The Centrality of Paid Work

In the history of Western civilisation, the notion of undertaking paid work for a living is a relatively modern idea.

Hunter/gatherers worked somewhat cooperatively in their various tribes and to a certain degree shared the fruits of the hunt, the catch and the various gatherings. But these were subsistence societies who only occasionally traded and the tribal members were generally focussed on nurturing those close to them. In essence they worked largely for themselves and their near kin.

In agrarian societies the first concern was to grow enough to sustain your family and then hopefully to trade any surplus. A landholder might barter some of his surplus for part of the surplus of another farmer, or perhaps for the purchase of new implements and occasionally for additional labour to help with the planting or the harvest. But as agriculture became more productive, and societies began to develop around the more fertile areas, kings and emperors arose who had the capacity to consolidate agricultural surpluses and with the wealth so created were able to employ people to contribute to the ambitions and undertakings of the rulers in various forms of paid employment.

But the opportunity of paid employment was available to only a minority before the Industrial Revolution. The Industrial Revolution seduced farmers and farmworkers from the fields to the mills and factories. Payment in kind became impractical and more and more people were compensated with a wage in consideration for applying their labour to enhance the productive output of their employers.

Consequently in the last three hundred years or so, for those without significant capital, paid employment has become the principal means of wealth creation and this applies to the majority of the population.

But the inexorable march of technological progress has changed the nature of work. The invention of the steam engine enabled the motive power of humans and animals to be displaced by a machine that, whilst it consumed fuel, could nevertheless provide a constant output for twenty four hours a day. The role of the humans changed from those that did the physical work to those that buit, maintained and tended the machines that did the physical work.

It is no surprise that capitalists in labour-intensive industries began to find ways to minimise the labour component of work so that they might employ fewer people and reduce their input costs.

Manufacturing has been traditionally labour intensive. Consequently the owners of manufacturing businesses have either located their factories where there is a source of cheap labour or sought, through the use of technology, to reduce the demand for labour.

Indeed we have seen many times that manufacturing industries have flourished in third world countries where the cost of labour is low. But due to the success of those industries the standard of living improves resulting in higher wages. This of course makes manufacturing more costly and as a result opens up the opportunity for other lower wage countries to compete for manufacturing business.

Hence labour intensive industry is the natural economic staple of third world countries. But it is also one of the drivers of economic development which enables them to work their way out of poverty. Two good examples of how manufacturing has been the first step to broader economic success are Japan and South Korea.

This is, of course, a dynamic that few in the union movement understand. When they agitate for higher wages than the business model allows either:

  1. Employment in labour intensive industries is reduced with many jobs being driven off-shore, or
  2. Business owners seek to displace workers with technology, or
  3. The jobs are propped up by tariffs or other economic distortions that raise the cost of living for workers and all others in the economy.

Often we have seen commentators lament the increasing use of technology in the workplace because of the fears that it reduces employment opportunities. Since James Hargreaves invented the spinning jenny which threatened the jobs of cotton weavers in the late 18th century, experts have been concerned that technological development would result in mass unemployment.

The famous economist, John Maynard Keynes, in 1930 wrote that within 100 years mass unemployment would arise:

………… due to our means of economising the use of labour outrunning the pace at which we can find new uses for labour.

Keynes predicted that the working hours per week offered by employers to employees would dramatically reduce. Yet in Australia recent studies have shown that people, (particularly men) are in fact working longer hours.

Oxford economists, Carl Frey and Michael Osbourne, predicted that 47% of the jobs in the US would disappear in the next twenty years. But there is no sign of this happening as unemployment rates in the US are currently lower than they have been for decades.

Those trying to predict the future almost always make the mistake of looking to the future by extrapolating the past. Automation, Artificial Intelligence, Big Data, Robotics and whatever will no doubt decimate many traditional jobs. But such technologies also create opportunities for new jobs.

As the work demographic changes, employment reduces in some fields and increases in others. Jobs in manufacturing have been reducing on a per capita basis in Australia for almost fifty years. Agriculture is also now capital intensive with mechanical harvesters, bigger tractors and water infrastructure. But the services sector has burgeoned with more employment for example in financial services, health services and IT. And because of the high demand created by China and India seeking to raise their standard of living, our resource industries are thriving.

And so it is dangerous to predict that work might be declining just because employment in traditional areas is reducing. As has often been said the jobs of the future have probably not even been envisioned yet. And is it a bad thing that people do not have to labour in the fields, sweat over the anvil in the Blacksmith’s shop or manually haul away human excrement as they did in the first decades of the twentieth century?

But of course there have been losers in these dramatic transitions of work. In Australia, the biggest losers in the employment stakes have been unskilled males. Much of the manual work that was once available to those without skills in our economy has been taken over by machinery aided and abetted by automation and robotics. On the other hand the service economy has created opportunities for unskilled, or at least, minimally skilled work in such areas a health, aged care and education. But these roles (for reasons we will see shortly) are predominantly taken up by women.

In addition, for life style reasons, women tend to choose casual and part-time work more frequently than men.

The ACTU and the union movement generally are campaigning against casual work and claim that the casualization of work has dramatically increased. In fact an analysis of the relevant statistics from the Australian Bureau of Statistics (ABS) shows that the proportion of paid work carried out by casual workers has remained static at around 25% for the last ten years. Now despite their fine words, the ACTU isn’t particularly interested in the welfare of casual workers. In the face of falling membership they would like to have more people with permanent jobs because such people are more accessible to organising industrially and reducing the number of casual workers would perhaps provide them with more members. Sociologist, Hugh Mackay, found that many people preferred part-time or casual work because they were able to fashion their work around their private lives, whereas those in full-time work often were forced to fashion their private lives around their work.

As well the union movement is currently very vocal about the slow rate of wage increases for the workforce and complain that workers’ share of national income is declining and maintain it is now at a 50 year low. Again, according to the ABS, labour’s share of national income is largely the same it was 50 year ago, fluctuating between 52 and 57%.

But it is true that according to a report of the International Labour Organisation, in many overseas countries labour’s share of national income has declined. It seems likely that that trend has been aided by high investment in technology.

Another issue which is causing some controversy concerns the so-called wages gap between men and women. This is normally raised as a gender equity issue.

In considering this problem, the chief issue here is about whether we should focus on equity of outcome or equity of opportunity. Surely all that can be reasonably expected of an economy is to ensure that there is equity of opportunity irrespective of gender. That has largely been achieved in our society and the unequal wages outcomes can be seen to be as a result of choices determined by underlying gender characteristics. But in many Western societies the fact that on average men earn more than women is seen as an objectionable feature of the labour market.

According to the Workplace Gender Equality Agency (and no doubt every nation should have one of those!), the gap in Australia is 14.6%, which is at a 20 year low. This is quite low compared with many OECD countries. It is for example 19% in the US, 26% in Japan and 21% in Germany.

That the gender pay gap is related to employment choices which differ between males and females can be demonstrated by the fact that during the mining boom the gender gap was even higher because more men than women choose to work in the mining industry where many of the jobs are in remote locations and involve shift work and are consequently higher paid.

Canadian psychologist, Jordan Peterson, points out that men and women’s interests are inherently different. Women are more interested in people and men are more interested in things. When they have the freedom to choose, those choices will be reflected in the jobs they pursue. He points out that equal opportunities for employment, aided by government sponsored childcare, generous maternity leave provisions and so on actually increase the gender gap as women become freer to exercise their preferred choices and because the salaries for nurses, teachers, carers and so on are not as high as the salaries of engineers, lawyers, accountants and other male-preferred occupations, the gender gap widens.

Not surprisingly, even in family friendly employment environments, women with children earn significantly less than men. This is often referred to as the “motherhood penalty”. Researchers have found that women with children, whether they are married or single, are less likely to want to work overtime, work at nights or work on public holidays. They naturally want and seek opportunities to spend more time with their offspring, which, in terms of the welfare of the children and indeed the family, is a good thing. But as a result of these choices their earning will be less than men in comparable positions.

Now, I believe a greater indignity bestowed on women above and beyond the gender gap, is how we undervalue the contribution of stay-at-home mothers to our society. If a woman (or a man for that matter, but it is more often a woman) makes beds and cleans rooms in a hotel she is said to be contributing to the economy and her output is included in the GDP. Doing the same work in the family home adds no value to the economy.

If a mother places her child in day care the same quandary arises. Because she hires a service to have her child cared for that magically puts the work into the “real” economy. If she chooses to care for the child herself the work she does as a carer seems not to be valued at all.

If a woman chooses to devote her time to the maintenance of her household and the care of her children she is devalued by society. And yet her contribution to society is a very positive one.

This creates very great tensions for women. In my professional career as an executive coach I had to confront this dilemma many times. Professional women are often very torn between their desires for professional success and their maternal instincts about nurturing their children. Those that choose to spend more time with their children are normally happier as a result, but it does come at a cost to their careers. (I won’t elaborate further on this issue having written previously on the subject.)

However suffice is to say that paid employment is a key feature of capitalism. As we saw earlier, it is the principal means of distributing wealth to those who have insufficient capital to build a livelihood on investment. But work is far more important than that. For many, work is a major source of meaning in their lives.

Even before identity politics became so pervasive, most people identified with their work roles. When you met somebody, one of the first questions you asked was, “What do you do?” Consequently one of the indignities that came with unemployment was the loss of identity.

To be employed is to have society tacitly acknowledge your worth.

But work has other intrinsic benefits and helps us meet other important needs such as our needs for meaning and purpose, our needs for achievement, and our needs for personal development, Indeed for many, work helps meet their social needs as well. I remember reading once about a lady cleaner who won the lottery which meant she did not need to work anymore for her financial upkeep. But she didn’t resign because she valued the social interactions she had in her workplace.

Work, then, is central to the lives of many of us. Whilst work is important in securing the financial welfare of workers and their dependants it provides far greater benefits for most.

3 Replies to “The Centrality of Paid Work”

  1. Despite the Marxist view of caring for one’s own children as being ‘unproductive’, the few years women (and/or men) may spend laying the foundation of their children’s lives needs to be weighed against a long life of self interest, now 30-40 years longer than a century ago. Miss too much of it and you may find: (a) the child lacks normal bonding and capacity to relate; (b) the parent/s miss the invitation to maturity the child evokes; (c) a poor foundation sets the pattern for dysfunction ever after that the division of labour had overcome (note that obesity, mental health, diabetes, heart conditions, ADHD. Choice is always missing from the socialist manifesto.

  2. Hi Ted
    Thank you for an insightful essay.
    I hope you have a safe and enjoyable festive season and look forward to your essays in 2019.

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