> From: "Sam Sternberg" <[EMAIL PROTECTED]> > To: [EMAIL PROTECTED], [EMAIL PROTECTED], [EMAIL PROTECTED] > Date sent: Thu, 25 Jan 1996 08:15:37 -0400 > Subject: The future of employment - robert Reich gets it right. > Send reply to: [EMAIL PROTECTED] > Priority: normal > > > Date: Wed, 24 Jan 1996 17:27:21 -0500 > From: "David S. Bennahum" <[EMAIL PROTECTED]> > Subject: MEME 2.02 > > - -=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-= > meme: (pron. 'meem') A contagious idea that replicates like a virus, > passed on from mind to mind. Memes function the same way genes and viruses > do, propagating through communication networks and face-to-face contact > between people. Derived from the word "memetics," a field of study which > postulates that the meme is the basic unit of cultural evolution. Examples > of memes include melodies, icons, fashion statements and phrases. > - -=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-= > > MEME 2.02 > > In this issue: > > o Interview with U.S. Secretary of Labor, Robert Reich. > > "Ultimately, we have to decide whether we are no more than an > economy sharing a common currency in which the primary social glue binding > us together is the business transactions we do with one another, or if we > are still a society in which we have special obligations to one another as > citizens." > --Robert Reich, in MEME 2.02. > > > > In the first week of January, AT&T fired approximately 40,000 employees out > of a total workforce of approximately 305,000 people. This came several > months after AT&T shocked the world by announcing its intention to divide > into three separate companies: a telecommunications service company (known > as AT&T), an un-named second company based at Bell Labs which will build > the hardware behind telephone networks, and a third company specializing in > computers, to be named National Cash Register (NCR). > > AT&T, one of the oldest, and arguably most successful, corporations in the > United States, made this decision for several reasons. One, according to > CEO Bob Allen, included making AT&T more competitive in the changing world > of communications, a world where simply carrying telephone conversation is > replaced by complex layers of "content" -- from multimedia to > video-conferencing to unknown digital network applications. > Simultaneously, the U.S. Secretary of Labor, Robert Reich, made several > pronouncements about the significance of these firings for the US economy > at the start of the so-called Information Age. Reich used the term > "electronic capitalism" in a New York Times op-ed to describe the changing > nature of the world economy and work. > > I managed to get the Secretary on the telephone for about a half-hour, and > we discussed the implications of AT&T's actions and the changing nature of > capitalism in the Information Age. What follows is a transcript of that > conversation. > > David Bennahum: Mr. Secretary, I want to thank you for taking the time to > speak to me today. I read your op-ed piece, and I'm hoping in this > conversation to really sink our teeth into the nature of work in an era of > electronic capitalism and the degree to which capitalism is changing, in a > sense, because of, shall we say, the Information Age or the arrival of an > economy based on information. > Reading your Op-Ed, you had this phrase "electronic capitalism" and > that it's replaced the gentlemanly investment system that we used to have > before. So I'm wondering, maybe to begin with, if we can start by looking > at what do you mean by "electronic capitalism"? > > Robert Reich: A form of capitalism in which investment decisions are made > with extraordinary rapidity. Money can be moved at the speed of an > electronic impulse. And there are a wide range of alternative places to > park money, not only inside the borders of one country, but literally > around the globe. Capital has never been as mobile. In fact, it is hard > to conceive of how it could be more mobile. > People, however, are still rather immobile. In fact, > two-wage-earner families are becoming the norm, and two wage-earners have a > harder time moving from place to place and getting jobs than one > wage-earner. It's also difficult for people to leave friends and family > when they depend on friends and family as never before for baby-sitting, > support, economic support, and even loneliness. > And finally, it's become difficult for people to move because often > much of their assets are tied up in their homes, in property values. The > rich rely upon stocks and bonds. The middle-class relies upon their own > home as their primary savings vehicle. But when the economy turns sour in > a particular region because of a massive layoff, housing values begin to > deteriorate. It's more difficult to afford to move to a place where jobs > are growing and property values are, accordingly, soaring. > So we have the paradoxical situation in which electronic capitalism > is making financial capital ever more mobile, at precisely the same time as > it has become ever more difficult for people to move, change jobs, and > change locations. > I ought to add one more point about the difficulty of shifting > ground. New jobs often require new skills. Unlike the old days in which a > machinist in one firm could leave that firm if necessary, and become a > machinist in another firm, today the good jobs require skills, and it is > not always easy to get new skills for a new job. Often one has to learn > those new skills. So mobility from job to job, particularly good-paying > jobs -- well, actually all jobs -- is somewhat less than it was in a mass > production economy. > > DB: Is the core behind all these problems the digitization of our > economy, in a sense? > > RR: To call it a problem I think makes a conceptual leap. it's a > problem to the extent that there is a widening disjuncture between the > extraordinary speed at which financial capital is moving and the > difficulties that individuals and families have catching up. It means that > many people who lose their jobs are left without easy access to a new job. > Financial insecurity is rampant because job insecurity is endemic... > > DB: Let me ask you this question then. If one of the fundamental > powers of our nation used to be, in a sense, that it had some degree of > control over its economy, to what degree does this mobile, sort of nomadic > capital undermine the ability of nation-states to have a say in governing > how their economy functions? > > RR: Well, considerably. Not only the nation-states have less capacity > because economic policy increasingly is determined by bond traders and > investment capital moving around the world, but communities have even less > capacity to determine their own fates. The entire communities are > susceptible to sudden loss of jobs, or a decision by a major business to > leave. Communities, states and nations are all being played off against > other communities, states and nations in a giant bidding war which is > undermining local tax bases at the same time as it penalizes the smaller > businesses that have less bargaining leverage, because they can't get the > same tax benefits. > Now, what's the answer here? Surely not to immobilize financial > capital. I think it would be a mistake to believe that the only solution > lies in imposing draconian controls on the movement of capital. Part of > the solution may be making it easier for people to gain mobility. In fact, > that's one of the goals that we have set for ourselves, creating a > reemployment system that is modeled on a very different premise than the > old unemployment insurance system, which assumed that one would get one's > job back again after a downturn, when the company was rehiring. The term > "layoff" is a misnomer. It comes from a time in our history in which most > job loss was temporary, people were "laid off" until they were back on the > payrolls. But these days, 70 percent of the people who lose their jobs > lose them permanently. A better term would be probably "castoff." > Perhaps in addition to easing the transition from job to job, > giving people better opportunities to get new skills, setting up a new > digitized information system so that people can know what jobs are > available and what skills underlie those jobs... By the way, that's all now > being created, and we're moving on that as fast as we can. But besides > that, we perhaps also need to create incentives for companies to upgrade > employee skills, to bring workers on as partners in terms of profit-sharing > and gain sharing, and if they are going to lay off people, do so in a way > in which the company assumes more of the cost of retraining them and > finding them new jobs paying comparable salaries. > > DB: Can I ask you a question, though, about... As someone who grew up > with computers, as part of that first generation of people to sort of get > them as kids in the Seventies, for me it's something I'm very comfortable > with. I sort of understand the machine. I sort of grew up with it, so > there's no real barrier for me. I know that I'm very fortunate in that > way. And I do, because of that knowledge and being with the machine, have > this feeling (and I think it might be true) that they are enabling > companies to be more efficient in the way they process information and > organize themselves. So is it actually possible that the people being > pushed out simply really won't be able to find work because literally we've > made the work "more efficient" so there's simply not the need for human > power that there used to be? > > RR: I don't believe that. I believe, and my belief is based upon > travels all around the country where I've seen technology creating new > demands for new skills we hadn't even heard of years ago... The garage > mechanics, for example, who understand the electronics underneath the hoods > of new cars and can diagnose and repair those electronics, are earning > $50,000 and $60,000. They are not garage mechanics in the traditional > sense of the word. Cashiers who can use computers to control inventories > become inventory managers and are much more valuable than the cashiers of > old. Truck drivers, those who have computers in their cabs and time > deliveries for precisely when the customers need them and also understand > how to repair and install the machinery are more than truck drivers -- they > really are technicians. > > DB: I can see that happening. But the counter-argument is made that, > you know, there used to be a clerk and an inventory manager; now there is a > clerk who does the inventory management. They get paid the same amount the > clerk used to get paid, and one job has disappeared. > > RR: What we know from the economy is that of the 8 million jobs created > over the past three years, most of them paid better than the median wage. > In fact, the most rapidly growing job categories are knowledge-intensive; > I've called them "symbolic analysts." Why are they growing so quickly? > Why are they paying so well? Because technology is generating all sorts of > new possibilities. There's not a fixed number of jobs to be parceled out > of which technology might be replacing one portion. Rather, technology > generates its own new jobs. And although the routine jobs are being > replaced very rapidly, higher-skilled jobs which utilize the technology for > problem-solving are being created at an even more rapid clip. > The problem is that many people don't have the right skills. We > were a mass production economy in the 1950's. Our middle class was created > through mass production industries. in fact, high volume mass production, > stable mass production generated the sorts of jobs that were the doorways > into the post-War middle class. But the new middle class is based on a > completely different premise. Instead of high-volume, standardized, stable > mass production, it is based upon the paradigm of continuous technological > change. The only people who are thriving in this new economy are people > who are becoming more valuable because they are utilizing the technology to > generate greater and greater value and output. Professionals, top > managers, technicians of all types are actually riding the wave of > technology. The top 20 percent of income-earners in this country are doing > exceedingly well. The top 5 percent are doing superbly well. > The problem is that median wages are stagnating. They've been > stagnating for 15 years. Even though the economy has grown, 97 percent of > the growth in family income over the past fifteen years has gone to the top > 20 percent of households -- I should say household income. And half of > that has gone to the top 5 percent. > There's not a shortage of jobs. I mean, if you look at the > employment picture, you'll see that (although I don't have December's > figures) through November we had 15 straight months of unemployment lower > than 6 percent, which many people said could not be achieved without > igniting inflation. There's no inflation. There's no inflation in sight. > The problem is that of the 115 million existing jobs, those already > existing in 1993, they have split between a relatively few paying better > and better, and a much larger number paying worse and worse. Technology > and globalization have conspired to shift demand in favor of people with > skills, the right education, and (I'll also add in) the right connections, > and against people without these attributes. > > DB: What do you mean by "right connections"? > > RR: In the new... I mean, electronic capitalism places a great premium > on being at the right place in the right time, with the right skills. One > of the great benefits of going to an elite college (and by the way, this > has always been a great benefit; it's probably more of a benefit now than > ever before) is meeting people who are plugged in to the new economy, or > more likely, whose parents and relatives are plugged in. It's those job > connections. You know, my Uncle, my Father, my Mother, my Aunt, my > Friend's Friend is in this industry, is doing that. Experience counts for > so much, the first few jobs count for so much, that web of connections > often in a university setting often is vitally important. > There are also the connections that come from working in a dynamic > sector of the economy. If you are deeply involved right now in the > Internet in terms of products being generated on the Internet, chances are > you're rubbing elbows in cyberspace with people who are doing some > fascinating things. You have a greater likelihood of knowing what you need > to learn over the next six months in order to get closer to the cutting > edge. > > DB: Does that tend to increase or accelerate the process of division > between the top strata and the rest? > > RR: Absolutely. Because the people who are in the middle of the income > distribution, or below, are that much less likely to have that elite > education or to be rubbing elbows in cyberspace. You mentioned a moment > ago that you were a product of... > > DB: Yeah, I'm one of those lucky people. I went to Harvard and work on > cyberspace. > > RR: But what I want to emphasize is, it's less generational than it is > socio-economic. There are many people now who are middle-aged and who have > become computer-literate, perhaps not computer nerds but > computer-literate, because they have the tools to learn. But young people > today who are 5, 6, 7, 8 years old, young teenagers today who are in homes > without computers, who have no idea how to use them, what to do with them, > how they can be tools for learning, those young people are at a serious > disadvantage, even if they didn't face all the other barriers that they now > face. > > DB: The image of the Information Age that we used to have in the > Fifties and Sixties was one of prosperity, and then in the Seventies and > Eighties was one of prosperity mixed with technological wizardry, and that > we'd have these high-scale jobs that at least would give us really high > pay. But it was a very optimistic vision, I would say. > > RR: Well, it's a vision that has come true for a segment of our > population. But electronic capitalism also enables the most successful to > secede from the rest of society. It is now possible for top level > managers, professionals and technicians to communicate directly with their > counterparts around the world to generate new products and services for > other counterparts around the world without depending economically upon the > productivity of lower-wage and less-skilled people. > > DB: And in a sense, because of that, the moral link to the community > has been severed, right? > > RR: Exactly. > > DB: I mean, you're no longer a part of a community, so you have no... > > RR: Exactly. The word "community" right now is a very > appealing...connotes very appealing images. But in reality, very few > people live in socioeconomically diverse townships. In fact, we are, as a > nation, segregating by income to a much larger extent than every before. > Zip Code marketing has become the rage because marketers know that where we > live has a lot to do with what we can afford to buy. And remember that the > local tax base is still the major revenue source for schools, libraries, > infrastructure, and many social services. It's not surprising, therefore, > that we're seeing a wider and wider divergence between the public services > available to those living in very wealthy suburbs and exurbs and people who > are in working-class and poor towns. > > DB: I was at AT&T, and what they're trying to build now is a whole > framework for electronic commerce internationally and locally, where goods > and services and jobs really know absolutely no borders, neither in this > country nor outside of them. Does this process accelerate, then? > > RR: Yes, it does. During the next few years, this country is going to > be forced to so some very hard thinking about what it means to be a nation, > and also what it means to be a community. The budget battle that's going > on right now in Washington is just a small piece of that larger public > discussion. Ultimately, we have to decide whether we are no more than an > economy sharing a common currency in which the primary social glue binding > us together is the business transactions we do with one another, or if we > are still a society in which we have special obligations to one another as > citizens. > > DB: That's a pretty profound decision we have to make. > > RR: Well, we'll make it one way or another, whether we know it and we > make it consciously or if we don't know it and we make it implicitly. > > DB: If you had one question to pose to Bob Allen, the CEO of AT&T right > now, if you could be in a room with him, what would you ask him? > > RR: Well, it's the same question I ask a number of CEO's these days, > particularly from very profitable companies which are cutting back on their > workers. What's the purpose of a corporation? Is it merely to maximize > shareholder returns, or does a corporation also have special obligations to > its employees and the communities in which they live? If it's only to > maximize shareholder returns, then the burden of proof falls upon CEO's to > show how meeting that goal is likely to improve the standard of living of > all people in our society. To some extent, obviously, it does. > > DB: Right. But at what cost? > > RR: Yes, at what cost? Remember, corporations are creatures of law. > They don't exist in Nature. We have decided to organize them in a certain > way. It could be that in this era of electronic capitalism, we have to > think creatively about a slightly different form of organization, which > maximizes shareholder returns but also living standards for a much broader > segment of our society. > > DB: And that's the role of government and us as a community, to decide > what... > > RR: Well, ultimately, it's a social choice. Again, because > corporations don't exist in a state of Nature, we need to make that choice > consciously. > > DB: Do you think the 30,000 folks who got laid off yesterday are going > to be able to find satisfying, meaningful work? > > RR: Some of them will. The Telecommunications sector of the economy is > going to be growing very rapidly. Those who have the right combinations of > education, skills and connections will do very well. But middle and lower > level white collar supervisors and also blue and pink collar workers who > don't have the right skills or who...well, maybe just who don't have the > right skills, may find it far more difficult. > > At this point we were cut off by Reich's press secratary because Reich had > another appointment. > > - -=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-= > The contents of Meme are (c) 1995 by David S. Bennahum. Pass on the Meme > anywhere you want, including other discussion lists, just be sure to keep > this signature file at the end. > > Meme propagates bi-weekly. You can subscribe to Meme directly via email by > emailing [EMAIL PROTECTED] with a message that reads "subscribe > MEME firstname lastname" where firsname is replaced by your first name and > lastname by your last name (do not include the quote symbols.) Visit the > WWW home of Meme at Into the Matrix: > http://www.reach.com/matrix/ > > Send comments to [EMAIL PROTECTED] > - -=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-= > > ------- End of Forwarded Message > > >
