What Happened to America’s Good Jobs?

As the picket lines swell with more and more Verizon workers, the company’s chief executive, Lowell C. McAdam, asserted that Verizon wanted to protect "good" jobs. But what are good jobs? The tech workers at Verizon are not objecting to the introduction of new technology.  As Marilyn Irwin, a president of a union local put it, “We understand technology and that things are going to change [and] we are going to be able to do things quicker, easier, and [in] a better way.  That’s not really our issue.”

Their issue is protecting good jobs. The rise of the “sharing economy” has changed the way people find work and the tech industry has changed the way people behave at work. Anxieties over these transformations have affected the working lives of American workers, especially those who have been left behind. In state after state workers have lost economic ground and “good jobs.” Historically the definition of a “good job” has changed over the last century, and understanding why could help us understand how to make better sense of what is going on today in workplaces across the land.

At the end of the nineteenth century, in what historians often refer to as the “Gilded Age,” a second industrial revolution unfolded in the United States. Technological change transformed manufacturing even more deeply than in the first industrial revolution, which remains noteworthy largely for the advent of the factory system of production. In this second industrial revolution technological changes raised production to unprecedented levels, revolutionizing manufacturing and paving the way for mass production which would arrive with Ford’s assembly line.

Although the second industrial revolution transformed American manufacturing, the new technology – often fast, electric, and automatic – reduced the relative skill content of shop floor work, disrupting workplace culture and altering relations between workers and managers. In many instances, this new technology made it easier to exploit workers or eliminated their jobs altogether. Tensions often boiled over as strikers protested their working conditions and managers argued for the prerogatives of ownership. In short, the conflict between labor and managers was the defining battle of the period between the Civil War and World War I. The “labor question” was on everyone’s minds.

After the turn of the century, however, technological change itself also changed the equation. New production technologies were very expensive to invent and build. Therefore to make their installation worthwhile, managers needed to ensure that they were used as efficiently as possible. Production needed to move quickly, requiring workers to put forth high levels of effort.

In Henry Ford’s auto plants, the quintessential “good job” was created.  Simply put, under Ford, managers and workers struck a new bargain: high wages in exchange for high effort. The rapid pace of Ford’s assembly line, which carried the work to workers who would perform a single task, produced labor turnover problems because the line intensified and quickened the pace of work to such an extent that many workers left the job quickly out of fatigue. In the initial year of Ford’s plant, approximately 5,000 workers quit per month and on some days plants needed over 1,000 substitute workers.

Ford recognized that high production rates could not be achieved with high rates of labor turnover because it took time to train new workers. To stem this expensive turnover, in 1914 Ford began paying shop floor workers five dollars per day, approximately double what most workers in automobile plants and elsewhere in industries across the land earned. Paying high wages enabled the automaker to reduce turnover, avoid unionization, and impose work discipline, leading Ford to call the five dollar day “one of the finest cost-cutting moves we ever made.”  Nevertheless, these “good jobs” required high levels of effort that exhausted workers, prompting one worker’s wife to write to Ford, “That $5 a day is a blessing – a bigger one than you know but oh they earn it… The chain system you have is a slave driver! My god!”

In the early 1920s labor turnover jumped again. As a result, managers offered benefits in addition to good pay. That is, good jobs now had four features: (1) they paid well, (2) they offered employment stability, (3) they offered opportunities for promotion and advancement, and (4) they protected against arbitrary discipline and dismissal.  Not all manufacturing corporations offered good jobs but those that did reduced turnover and increased their productivity and profitability throughout the 1920s.

The Great Depression slowed and eliminated many good jobs but after World War II, with the industrial economies of Europe and Japan largely under rubble, the United States entered a Golden Age. An alliance between manufacturers and labor forged this Golden Age around a sharp increase in the number of good jobs. High wages paid to workers buttressed this system, in which workers could then, for example, buy the cars or televisions that they made. Economic inequality, in stark contrast to today, reached historically low levels.

By the 1970s, the unusual alliance between manufacturers and labor that forged the Golden Age fell apart. In the face of resurgent Japanese and European manufacturing and the breakdown of the postwar Keynesian-consensus that had guided economic policy for decades, manufacturers’ relations with their workers took an adversarial turn.  Many of the aforementioned “good jobs” disintegrated as businesses sought the South’s low-cost, non-unionized labor, leaving the previous centers of American industry vacant. American manufacturing jobs began to disappear, relocating to areas with cheaper labor.

Although these processes unfolded decades ago, they shaped the economy in which we work today. The four features of the golden age “good job” – good pay, stability, advancement opportunities, and protection against arbitrary discipline and dismissal – plus health care and pensions, provided the foundation for the mid-century American middle class. These good jobs made the Golden Age a period of both rising standards of living and decreasing inequality. But, today, jobs offering these features are much harder to obtain. Instead of rising standards of living and decreasing inequality, the world of work today has two much-different features: the shift from manufacturing to services and the rise of the “sharing economy.”

The employment shift from manufacturing jobs to services jobs has been underway since the 1970s. In many areas services employment has replaced American manufacturing, the sector with the largest number of “good jobs” during the Golden Age. Rather than working on an assembly-line, services work ranges from retail and fast-food to finance, insurance, and real estate to computer oriented work. Some of these service jobs produce good jobs. But, the range of jobs in this still-growing sector has a kind of built-in inequality, because wages are, of course, quite different between fast food and finance.

The retail and restaurant services jobs that have replaced manufacturing as the key site of working-class employment are not good jobs.  And raising wages to $15 per hour will increase pay but the other attributes of good jobs are not included in the overall wage package.  Good pay, stability, promotional opportunities, and protection for the most part do not characterize service-sector jobs.

Good jobs don’t exist in the so-called “sharing economy” or “gig economy.” An endless stream of commentary has praised the sharing economy as a revolutionary harbinger of a new era of convenience and efficiency. These innovative services do have world-shattering implications, but not in the way most commentators think. The way these firms use labor preclude from the outset some of the features of a good job.

If an Uber driver, for example, must be classified as an independent contractor, the kind of life-with-one-firm stability that characterized postwar good jobs cannot exist. The same is true for opportunities for advancement within the firm, given that the company technically doesn’t consider its drivers to be employees. Also, good pay, perhaps the most important feature of a good job, could be hard to come by in the case of Uber, for example, which puts on the driver the costs of car-ownership, gas, and insurance – in a sense shifting traditional business risk from owner to worker.

Stability and protection against arbitrary dismissal might be most at risk in the “gig economy.” As Neil Irwin recently reported in the New York Times, contractors and temporary workers accounted for all the growth in employment in the last decade because there actually was a small net decline in the number of workers with conventional jobs over the same period. Temporary workers implicitly are not protected by the kind of social contract between workers and employers that protected Golden Age jobs which often served to avoid layoffs during business slumps.

In short, our political and economic lives are much different than those in the 1950s and 1960s when many enjoyed a rising standard of living.  From behind the cash register at a fast food restaurant to behind the wheel of a ride-sharing car, the world of work is much different today than in the postwar Golden Age when good jobs built the American middle class.