And they are a huge financial boon to the companies that have instituted them. They are substituting your unpaid, if not always voluntary actions for those of what used to be paid employees.
These processes have become so ubiquitous that we no longer challenge them, even if they engender some resentment. The question this raises is whether, at some point, consumers will begin to wonder why they are not receiving some sort of recompense for everything they proffer to benefit others, from personal information to personal effort. And the question for the businesses who rely on this free-effort model is whether they and their investors can really continue to count on it. JL
Craig Lambert reports in Politico:
How self-checkouts, ATMs and airport check-ins are changing the economy.
Technology has knocked the bottom rung out of the employment ladder, which has sent youth unemployment around the globe skyrocketing and presented us with a serious economic dilemma. While many have focused on the poor state of our educational system or the “jobless” recovery, another, overlooked factor behind this trend is the phenomenon of “shadow work.” I define shadow work as all the unpaid jobs we do on behalf of businesses and organizations: We are pumping our own gas, scanning our own groceries, booking our travel and busing our tables at Starbucks. Shadow work is a new concept, so as yet, no one has compiled economic data on how many jobs we, the consumers, have taken over from (erstwhile) employees. Yet it is surely a force shrinking the job market, and the unemployment it creates is structural. Thanks in part to this new phenomenon, widespread joblessness could become entrenched in the social landscape.
Consider what you now do yourself: You can bank on your cell phone, check yourself out at CVS or the grocery store without ever speaking to an employee, book your own flights and print your boarding pass at the airport without ever talking to a ticket agent—and that’s just in the last few years. Imagine what’s coming next.
In the modern economy, there is no bigger issue than jobs and the cost of maintaining a staff. For the vast majority of businesses, schools and nonprofits, personnel is the largest budget item. This includes, of course, both salaries and benefits. (The latter were once called “fringe benefits,” though the term “fringe” disappeared when the category outgrew anything resembling a fringe.) Hiring, training and supervising employees augment the cost of personnel, and another outlay kicks in when workers retire—pensions, annuities and, for some employers, the gigantic healthcare costs that pile up from retirement until the end of life, which has become a lengthy period as life spans stretch into the 80s and 90s.
In recent years, salaries in real dollars have either remained static or dropped for most of the labor force. But the galloping cost of benefits—one rule of thumb pegs them at 40 percent of salary—has put steady pressure on employers. Health care expenses, in particular, have driven up this line item. In the United States, health care has become an enormous, seemingly uncontrollable sector, swelling relentlessly and growing far faster than the rest of the economy—much as cancer grows, without relationship to neighboring cells.
Short of a seismic change like universal single-payer health insurance with price controls on drugs and procedures, the upward pressure on employee benefits will continue. The upshot is a strong incentive to replace full-time employees with part-time, outsourced, overseas or contract workers, who receive no benefits. Better yet, simply lay people off—or hand off jobs to customers as shadow work.
Politicians and pundits who shake their heads at the stubbornness of high unemployment rates are either overlooking or ignoring the obvious. Our economic and political system is stacked to reward businesses for discarding employees, not hiring them.
There are three main strategies for cutting payroll; two are well known. Downsizing is a classic: Lay off workers and shift their jobs to the remaining, shrunken staff. Not long ago, a nonprofit education newsletter in Boston replaced all three of its full-time staff members with one new full-time editor and a part-time assistant, who were expected to carry on—with half the previous staffing level. The remaining employees have no choice but to work more. Supposedly they feel grateful to still have jobs. Downsizing is an in-house breed of shadow work created by thinning out both senior people and support staff.
Second, automation replaces employees with machines. This has gone on for centuries, at least since the Industrial Revolution and probably longer. Automation pervades manufacturing and many service industries. Robots do not draw salaries, or belong to labor unions, or receive fringe benefits. They need maintenance, but don’t require vacation time, sick time, maternity leaves or, best of all, health insurance. Robots are impeccable “team players” with no personal agendas. They’ll work round the clock and on weekends at their regular hourly rate and never ask for raises. Hence, whenever financially feasible, businesses will substitute robotics for people.
The third, less-recognized way to cut staff is to outsource jobs as shadow work. In this model, the customers do the work, operating hand-in-hand with robots to complete transactions. The new check-in kiosk in the hotel lobby, for example, means one less person behind the desk. This pincer movement spins off unemployment that may be permanent, because technology, not the business cycle, drives it. Historically, automation has eliminated jobs at the point of production, e.g., in factories. Shadow work instead deletes jobs at the point of sale, e.g., at drugstore checkouts. As noted, there are no hard data on this yet, but one thing we do know is that points of sale vastly outnumber points of production. The development of ever-more-sophisticated technologies only fuels the growth of new forms of shadow work, as it enables consumers to do more kinds of jobs, and more cheaply. ATMs arrived decades ago, but today, customers can do much of their banking with a handheld device.
Shadow work is squeezing out entry-level jobs that have launched countless careers. These jobs at the base of the economic pyramid pay little but lay the foundation for everything that rises above them—and as with any structure, when the foundation crumbles, the superstructure may collapse as well. Entry-level jobs provide more than a paycheck. They are the sidewalk of the workplace, the platform that allows entry to all the businesses on Main Street.
Consider my father, who in 1937 began on the bottom rung of the ladder as a messenger in a small-town bank in New Jersey. In 1963 he became president, chairman of the board and CEO after having been promoted through the ranks as a teller, bookkeeper, loan officer and executive vice president. He understood every facet of banking by the time he took the helm of the company. Contrast this with the preparation many banking executives get today: an M.B.A. with specialization in finance and a penchant for high-risk derivatives. If these bankers had gone out on hundreds of mortgage appraisals like my dad, seeing the actual houses for which they were lending money and meeting real, live borrowers, would the 2008 banking crisis have happened?
Starter positions, including summer and part-time gigs, are where young people learn how to hold down a real job. (That means a job with wages—not a volunteer job, not an unpaid internship, not an NGO project in a developing country.) This is where they learn to show up on time, appropriately dressed and groomed, with a professional attitude, and learn habits like cooperation, punching a clock, service with a smile. But how does an aspiring banker work his way up from the teller’s window if ATMs and shadow-working customers have displaced tellers? How does a secretary become the office manager and later an executive if shadow work eliminates support staff—so there are no secretaries?
For those without education and skills, these low-level positions often are their careers. If such jobs vanish, a throng of unemployed young people will find themselves with little money and too much spare time. This is a dangerous development in any society. Unrest and violence throughout the Arab world have erupted from streets teeming with young men lacking jobs—angry youth who congregate online through social media. Such mobs can become unruly. In 2003, the dissolution of the Iraqi army put 400,000 young men out of work, triggering a bloody insurgency that still continues. In today’s global village, where citizens network and congregate in political flashmobs, we cannot risk creating an immense underclass of idle youth.
Yet this is exactly what we are doing. Young people aged 15 to 24 make up 17 percent of the global population but 40 percent of the unemployed, according to the World Economic Forum. In 2013, their rate of joblessness (12.6 percent) was about triple the worldwide adult rate of 4.5 percent. Youth unemployment has reached 17.1 percent in North America, 21.4 percent in the European Union, 14.3 percent in Latin America and the Caribbean, 27.9 percent in North Africa, 26.5 percent in the Middle East and 9 percent in East Asia.
In some countries, the better-educated may be psychologically deflated as well, as they’ve been told that education guarantees a successful career but are finding that’s not true. Many hold college and graduate degrees and even have “hard” skills like computer training, yet must move back in with their parents. In the United States, students float from internship to internship to degree program, as worthwhile salaried jobs remain scarce. Emily, at age 28, has moved in with her retired parents in downtown Boston. After earning a college degree in psychology from the University of Virginia, she hopped from one internship to another in fields including advertising and market research. She is now completing studies to become a licensed physician assistant, hoping that this recognized “hard” skill will finally begin a career for her.
Unfortunately, shadow work may be one obstacle that keeps this generation economically disabled. They can get stuck doing internships for years and find that they’ve only been spinning their wheels doing shadow work instead of building a career.
Yet all is not lost. While shadow work eliminates some jobs, it spins off others. For example, let’s reconsider the robotic gasoline pumps that have replaced pump jockeys, those unskilled teenagers who once filled gas tanks. The advent of self-service pumps also creates new jobs, like designing, manufacturing, installing and maintaining the robotic pumps. Furthermore, the charge-card data on gasoline sales gets uploaded via satellite to financial institutions, a process that needs technical and business oversight and employees to do it. Similarly, while Orbitz and Kayak.com reduce travel agencies’ business by transferring shadow work to customers, such websites also produce jobs for web designers, software engineers, online marketers and advertising executives.
Skilled jobs of this kind require education and technical training. Their salaries are a distinct upgrade over pump-jockey pay. But to cash in on the opportunities, we must renew our educational establishment, gearing it to the kinds of expertise the emerging workplace rewards. The information economy favors job applicants with technical skills and facility in the digital realm. “People” skills will also be rewarded in growth sectors like home health care. Even there, however, knowing the ropes of the health-insurance system and the complexities of pharmaceutical treatment will become more and more salient. Paradoxically, careers that depend on physical expertise, from hair styling to orthopedic surgery, may be among the most secure, as new software is unlikely to supplant the services such professionals provide.
The future of entry-level work remains a conundrum. Those who lack education or technical training could find themselves permanently frozen out of the job market, as robotic technology automates much of manufacturing and repetitive tasks, and shadow-working consumers take on jobs that are easily learned, like scanning bar-coded purchases. There will be fewer chances to start a career without some kind of skill to offer employers, as “on-the-job training” becomes something done not by salaried staff, but by you—and other shadow-working customers.
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