An uncertain future interview with professor robert reich from the goldman school of public policy

An uncertain future
As companies seek greater cost variability, jobs will
become less secure and companies more transient
In the face of rapid technological change and a globalised economy that allows
new entrants to disrupt markets at the drop of a hat, businesses increasingly
crave agility. In many cases, companies will seek to achieve that agility by growing
the section of their workforce that consists of temporary, part-time or freelance
workers.
This will have significant ramifications for workers’ lives. As Robert Reich,
chancellor’s professor of public policy at the Goldman School of Public Policy at the
University of California, Berkeley, explains in this interview with The Economist
Intelligence Unit (EIU), the shift will place increased pressure on workers to
promote their professional profiles to win work, while reducing their ability to
borrow against future earnings.
Meanwhile, the very nature of companies themselves will shift, from communities
with a shared identity to fluid associations of workers temporarily united behind
a brand. This will radically reshape the way companies employ and deploy human
resources, and what it means to be a business.
This interview is part of an investigation into the future of work by The
Economist Intelligence Unit, sponsored by Ricoh Europe. For more, visit
/>The EIU: In your view, how will labour markets evolve in the next 10-15 years?
Professor Robert Reich: Jobs will become ever less secure. Most people will not be able to predict
from one month to the next how much they’ll earn. Their hours will be less predictable as well.

Professor Robert Reich
Goldman School of Public
Policy, UC Berkeley
Photo: Perian Flaherty

What is the cause of this trend?
Companies are moving from a fixed-cost business model to a variable-cost model so that they can

be more nimble. Employment is the biggest cost of all, so obviously a variable-cost job also means
less secure and less predictable employment.

Is it a global phenomenon?
It’s the direction in which all work is heading, but the United States is in the lead. Other nations
impose more regulations and constraints in order to make work more secure and predictable, and
some nations still have relatively strong labour unions that are also holding on to more secure and
predictable forms of work.

How is this trend manifesting itself already today?
In all sorts of ways: more contract work, more freelancing, more temporary work, more parttime work, more work based on billable hours, and less certain hours and pay even for people
considered to be full-time employees.

S P O N S O R E D B Y:


What leads you to believe that this is a long-term trend?
The structure of the economy is shifting radically. Technologies are putting a premium on
nimbleness, the capacity to change direction very quickly. Companies have no choice but
to be flexible and fast. Technologies are also making it very efficient to hire large numbers
of people for a relatively short time (look at the Amazon Mechanical Turk for an extreme
example).

Will job insecurity affect all industries, or will some be left unscathed?
All industries will be affected eventually. The last bastion of security will be tenured
professors like me, but we’re a dying breed.

What are the implications for the economy, for society, and for individuals?

The structure of the

economy is shifting
radically. Companies
have no choice but to
be flexible and fast.
Professor Robert Reich
Goldman School of Public
Policy, UC Berkeley

The net result is more personal and familial stress, more willingness on the part of working
people to take on whatever work comes along (for fear that it will not be there in the future),
longer and more irregular working hours, greater emphasis on self-promotion and selfmarketing, and—in macroeconomic terms—less willingness to take on lots of debt and instead
more emphasis on saving.
As in so many other areas of the economy, people who have the most to offer in terms of their
education, talents and connections will do well. Others, less so.

And what will the impact be for businesses?
The very definition of a company will be up for grabs because it will be composed of so many
moveable and temporary parts. Essentially, a company will consist of a key capital asset, such
as a valuable piece of intellectual property, coupled with a brand name. All else, especially its
workers, won’t really be “its” workers at all. Not even the core “talent” will stick around for
long. At the level of the firm, HR departments will be less concerned about employee benefits
and more about temporary recruiting.

Is this trend inevitable, or can we do something about it?
Obviously, we can do something about it. If the public doesn’t like the degree of insecurity the
market is generating, it will push government to regulate the labour market and companies
to provide more stability and security. But, of course, any such rigidity will come with a cost—
less nimbleness and efficiency. Will the cost be worth it? At some point, almost certainly.

S P O N S O R E D B Y: