Posted on 06/05/2015 12:18:38 AM PDT by 2ndDivisionVet
In the future, highly skilled people will be bringing home fatter paychecks, but they'll rarely be home long enough to spend them.
For a glimpse of the future of work, especially the high-paying kind, look at finance and high-tech companies. Some of the biggest offer high employee salaries combined with lavish perks like free meals at work, luxury shuttle buses for commuters, and extras such as dry cleaning picked up and dropped off at people’s desks. This might look like the fruits of corporate beneficence. In fact, alongside email and other digital technologies, perks like these aim to maximize efficiency and working time, enabling employees to work as many hours as possible without needing to take time off to travel outside for food or errands. While this approach is currently seen as an anomaly, long-term economic trends will force other companies to adopt a similar model—a future of high pay combined with high hours of work.
Research shows that hours worked began falling during the Great Depression but began rising again in the 1970s. The increase in long hours that started then was initially concentrated among high-wage, highly educated men. Whereas 30 years ago, the best-paid workers in the U.S. were much less likely to work long days than low-paid workers were, by 2006 the relationship had flipped: The best-paid were twice as likely to work long hours as the poorly paid. Today, so many people are working "insane hours" that magazines publish guides on how to cope. "Today, technology means that we’re all available 24/7," David Solomon, the global co-head of investment banking at Goldman Sachs, told The New Yorker last year. "There are no boundaries, no breaks."
Why More Hours?
Why will companies want to increase hours? It’s all about boosting profits. Most workers consider only their take-home pay when thinking about how much they cost their company. However, a worker’s wage is only one portion of that employee’s total cost. Fringe benefits, training, and the physical space needed to support each worker comprise a large percentage of total costs.
One example of fringe benefit costs is Social Security, the U.S.’s public pension system. Almost all workers have some of their income taxed by the Social Security program. However, the employee actually pays only half of the Social Security tax; the other half is paid by the employer. If a company pays two people to each work 40 hours a week at $125,000 a year then the company owes the government slightly more than $7,300 for each person.
However, the Social Security tax applies only on income up to $118,500. Earnings above this level are not taxed by Social Security. If the company were able to combine the two jobs and get just one person to work 80 hours a week at $250,000, it would save about $7,300. Hiring one person for a high-wage, high-hour job boosts the company’s bottom line.
Moreover, companies experience other cost savings beyond Social Security by hiring one very highly paid person, compared to two people. For skilled workers almost all companies offer health care, dental plans and other benefits like life insurance. Top-of-the-line or Cadillac family medical care plans cost over $27,500 per employee. For every two jobs that are combined the company’s bottom line is boosted by the amount the company would have spent on health, dental, and life insurance plans.
Space is also a high cost for many companies, especially those located in major urban areas or in desirable locations like Silicon Valley. Class A office space goes for $100 a square foot per year in New York’s midtown, $60 a square foot in Boston, and $58 in San Francisco. A standard-size cubicle of 75 square feet will cost a company between $4,350 and $7,500 in these three cities before a single partition is locked into place. By combining jobs and boosting hours for each employee, companies can reduce the number of cubicles and save money on space rental. The reduction in cubicles also reduces the need for additional computers, phones, chairs, file cabinets, and other office equipment.
Why High Pay?
The case for more jobs having longer hours in the future is simple. But why will companies be forced to pay very high wages? Part of the reason is that, over time, work is growing more specialized.
The age of the generalist who is a jack-of-all trades is long over. Training for many jobs takes months, if not years. Sometimes this training is paid for by workers. For example, workers often get specialized college degrees or pay out of pocket for advanced training. Sometimes, this training is done by companies. Either way, because of the increasing complexity of work, companies are spending increasing amounts of time on training or on searching for the right candidate to handle the new hyper-specialized world.
When a company has either invested a lot of effort in training a worker or invested a lot of time in finding a worker with the correct skills, they often don’t want to lose them. A simple way to prevent labor turnover is to ensure they are paid more money than other companies are offering. If a company always pays more money than the competition, there is no monetary advantage for their employees to switch companies. Pay is the bribe that companies use to keep workers motivated and showing up day-in and day-out. As the world becomes more specialized, companies that need that specialized labor will keep raising that bribe to keep workers on board.
The Impact On People
With this trend toward long hours and higher pay, what will be the impact on people? Research has identified reduced sleep, increased stress, less happiness, lower productivity, poorer health, and higher chances for injuring yourself and others when the workday expands—implications that can be dangerous in any job, be it specialized or not.
One recent study showed that lower-income workers who work two jobs sleep less than anyone. But Daniel Hamermesh, a professor of economics at the University of Texas at Austin and the Royal Holloway University of London, analyzed the most recent time-use data from the American Time Use Survey and found that higher-income people slept less than the poor. (He theorizes why the relationship between income and sleep seems so strong: The more you can earn, the more worthwhile it may seem to sacrifice sleep for work.)
With high salaries, overtired workers may be able to mitigate their exhaustion by hiring low-wage workers in precarious employment situations to clean their homes, cook their food, and do their chores. But the impact on family life and friendships is likely to be detrimental because money can’t buy love.
A hundred years ago labor organizers campaigned for a radical idea: the 40-hour workweek. We are now moving back in the opposite direction. Some workers now work 80-100 hours per week for high pay as a way to "pay their dues" and earn a senior position in a finance company or a law firm, until they they can achieve the seniority that gives them more leisure time. In the future, well-paid workers will continue to work these crushing hours for many years as companies strive to cut costs by combining jobs. At that point, the "Walking Dead," won't be just a television show about zombies but an even more appropriate term to describe masses of highly paid but sleep-deprived workers.
This looks like a situation where the overworked high wage worker will not have the time to enjoy the money they are making. That luxury they will have to postpone to their retirement years; if their health will be up for it.
Someone has to pay for the welfare leeches and the deadheads on the government payroll...
Work is good and necessary but if becomes an all-consuming out of balance ‘god or idol’ then its a form of slavery.
I had a high-hours job at one point. I worked the hours, accumulated enough cash to pay for a down payment on my house, then had a regular 35 hour/week job.
It’s something to do for a while when you’re young, but not for your whole life.
It is worse than that; somebody has to pay for the food stamps and ObamaCare subsidies for the majority of Americans working the “new normal” jobs - at $10 per hour. The growth in food stamps includes a lot of working people that qualify for them due to low wages. I’ve posted for some time now that anyone earning over $50K has forces scrambling furiously behind the scenes to either send that work overseas or import a foreign worker to do it; here in the northeast a lot of people laid off in 2007/2008 have since found similar work - for a lot less money. Companies have simply re-set salaries to the “new normal”, swapping their workforces, and everyone starts out with only two weeks of vacation again as well (along with any other benefits that accrues with seniority).
I see middle-aged people working in Dollar General and 7-Eleven; with families they must qualify for food stamps/ObamaCare subsidies.
You’re right, but companies are now trying to make those regular 35 hour/week jobs into longer ones (without increasing pay). Look at how many people already work 8:30 - 5:00; 9-5 is a relic of a more prosperous past.
A lot of companies use a “churn and burn” methodology with their employees treating them as throwaway commodities. To survive many employees cheat trying to stay ahead of the game
No one ever counseled me, but waayyy back when .... I evolved into a pretty satisfied guy with just a paycheck and I adopted my lifestyle TO it.
When a five dollar an hour car was sufficient, a five dollar an hour job sufficed
When family demanded a ten dollar an hour car, I got a ten dollar an hour job
(BTW ... a five dollar an hour job also provides for (only) a five dollar an hour wife .. etc.)
I'm retired now and my SS is sufficient for US as we are programmed to BE that way .... by choice
Remember ... it is the LOVE of money that is the root of all evil .... not the money itself.
That’s right; anyone working ajob with no shortage of replacements is basically screwed.
Instead of working longer hours for a company I would be dependent on, and beholden to, I developed a sideline.
I bought fixer-upper houses, improved them, and rented them out. The rental real estate sideline allowed me to be much more independent at my day job, which made me more valued and higher-paid.
When I retired early, the I sold the rentals and did a tax-deferred exchange into properties in our new town.
I worked the long hours, but built a business that I owned and that is our cushion against inflation in retirement. Plus, I can pass it to our children as an inheritance.
It's about defending your job by doing a far better job than those who want to take it. It is the reality of modern technology that you are expected to be able to work anytime, anywhere and the world does not care about your schedule.
Look to the engineering field and study “automation”.
My guess, when the minimum wage reaches the breaking point and every physical labor job is too damn expensive to pay for, call the “Automation Engineers”, they’ll automate the jobs. Now that minimum wages are approaching the $12-$15 per hour range, we see the trend starting in the food service industry, I expect it will expand to many other areas.
Time vs Money
Robot hamburger factory makes 360 Gourmet Burgers every hour...
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