The world economy is not just in an energy transition or move towards lower carbon emissions. Given increasing automation and digitalisation, the demand for labour should be declining. Nevertheless, there seem to be a general shortage of labour all around. Perhaps it is an issue of skills mismatch post-pandemic. But many have also identified a few other emerging issues including the fact that people are quiet quitting or finding the existing landscape of work broken.
I don’t think people are not willing to work long hours. In fact people are working so much more than in the past despite the luxuries their higher income can afford, including more leisure time. The question is who and what they want to devote these ‘working hours’ towards.
It would seem almost hilarious that people deem it strange the new generation wants to have space and time for their own lives and side hustle. If we look beyond the cultural norms created in the boomer’s generation, it is clear that the direction towards greater capitalism, marketisation and the free economy is that people would be more cautious about how labour is being traded and delivered.
And perhaps that is exactly what is happening. We are finally recognising that the labour market has been broken and with the advent of technology, the solution is more freelancing, contract work and piece-based or scope-based compensation. No more over time or time-based pricing. No more self-worth being tied to your job titles. Everyone can be in the C-suite. Everyone can be their own bosses.
It already started when the corporate or career ladder was torn down one or two decades ago. Partly as a result of economic crises requiring ‘restructuring’ or ‘right-sizing’ of firms. And partly because of the perverse financial incentives pervading the frenzy of financial optimisation through spin-offs, mergers & acquisitions – all of which disruptions the more traditional notions of the ‘ladder’.
In any case, I think the new trends of the workplace are still functions of the direction we have been taking our economy towards: increasing adoption of technologies, reduction in contracting costs leading to the breakdown of the Firm (as predicted by Coase in his theory of the firm), fragmentation of markets driven by endless differentiation and specialisations. That in turn creates a force to reshape demand through marketing, advertising, culture-making – an aspect not addressed by economics but nevertheless driven by economic incentives.
We often forget that our culture is in a large part shaped by economics and incentives; and the doctrines and policy approaches we have taken shapes these incentives in profound ways.