The Changing Nature Of Middle Class Work

Tyler Durden's picture

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

As a result of these profound systemic changes, new models of work are emerging.

Gordon T. Long and I recently discussed the changing nature of work--specifically, work that can support a middle class lifestyle and aspirations. This is the third of my series on the decline of the middle class:

How the Middle Class Lifestyle Became Unaffordable
The Destabilizing Truth: Only the Wealthy Can Afford a Middle Class Lifestyle

The economy is changing in structural ways that affect not just the job market but the nature of work itself. If we ask, what is work?, the conventional answer is tasks that somebody will pay us to do. This is true, but it doesn't address why someone is willing to pay us. The answer is to create value.

In general, work creates value by completing processes. The higher the value of the processes completed, the higher the premium created by labor. Low-value work cannot command a high wage; any organization paying high wages for low-value work will eventually go broke.

Processes that are programmable can be done by machines and software at much lower costs than human labor. (Programmable work is typically tradable, i.e. it can be done anywhere on the planet.) Recall from yesterday's essay that labor costs are rising for structural reasons: as robotics and software get cheaper, human labor gets more expensive.

Urbanization, Baumol's Cost Disease and demands for more government benefits push labor costs higher. Even though wages are stagnant, the labor overhead costs paid by employers--healthcare, pensions, payroll taxes, workers compensation, etc., compensation costs--are soaring.

These trends cannot be reversed by policy tweaks. They are built into the economy whether it is capitalist, socialist, communist or theocratic.

The decline of well-paid, simple-to-learn jobs is a result of technology. Though it is politically popular to blame outsourcing/offshoring for the demise of "good paying manufacturing jobs," if trade barriers were erected tomorrow that banned all imported goods, domestic manufacturers would employ robots and software to produce most goods, for the simple reason that hiring costly humans to complete processes that machines can perform faster, better and cheaper makes no financial sense.

As technology's ability to replace costly human labor moves from the factory floor to the service sector, the nature of middle class work is changing. Technology does not go away because we don't approve of the consequences: processes that are faster, better and cheaper will spread, regardless of our approval or disapproval.

Economies that limit technological innovation stagnate and become poorer.

Jobs that can be learned in a few hours are prone to being replaced by machines.If a process and its end-state can be specified, a machine or software can be programmed to do the work. Human labor that generates low market value cannot command a high wage. We can choose to subsidize higher wages, but these higher costs must be paid by someone else via higher taxes or costs.

There is always an opportunity cost to any such subsidy: what else could have been done with that money? In general, subsidies are mal-investments that siphon money from productive sectors to prop up politically powerful unproductive sectors. Economies that enforce mal-investment eventually decline, as years of under-investment hollow out the parts of the economy that are propping up all the parasitic sectors.

The protected sectors beset by soaring costs (healthcare, higher education, major weaponry programs, finance, etc.) will undergo the creative destruction of technology-based productivity gains for the reason that they are already unaffordable, not just to households but to the nation.

These low-productivity bastions of secure, high-paying middle class jobs cannot keep increasing their share of the national income. Either productivity will increase and costs fall or these sectors will implode as their costs exceed the nation's ability to fund them. Take fast-rising healthcare costs and slow-growth GDP and extend the lines on a chart: can healthcare absorb 90% of GDP? Clearly that won't happen; the sickcare system is already breaking down at 20% of GDP.

As a result of these profound systemic changes, new models of work are emerging. I have written about hybrid work for years, and recently coined the term Mobile Creatives to describe the class of workers who don't fit into traditional job categories. International Workers' Day (May 1) and the New Class: Mobile Creatives

My new book Get a Job, Build a Real Career and Defy a Bewildering Economy is in essence a how-to guide to becoming a Mobile Creative.

Here are a few of the many dynamics Gordon and I discuss in the program:

1. The cost of software and 3-D fabrication tools is declining
2. The speed of change places a premium on adaptability
3. Problem-solving increasingly depends on cross-fertilization of skills
4. The human capital value of integrity and accountability increases as the trust horizon shifts
5. New models of sharing work and revenues are emerging--these are both global and local

And much more....


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Manthong's picture


Double, double toil and trouble;
Fire burn, and caldron bubble.
Fillet of a fenny snake,
In the caldron boil and bake;
Eye of newt, and toe of frog,
Wool of bat, and tongue of dog,
 Adder's fork, and blind-worm's sting,
 Lizard's leg, and owlet's wing,—
For a charm of powerful trouble,
 Like a hell-broth boil and bubble.

Fed Chair: 'Deficits Will Rise to Unsustainable Levels'...

Vampyroteuthis infernalis's picture

Charles, I keep reading about how machines are going to replace human labor everywhere. Bullsh*t. Robots are going to replace humans in highly repetitious, simple jobs that generate high product or service volumes. Robots are expensive. Until the job meets those demands, human labor will still compete and be value added.

The simplest way to get people working again is reduce the gov't from harassing employers with regulations that do nothing but allow big biz to win. Plain and simple as that.

pods's picture

We are all going to have robots who clean the house, flying cars that fold into a briefcase, boys names Elroy, a daughter Judy.

Shit, I even named my dog Astro just to push along progress.

Or, when I wake up from my dream, I am reminded that this might be the meme we evolve into:



imapopulistnow's picture

A very large segment of the population is not capable of moving up the value added chain to perform complex work activities.  From the beginning of civilization there has existed a large manual labor workforce whose jobs are now being taken over by machines.  It really is different this time.  The ramifications are profound and I have yet to read where someone has come up with a reasonable solution. 

Fukushima Sam's picture

Right now these people are living off the government dole.  I see them at the coffee shop in the middle of the day when I take a break from work, sipping their lattes and doing things on their tablets.  I keep wondering where these people come from and why they don't seem to have jobs but can still afford to hang out at the coffee shop sipping lattes.

And then I think perhaps I am an idiot for having a job.  My taxes last year could have supported two of these people, and given the crazy state of our government budget and funny money I'm probably supporting four of them.

imapopulistnow's picture

Maybe it's time to build some pyramids - the old fashion way....

insanelysane's picture

Pods forgot that you will still have a tyrannical boss that yells your name; JJJJJETTT...SONNN, get in here!!!

MachoMan's picture

What do you think is going to happen?  If machine labor becomes so cheap, what do you think will happen to manual labor in order to compete?  Everything is already in place for it to commence...  high debt loads, dependence upon the state, lack of viable skills, external locus of control, lack of self confidence, fear, anxiety, stress...  It's all pointing one direction.

Paid manual labor of the future will only be for a select few highly skilled artisans who can perform their work better than machines

Nick Jihad's picture

Machine labor is making inroads into highly-controlled environments, like the factory floor. Building, gardening, civil engineering, maintenance and repair  - work that happens out in the wild - is not so easily automated. The clerical jobs that everyone thought would be automated away, have been replaced by similarly clerical work, because automation has made products and services economically viable that were not viable before.

Seek_Truth's picture

Man, I see in fight club the strongest and smartest men who've ever lived. I see all this potential, and I see squandering. Damn it, an entire generation pumping gas, waiting tables; slaves with white collars. Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don't need. We're the middle children of history, man. No purpose or place. We have no Great War. No Great Depression. Our Great War's a spiritual war... our Great Depression is our lives. We've all been raised on television to believe that one day we'd all be millionaires, and movie gods, and rock stars. But we won't. And we're slowly learning that fact. And we're very, very pissed off.

Tom_333's picture

Why? Is is it a problem? This has been the normal in many other reasonably large countries and it aint like those folks are living in caves.

Radical Marijuana's picture

I agree, imapopulistnow: "It really is different this time.  The ramifications are profound and I have yet to read where someone has come up with a reasonable solution."

Science and technology quantum leaped by orders of magnitude since the Industrial Revolution began to harness inanimate energy sources. Nothing within that process has been able to deal with that in ways which provide "a reasonable solution," because the industrial ecologies are just as much a part of the package along with the human ecologies, while both were actually controlled by frauds and deceits. Human civilizations were systems of enforced frauds. Successful warfare was based on deceits, and therefore, the REAL human death controls got done through the maximum possible deceits, upon which foundation was built the political economy operating through the maximum possible frauds.

Therefore, "a reasonable solution" would have to provide better death controls, to back up better debt controls, so that those would enable better human ecologies, along with better industrial ecologies, which were both able to be reconciled with them surviving inside of the overall natural ecologies. It is IMPOSSIBLE to come up with "a reasonable solution" which does not include the human murder systems operating death controls at the center of that. However, since our ACTUAL murder systems operate through the maximum possible deceits, while the controlled opposition to those systems are just as full of the same bullshit too, it is IMPOSSIBLE to have any public debates regarding "a reasonable solution," since AROUND AND AROUND WE GO that the ACTUAL SOLUTIONS are operating the death controls through the maximum possible deceits, and the debt controls through the maximum possible frauds, while the controlled opposition to those systems deliberately refuses to fact the central facts that there MUST be some death controls, to cope with the chronic political problems which are inherent in the nature of life, which problems are being amplified by many orders of magnitude by new forms of life requiring the emergence of industrial ecologies.

What we have now is that the previously working middle classes became mainstream morons, who are sinking into the ranks of the "free shit army" in the lower classes. The problem is that "free shit army" is almost totally incompetent, and does not understand, because it does not want to understand, how it could or should operate its death controls. What has been happening is that the vast majority of human beings lived as slaves, within social pyramid systems. Thus, they became practically incompetent to act as responsible citizens. Instead, they acted like Zombie Sheeple, who have allowed the powers of "We the People" to be almost totally privatized by tiny groups of ruling classes.

In that context "a reasonable solution" is practically impossible. Instead, we are going to get extremely UNreasonable solutions! The runaway debt insanities are going to provoke runaway death insanities. That is especially going to be the case because the controlled opposition groups to the established systems are mostly different varieties of Black Sheeple, exhorting the Zombie Sheeple to go backwards to old-fashioned religions or ideologies as the way to provide "a reasonable solution." The public space is dominated by controlled opposition groups who are reactionary revolutionaries, who still embrace the same old false fundamental dichotomies, and the related impossible ideals, as the sources for "solutions." They deliberately ignore the real sources of the runaway problems, which were the advances in science and technology. Therefore, they deliberately ignore anything which could actually provide "a reasonable solution." Thus, our civilization is trapped with the horns of its dilemmas being that the ruling classes operate through being professional liars and immaculate hypocrites, whose "success" is based on legalized lies, backed by legalized violence, while their controlled opposition groups subscribe to the same old-fashioned bullshit social stories as the ruling classes promoted in the first place, since what happened was that the people who behaved like Vicious Wolves have taught the Zombie Sheeple to bleat their moralities, while the Black Sheeple opposition continues to recommend that their "solutions" are for everyone to become better Sheeple.

"A reasonable solution" would require everyone to become better Wolves. Such a solution MUST have its murder systems as the central core to everything else. However, IN FACT, the actually established death/debt controls operate through the maximum possible deceits and frauds, while the controlled opposition to those established systems agrees to basically go along with the same bullshit, that such systems ought not exist at all. As technology becomes trillions of times more powerful and capable than ever before in human history, and is headed towards quadrillions, IF civilization continues to survive, the same sorts of paradigm shifts in science that enabled that technology to happen SHOULD also happen in social sciences, in order to enable an intellectual scientific revolution which could provide "a reasonable solution" to the existence of those technologies. HOWEVER, THE OLDEST AND BEST DEVELOPED SOCIAL SCIENCE WAS WARFARE, WHEREIN SUCCESS WAS BASED ON DECEITS, AND UPON THAT BASIS WAS BUILT THE SCIENCE OF ECONOMICS, WHOSE SUCCESS WAS BASED ON FRAUDS.

Nothing less than more wide-spread understanding of those profound paradoxes could enable superior dynamic equilibria in the human, industrial, and natural ecologies to be more consciously developed. That would require that such a society, which was based on technology, would radically transform its philosophy of science, in ways which applied to politics, and then, all the way through its combined military and monetary systems. However, obviously, given that the ruling classes are vicious liars, who do not hesitate to back up their lies with violence, and so, the vast majority of the people they rule over are Zombie Sheeple, who believe in bullshit, and have been conditioned to not want to think critically about what they believed, we have nothing on the horizon of history that looks like "a reasonable solution," but rather, the horizon of history has brewing huge social storms, due to the degree to which civilization is controlled by huge lies!

"A reasonable solution" would require more radical truths about the deeper nature of the problem, BUT, since that problem is the "successful" control of civilization by Huge Lies, backed up with Lots of Violence, there is practically no way that kind of civilization can recognize and admit the deeper nature of its problem, and therefore, no practical way that it could address "a reasonable solution" to its problem! Instead, that society is terminally sick and insane, and is headed towards going through a series of psychotic breakdowns, and collapses into crazy chaos.

Ignatius's picture

"Shit, I even named my dog Astro just to push along progress."  Funny.

CHS is really pushing it to say the complaints of "off-shoring" are just political expedience.  He completely misses the negative effects of disassociation of manufacturing from the domestic economy.  He's really trying too hard to be the 'revolutionary' thinker.  He misses a lot.

BolanosGhost's picture

I'd agree about the "highly repetitious, simple jobs" being candidates for replacement, but lets not forget about operating leverage either - mechanization significantly raises fixed costs and hampers a firm's ability to change in scale to the demand for its service. Human labor can be hired and fired and scaled according to need. Sure, that labor needs some fixed capacity, but mechanization is fixed to a greater degree. Of course, in the ZIRPiverse, that NPV on the robot is looking mighty attractive and the MBA drones don't know any better. 

Dick Buttkiss's picture

On the contrary, Vampy, robots will do all the work — — with the understanding that while you can't have capitalism without capital, you can have capitalism without labor.

So how will people afford to buy the goods and services that robots provide?  There are two answers, only one of which is sustainable:

1) A society in which all but the ruling elites are on welfare (i.e., the masses are all wards of the state).

2) A society in which all are owners of capital (i.e., a true "ownership society").

The ruling elites will of course prefer the former in order to maintain their dominance over the masses, but as goods and services become ever cheaper amid a relentless drive toward genuine abundance — — the ruling elites will at long last be swept into the dustbin of history, freeing humanity to realize its all but limitless potential.

Until then, the state can continue to kiss my ass.

Matt's picture

You had me up until utopia, and that's provided continuing sources of abundant energy.

Dick Buttkiss's picture

We are awash in energy (10,000 times more than required to meet all our needs falls on Earth) but we are not very good at capturing it. That will change with the full nanotechnology-based assembly of macro objects at the nano scale, controlled by massively parallel information processes, which will be feasible within twenty years. Even though our energy needs are projected to triple within that time, we’ll capture that .0003 of the sunlight needed to meet our energy needs with no use of fossil fuels, using extremely inexpensive, highly efficient, lightweight, nano-engineered solar panels, and we’ll store the energy in highly distributed (and therefore safe) nanotechnology-based fuel cells. Solar power is now providing 1 part in 1,000 of our needs, but that percentage is doubling every two years, which means multiplying by 1,000 in twenty years.

Matt's picture

I wonder what side-effects absorbing that much sunlight and turning it all into infrared will have. Even in the desert, a huge solar array might reduce the high pressure area the desert creates, altering the rainfall pattern for the areas adjacent to the desert.

Dick Buttkiss's picture

Well, there's that.  Or perhaps you missed the "highly distributed" part, i.e., there won't be any need for "huge solar arrays" because we'll be generating electric power nano-technologically at the point of use.

Matt's picture

"Robots are going to replace humans in highly repetitious, simple jobs that generate high product or service volumes. Robots are expensive. Until the job meets those demands, human labor will still compete and be value added."

How about robots replacing pharmacists, surgeons, medical specialists? 3D-printers with precursors that make custom made drug perscriptions on demand. surgery robots that don't get jittery, tired, or leave things inside the patient. Better diagnostics based on retinal scan, blood sample, etc.

Robot taxis, Delivery bots, self-driving cars that get into accidents 1/100th as frequently as human drivers. 

Expensive? Try $3 per hour for a highly flexible, reprogrammable robot arm that can do assembly, packaging, etc. That means after counting taxes, benefits, etc, the human worker would need to work for $1 per hour in today's heavily diluted USD, and they would have to be superb employees, just to justify NOT using the robots.

tradebot's picture

Try learning a trade!!!  Everyone can't sit on their ass and shuffle paper...looks like burger flippin coming in vouge too...for the dummy's that won't study anything.

lordylord's picture

You can't raise a family of 4 on min wage!  We need a living wage!  Tax the rich!  /s

NOTaREALmerican's picture

Re:  You can't raise a family of 4 on min wage! 

The min wage is just how we (as a society) separate the predator-class from the prey-class.    

Raymond K Hessel's picture

Interesting point he made (I normally hate his posts) about indirect labor costs of people who live in cities.  In cities, people have voted benefits for themselves paid for with asset taxes, franchise taxes, corporate taxes, payroll taxes, etc.

See Toyota moving to Plano from Torrance.  How many auto makers are physically located in Detroit?

Many companies are beginning to move away from large cities with these indirect labor costs to states with low taxes or no taxes.  Grumman used to be in Long Island, NY before locating the entire campus to Florida in the 90s.

If that's the case, we'll see more jobs move away from large cities to smaller cities.

aardvarkk's picture

Absolutely.  Look at Detroit.  Then look at Fargo, ND.  Look at the population of Fargo and then look at job listings in Fargo.  They can't find enough people to fill all the available jobs.  Nearly as busy as Williston, but without the "growing pains" and some of the lowest cost of living in the nation by some measures...and this in a place where the climate often is, shall we say, "inhospitable".  I'm guessing any small-sized city you look at across the country, you'll see much the same thing.  Just because things are falling apart in places like Detroit and Cleveland doesn't mean the end of the world.  It just maybe means people need to downsize.

A town of 5-10,000 is often a great place to live and work.  A city of 1,000,000 often is not.  I spent about 13 years in and around Minneapolis, one of the NICER large cities around, and I'l never go back.  NEVER.  The traffic alone nearly drove me batshit.  I'm currently saving money, and when I have enough I'm going to move to a particular town in outstate MN of maybe 10,000.  MN has stupid politics, but this area has some of the prettiest country I've ever seen and more lakes than some people believe exist.  Property prices are reasonable and I should be able to afford a simple place on a lake with a few acres.  I can ignore the politics and catch fish.  Or read while I wait for fish to bite.  Or split wood.  Or go have breakfast/lunch at the diner in town.  Or sit on the dock and write.  Or walk up the road with my dog.  Or hunt rabbits.  Or do a little woodworking in the shop.  When the time comes to die, I want it to happen there.

Stuck on Zero's picture

Correct.  There is 100% employment in countries with honest governments.  Unemployment is caused by government.  Do you think a little village without any government has unemployment? 

insanelysane's picture

My favority analogy!

Instead of a country of 350 million people, imagine a village of 350 people.  Would you have a 60% workforce participation rate?  Would prisoners be doing hard labor?  Would you pay some aholes to sit around all day recording what the other villagers were doing?

all-priced-in's picture

If your skill level is so low all you can get is a minimum wage job - then maybe you should not be having kids.

If you have high unemployment - how will raising wages help that?

You already have an excess of UNSKILLED labor.

Can you name a commodity where the demand for it goes up when the cost is raised? 


Telemakhos's picture

As for the unskilled putting off having kids until they get a better job, that's just not how it works out in real life.  Birthrate is inversely correlated with education, which you can take as a proxy metric for labor skill or for delayed gratification.

"Maybe you should not be having kids": that's just a manifestation of delayed gratification.  Maybe you shouldn't have kids, maybe you shouldn't get married, maybe you should go back to school for a while, maybe you need to put off your dreams until you've laid the solid foundation for them... these statements of "prudence" are all forms of delayed gratification.

Meanwhile the poor and uneducated, both of which conditions are really just results of an appetite for instant gratification or what they used to call "poor self-control," end up out outbreeding those with more self-control.  They have more fun.  They get more sex.  They have a more "authentic" life.  They're Hemingway's bullfighters, in a metaphorical sense.  They have no savings, no plan, no skills, but, because they outbreed the educated, they have votes.

Anybody's picture

Good luck getting a job as an apprentice.

aardvarkk's picture

I just looked at the local job board and put in "apprentice" as a search term.  There are currently local openings for a couple of electrician apprentices, a baker apprentice, a fireplace installer, an HVAC apprentice, a mason's apprentice and a plumber apprentice.  I don't know how easy it is to actually land one of those jobs, but they're there.  Just a data point.

Hook Line and Sphincter's picture

Hey Aardvark, if you go to the NAICP you can learn various trades for free (the selection is limited now but contractors are building courses for the public right now and posting them as 'ads'). The satellite site Shopsquawk is for <18 years of age. The main site at also has a free relational database where skilled and unskilled labor can post their resumes to connect with both residential and commercial seekers. Contractors can use it to advertise, teach their employees, create classes, and find labor... free.

Perhaps, if those who utilize this site see the potential, then P2P relationships will be made on this that leaves the 'minimum wage' issue irrelevant. 

Hook Line and Sphincter

Tom_333's picture

Actually - there´s a new rather simple robot for flippin´burgers as well.

maskone909's picture

there would be plenty of jobs if the gov would step out of the way.

lordylord's picture

“That government is best which governs not at all and when men are prepared for it, that will be the kind of government which they will have."

We need a well-informed voter and a moral consumer.  Getting your news from CNN and doing your shopping at Walmart is not helping anybody. 

NOTaREALmerican's picture

Re:  We need a well-informed voter and a moral consumer. 

You sound like a fantasy Marxist.

Is it possible to have a majority of "well-informed" voters when, as history shows, it's so easy for the smart-n-savvy people to manipulate the dumbasses with bullshit?

What is a moral consumer?   When have morals mattered; except for the children.

lordylord's picture

Nice throwing the word "Marxist" around.  Try using it correctly sometime.

Is it possible to have a majority of "well-informed" voters when, as history shows, it's so easy for the smart-n-savvy people to manipulate the dumbasses with bullshit?

I am aware of history.  That is why it is necessary to have a well-informed voter. 

What is a moral consumer?

A moral consumer is someone who knows it is better to shop at a small business than at Walmart, for example.  Heck, throw out morals if you want.  Just call them well-informed consumers.

Grande Tetons's picture

Who shops at Walmart?  Who owns Walmart? I think you made his point. 

lordylord's picture

Care to make yours?


The following says it all:

"...and when men are prepared for it..."

Billy Sol Estes's picture

Walmart, Walmart,

That's our store,

We shop there,

'cause we are POOR

Tom_333's picture



That´s our store

We use or SNAP there

´cause we are poor

NOTaREALmerican's picture

Re:  That is why it is necessary to have a well-informed voter. 

You do understand that exactly half of the population are below average right?    Here's something else most people can't admit:   average NOT EQUAL good.    So,  a majority of any population aren't going to well informed anythings.

The real question is: how do you have a government and society, which holds itself together, knowing that less than half the population aren't well-informed anythings.   

lordylord's picture

The problems associated with the below-average (or average=dumb) voter disappear when you reduce the size and power of government.  Voting for Obama or Romney doesn't matter as long as the power of the federal government is constrained to that prescibed by the Constitution   ...and when men are ready for it...

You are arguing a point I never made.

Keyneconoclast's picture

Approximately half are below average. Exactly half are below median.

Matt's picture

Poverty, stress, malnutrition, substance abuse all lower intelligence. It may be possible to raise the average IQ to 120, since 100 is not fixed at the current median intelligence.

Whether trans-cranial stimulation actually works, or if it is snake oil, i don't know, but it may be possible to greatly accelerate learning. Transfusions of blood from the young has been shown to help improve the mind as well; perhaps soon a protein supplement will help reduce the effects of aging and stress on the brain.

If you don't think that education could produce substantially better results in the general population than the current system, I don't know what to say there.

cougar_w's picture

Not so sure about that. Keep repeating it and I still won't believe it.

ParkAveFlasher's picture

The author creates a solution to sell, called the mobile creative class, but what I would posture is that the mobile creative class is the culmination of the disease, not the emergence of a cure.  It is like trying to sell a life jacket on the Titanic full of the promise of floating; to be sure, you will float - that is, just before you freeze.  In fact, in these calm seas, lacking volatility, you wouldcertainly freeze long before you would ever drown.

mkkby's picture

Look folks, the math is simple.  Somthing like 80% (5 billion +) of people in the world live on $10 a day or less.  That means there is no productive work for them anywhere.  All they can do is grow their subsistence gardens or live on welfare. 

To match work and people, you need either 5 billion jobs or 5 billion fewer people.  If you live in the US or Western Europe, you are one of the rich, lucky ones even if you are on welfare.