-an increase of 2 million in just one year. Mr. Rifkin notes that many employers have reduced or eliminated benefits altogether to save on overhead, while others have reduced their workforce in order to provide benefits for the remaining workers.
Over 42 percent of the country's poor live in inner cities, up from 30 percent in 1968. Providing for the nation's urban underclass costs this society over $230 billion a year.
Jobs Aren't So Much Going Anywhere, Rather They Are Disappearing Everywhere: Unemployment in Japan might be as high as 7.5 percent (with estimated unreported jobless added), with workers in unemployment lines for the first time in recent memory. "Every Western European nation is experiencing worsening unemployment," says Rifkin. France's unemployment is 11.5 percent; in England, it's over 10.4 percent, in Ireland, 17.5 percent. Italy's stands at 11, about the same as Belgium's and Denmark's. In Spain, he found, one out five workers has no job. And consider this: "German unemployment hovers at 4 million... more than when people elected the Nazis."
Drake, Beam, Morin, a consulting company (which assisted BGE in its major downsizing two years ago), recently surveyed more than 400 European companies and reported that 52 percent intend to cut their workforce by 1995. (In a similar survey conducted in the U.S., the consulting company found that 42 percent of the firms interviewed were planning further cuts by 1995.)
A More Dangerous World: Perhaps it should come as no surprise that there's a disturbing correlation between increases in unemployment and the rise in violent crime. "In the Merva and Fowles study," says Rifkin, "the researchers found that in the United States, a one percent rise in unemployment results in a 6.7 percent rise in homicides, a 3.4 percent increase in violent crimes, and a 2.4 percent increase in property crime."
The same study "...also showed a striking correlation between growing wage inequality and increased criminal activity. Between 1979 and 1988, the thirty metropolitan areas studied in the survey experienced a 5 percent increase in wage inequality... accompanied by a 2.05 percent rise in violent crimes, a 4.21 percent rise in murder, a 1.79 percent increase in robbery, a 3.1 percent rise in aggravated assault, a 1.95 percent increase in larceny and theft, and a 2.21 percent increase in motor vehicle theft. By the end of 1992, more than 833,593 Americans were incarcerated in state and federal prisons, up by 59,460 over the previous year.... In 1992 alone, more than 16 percent of U.S. homeowners installed electronic security systems.... between 3 and 4 million people already live inside walled residential communities.... Reduced wages, steadily rising unemployment, and the increasing polarization of rich and poor is turning parts of America into an outlaw culture."
Knowing that older individuals are less likely to ever commit crime, might these correlations support hiring younger workers over their parents? Together with added health care costs for the middle-aged and increasing old-dog-new-trick difficulties, might hiring the laid-off middle-aged become even more unlikely, especially since they are less likely to become violent? Will the stress to attain gainful employment add generational clashing to those of race and sex?
The Dawn(?) of The Post-Market Era: "On the eve of the third millenium, civilization finds itself precariously straddling two very different worlds, one utopian and full of promise, the other dystopian and rife with peril," writes Rifkin. "At issue is the very concept of work itself. How does humanity begin to prepare for a future in which most formal work will have passed from human beings to machines?"
Alternatives to formal work will have to be devised to engage the energies and talents of future generations, says Rifkin. "The hundreds of millions of workers affected by re-engineering of the global economy will have to be counseled and cared for. Their plight will require immediate and sustained attention if we are to avoid conflict on a global scale."
Unsatisfactory Courses of Action: Mr. Rifkin poses two courses of action, which I found to be unsatisfactory:
"First, productivity gains resulting from the introduction of new labor- and time-saving technologies will have to be shared with millions of working people. Dramatic advances in productivity will need to be matched by reductions in the number of hours worked and steady increases in salaries and wages in order to ensure an equitable distribution of the fruits of technological progress.
"Secondly, the shrinking of mass employment in the formal market economy and the reduction of government spending in the public sector will require that greater attention be focused on the third sector: the non-market economy. It is the third sector-the social economy-that people will likely look to in the coming century to help address personal and societal needs that can no longer be dealt with by either the marketplace or legislative decrees.
"This is the arena where men and women can explore new roles and responsibilities and find new meaning in their lives now that the commodity value of their time is vanishing. The partial transfer of personal loyalties and commitments away from the market and the public sector and to the informal, social economy foreshadows fundamental changes in institutional alignments and a new social compact as different from the one governing the market era as it, in turn, is different from the feudal arrangements of the medieval era that preceded it."
Summary: This is a thoroughly researched and eye-opening book that really scares you with its data on the current state of societies and its reports on recent trends. It feels like truth. At its conclusion, however, I wondered if Mr. Rifkin is being completely candid: If he expects the continuation of current trends of increasing unemployment and increasing marginalization of jobs and salaries for 80 percent of us, while income and wealth continue to balloon for the 20 percent of so-called "knowledge workers," shouldn't he come right out and say so? His posed solutions, as weakly as they are worded, seem to be an attempt to placate the establishment.
On his first point of reducing work hours, the nature of future technology-assisted work requires intensity and prolonged periods of concentration, which do not coincide at all with the notion of ever-shorter work weeks.
On his second point, that a social or non-market economy will evolve to satisfy the needs of those remaining unemployed, he is much too sketchy. Where will their money come from to pay for non-market un-worker time, or does Rifkin envision a barter system? And if a barter system, how would these people pay for goods produced by all those computers and machines in the market economy? Without such specificity, might this social/non-market group be a virtual `camp,' where "losers" crawl off to in order to die?
Given the loss of good jobs and the increase in temporary or part-time jobs without benefits (if a job at all), you would think citizens would be angry. But perhaps some think these are isolated cases-that it's just their uncle's or aunt's personal problem.The End Of Work clearly shows that these trends are now happening dramatically all over the world. And Rifkin's work is not the only research proving the matter.
The inaction of our leaders and governments to study these issues and propose remedies is stunning. The closest thing to guidance the public has been receiving is "Get a better education," which Labor Secretary Robert Reich is still allowed to say.
But a further seeming secret is that, even as average education might increase, the need for only 20% of the population to be knowledge workers will not likely expand to include more people. We already have an excess of capable knowledge candidates: IBM and Apple and AT&T and Motorola (etcetera) have been laying them off because they have too many, and they are continuing to do so.
This being the case, as Ross Perot says: "We should pilot something to see if it works." Since there is no evidence of any government study or pilot -- just lots of spin-control -- I suggest the meek take some action so as to inherit something. And good luck to all of us!

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This story was published on May 2, 1996.