Welcome to our newest season of HumAIn podcast in 2021. HumAIn is your first look at the startups and industry titans that are leading and disrupting ML and AI, data science, developer tools, and technical education. I am your host, David Yakobovitch, and this is HumAIn. If you like this episode, remember to subscribe and leave a review. Now on to our show.
Welcome back, listeners, the HumAIn podcast. Today, we continue talking about the future of work. What is work as the new normal? What is work in a post pandemic world? and does work continue to expand?
I’m pleased today to have on the show Jeff Wald, who is the founder of WorkMarket, and we have some great history together being involved with some of the same companies.
So Jeff, thanks so much for joining us on the show.
David, thanks so much for having me.
I am really looking forward to this conversation today, because as we look forward to the future of work in the world, there’s so much to talk about. And our shared history is with ADP, the payroll company, which has done great things around payment and providers and keeping companies afloat during the pandemic, actually for their day-to-day operations.
But before we move into those hot topics and the future, let’s start with the history. What is WorkMarket and what is some of the exciting work that you’ve been doing in this space?
WorkMarket is enterprise software that enables companies to organize, manage and pay their freelance workforce. So we built, by far, the largest enterprise software platform for the on-demand economy. Not a marketplace where a consumer can go, but just the software that helps companies to manage that very important and growing part of their workforce. We founded the company in 2010. We raised about a hundred million from SoftBank and Union Square Ventures and a few others. And three years ago, we were lucky enough to find a great partner to continue the growth of the company and ADP, as ADP purchased WorkMarket.
That is super fantastic to see the growth and scale that you’ve had since 2010. And when we think back to that timeframe, the gig economy, the on-demand economy, the gig plus plus freelance economy wasn’t as large as it is today. So you’ve had some foresight to discover where the market was going. Tell us a little bit about what does the history of work teaches us?
It’s such a great question, David, because so many people don’t look at history, and innumerable quotes about those that don’t study history are doomed to repeat it, but what’s important here in the world of work is we are in the very early stages of what many are calling the fourth Industrial Revolution. The industrial revolution being a time where a new technology comes, that massively increases productivity, therefore, fundamentally changing the supply and demand balance between companies and workers and companies, workers and society need to figure out the new normal.
And as we struggle with that now in regards to robots and AI, how do we not study how companies, workers, and society adapted to the last three industrial revolutions? Electrification, sorry, mechanization, electrification, and computerization. And so, here are broadly the three lessons, or the big lessons I should say.
We tend to see three phases. The first phase is the fear-mongering phase. And we are clearly in that fear-mongering phase where people are saying, “Oh my gosh, all the jobs are going to go, Oh my gosh, society is going to fall, it’s going to be terrible”.
And then we get into the economic and social dislocation phase, where you do start to see job losses. You do start to see people reply to the fear-mongering by becoming nationalistic, by becoming populist, and a very difficult time for society. And we’re either at the early stages or maybe we’re in the midst of that as well.
And then there’s the third phase or third threat, which is, we always see more jobs. We see higher standards of living. We see people working fewer hours, and so we have to start by freaking out. We have to deal with the dislocation and the adjustment, and then we end up in a much better place.
So that is very succinctly, succinct as I can do it, the lessons of history.
Thinking about that dislocation and societal movement, we’ve definitely seen the last few years, especially from the pandemic, that becoming distributed is the new normal, having multiple opportunities can be the new normal, and you’ve coined it the term, as you shared in the show today, reply.
But, do we all reply? And what does that? as far as polarization and splintering and disconnect or continuity of markets. I’d love you to unpack this a little bit, because what you’ve been sharing reminds me a lot of what I’ve read in one of my favorite authors, Jared Diamond, that I’m hearing some of those similar themes here today.
We need to be mindful of how those things played out, because companies adjust, workers adjust, society adjusts. Workers adjust poorly, companies, even worse, society, terribly. And a lot of people sit here today in 2021 and they say, Oh, my gosh, the world’s going to end, and they’re not looking at the lessons of history. And they’re looking at data and it seems very unlikely that the world’s going to end. The data would actually tell us that there will be no net job losses from robots and AI.
And then we have other people that say, ‘Oh my God, no, everything’s going to be fine. We’re all going to end up with more jobs and a higher standard of living, it’s gonna be great’. To which I say, okay, I agree with that. But let’s not gloss over the transition period and the difficulty in the economic and social dislocations that we’re going to see because of it.
But it’s important to understand the entire context. And most importantly, it’s important to not draw simple conclusions. The statement of “Oh, a new tech exists. Therefore, those jobs go”. History would tell us that is never true. Eventually they may go, but they’re not going to go immediately. It takes a tremendous amount of time for these changes to make their way through the economic system for a host of reasons.
And just because the new technology exists doesn’t mean the job goes away. And my favorite examples are waiters and waitresses. There are between three and four million people employed as waiters and waitresses in the United States. That job could have been completely displaced by technology 10 years ago.
There is no actual need, from a technology standpoint, to have a waiter or waitress. There is the need from a customer service standpoint, from a user experience standpoint. And so, just because the tech exists doesn’t mean the job gets displaced.
And we’re thinking about jobs that should, or shouldn’t be displaced.
I’ve talked about on previous episodes of this show, that one of my first jobs when I was going through college was being a transcriptionist for voice, actually, from doctors and lawyers. And we’ve seen how that industry, of course, has started to move into human augmented. It’s still not purely AI.
There is human fact checking and more advanced copywriting and editing. And the same is probably true for waiters and waitresses in the hospitality industry. Sure, we’ve had this big pandemic and it has been a massive disruption, and we’ve seen the growth of some POS companies. The clovers and the squares and these QR code menus. But what is special about humans? We value relationships, connection and more.
Very true. Will the tech celebration we saw with the pandemic, where there was increased penetration of digital payments and digital commerce and digital workspaces and a host of things, will that continue when we get the step back?
How many people are going to go back to restaurants? I would say the vast majority. Now, will people still use Instacart or will they go to the store unknown? And it’s very important that not only do we avoid simplistic conclusions, but that we draw conclusions based on a series of data points.
So right now now I have no idea how that snapback is going to happen. And what’s that going to mean for waiters and waitresses employment in terms of how many restaurants are open. I don’t know how people’s adoption curves are going to be if they’re so used to now using the QR codes and not touching a menu, that they’re not going to fill the need for a menu. And that leads to that further breakage away from telling somebody what you want versus just punching it in on your phone and having it digitally sent to the kitchen.
We don’t know. Over time, over the long term, waiters and waitresses have a substantive challenge and a very high risk of dislocation over the medium term. Highly unlikely over the near term. Not happening.
And this snapback throughout our COVID times, at least in the United States, there’s always been the talks of the L shape or V shape or K shape or what type of economic and business recovery that would be like.
And there’s been so many bets there. Of course, today we know it has not been the V shape. It might be K, it might be L, it might be W. Who knows. But what’s your take from what you’re seeing in work and the movement of people in technology? How is that shaping up to what maybe you’ve predicted or what you’re seeing?
Specifically in regards to the recovery or snapback, the short answer is, I don’t know. And nobody does. I will tell you this from a data standpoint, we can talk about where GDP may end up. We’re going to have in the labor markets, an issue with structural long-term unemployment. There are 10 million people that are not in work now that were in work pre pandemic.
And what do we do with those people? A lot of them had dropped out of the labor force. And therefore, the unemployment numbers don’t reflect it. The labor force participation rate reflects it. And so, that, to me, is a big challenge. We don’t know how many of them will stay structurally unemployed when restaurants and retail environments and entertainment environments open back up fully, in a God-willingly-soon post pandemic world.
And so we’ll have a good sense, but my gut tells me we’re going to end up with an incremental 2 million people as structural long-term unemployment. And that is a big zap on US economic activity.
And structural unemployment is something that many of us know about, especially in the education space. My background, having been involved with education bootcamps like Galvanize and General Assembly, it’s always about what’s the future of training, and can we bring more people into boot camps to go into these new technologies, like data science and software engineering to help the underemployed, to be part of that new economy?
One of the big initiatives that we saw pre pandemic, very successful in New York City, was working with NYCEDC to take underserved new yorkers who make under US$45,000 a year, and put them through a training bootcamp. So these could be retail workers, secretaries, and those in the hospitality industry.
And then get jobs paying at least 65 or $75,000 a year as front end developers and data developers. So this is, potentially, a trend of movement towards more technology of humans with technology-enabled jobs. And this leads me to my next question, that I’d love to hear thoughts on this. How has the data trended for these future of jobs or through the history of work?
First off that program is an amazing program, and things like that give me hope in that middle phase, that dislocation phase. Because the dislocation occurs because we’re not providing the resources necessary for retraining workers to the jobs, the functions, the industries, maybe the geographies that are losing employment to those that are gaining employment.
And so, to the extent that we do that well, the transition period is much smoother. And so I’m hopeful because of new programs, incentives, and new technologies that help to drive people, because what we see is the go-hard jobs growing, and by go hard, I mean, hard tech or hard human.
The hard tech jobs, David, you and I know, I’m sure the audience knows jobs and programming and data and robotics and AI and cybersecurity and blah, blah, blah. All those jobs are growing by leaps and bounds. They’ve been going through the pandemic. They will grow post pandemic. They were growing pre pandemic. The pandemic is not impacting that.
The jobs that are also predicted to grow over the next 5 to 10 years are jobs that I’m categorizing into hard human jobs. The hard human jobs are jobs that involve creativity and design, and empathy and human connection, jobs in healthcare. Jobs in customer support and sales, and marketing, jobs in design itself, and other creative functions.
Those jobs are also predicted to grow, and they’re projected to grow because there’s no near or medium term world in which computers, AI systems can do those jobs. Just none. The issue is in the middle. And the jobs that are repetitive, high-volume, task-driven jobs, those jobs through history get automated away.
Now what people miss in this is, it depends on the component tasks within a job. And let me explain that for a second. There are 704 different job classifications, job functions. In each job function we can analyze what are the component tasks that make up that function. If 0 to 50% of the component tasks are repetitive, high-volume tasks, the same thing over and over again, history would tell us that job sees almost no job losses through an industrial revolution. If it’s 50 to 75%, we see a graduation. At 50, we see few job losses, upwards of 75% of the component tasks, we tend to see about half the jobs in that job function go. And 75 really is this magic number.
Because once you get over 75, you very quickly get to a hundred percent of those jobs go. It doesn’t happen exactly at 75. When you get into 80, boom, we had a hundred percent. 100% of the jobs in that function go. Now, it depends on when they go. We look at waiters and waitresses. Actually, when you break it down, almost a hundred percent of their tasks are repetitive, high-volume tasks.
We’d like to think that we have a specific back and forth with the waiter and waitress, and we’re getting a very specific recommendation, but that recommendation could be broken down into a series of if-then statements. And so, just because the job has a high susceptibility to automation doesn’t mean it goes immediately.
But am I bullish on long-term employment for waiters, waitresses over the next five years, short 20, maybe after that? No. At some point that job will get almost completely displaced.
And for this displacement to occur in the long term, we often look at it in startups about having the conditions for the shift in technology.
And these could be, we can call “magic pill moments”. You need at least one of those magic moments to happen. Education becomes normal. Technology becomes mainstream. Something is, as a result of design or as a result of necessity, becoming that new normal. And so we’ve seen throughout the pandemic that being digital-first, being distributed, being remote-only has resulted in, perhaps, an antithesis of some of the data trends we’ve seen through the history of work.
And the challenge is thinking about long bats for what will stick or what is short term. So, for example, the number of hours worked as you’ve shared many times, Jeff, has historically gone down. And we’ve seen countries in Europe wherenow you work 30 hours a week, no longer 40 to 60, but the pandemic may have changed that. I just wonder if that’s for the short term or longer term.
It is a great point. The pandemic may have changed a number of things. The only thing that I have seen enough data where I am confident and drawing the conclusion that the pandemic has fundamentally altered in a substantive way, because fundamentally ordered it in a tiny way. I’m happy to have that conversation.
But the only thing that is fundamentally altered in a substantive way, such that the statistics within the labor market are going to be vastly different is remote work. Remote work and flexible work arrangements are orders of magnitude different than they were prior to the pandemic. And that is because companies had to change their mindsets, and they had to put in place the infrastructure, policies and procedures for remote work. And they didn’t want to do it before. But now that they’ve done it, there is no going back to that.
So it is very unusual to see labor statistics above 1% or 2% double in a short period of time. We just don’t see it in the labor world, but we were at 3% remote work pre pandemic. We may be upwards of 8 to 9% post pandemic. And that is a massive shift. The likes of which we see incredibly infrequently in the labor statistic world.
I remember when I worked at ADP a few years ago, all of my colleagues were mostly in the office. Everyone was there in parts of Florida and parts of New Jersey and parts of New York, and in different areas. But we did have one colleague who was remote, and that colleague was a full-time remote colleague. I remember back then with that individual who was an engineer. So, because they were a more technical role, they had that flexibility to be remote that it was not normal. But because they could perform remote, because that mindset was able to be shifted from the team, they had that privilege that right to be remote. Perhaps that is changing now from a privilege or more, given truth.
You are completely correct. The people that worked remote before, it’s what we would call a pull function. It was the employee asking for it. And the only employees that were granted it were employees that had some bargaining power, which tended to be people with high-tech skills, because of the supply and demand and balance in that market.
We are no longer in a pull function. We’re in a push function. It is now the employer that is saying, if you can work remotely, we’d like to reduce footprints, because we’ve gained confidence that the policies, procedures, and systems are working. We can do it securely, and we can do it at scale.
And we’ve gained confidence that the mindset was incorrect, and that people can be more productive and be more engaged in everything that those of us studying labor research knew. Remote workers are happier. They’re healthier, they’re more engaged. They have higher retention rates. Everything about remote work is a net positive.
And so we’ll see. But, David, it’s important to remember that the vast majority of people that go into a remote work engagement, remote work means more than 50% of the time. You are not in that office. If it’s under 50%, you have what’s known as a flexible work arrangement. 50%, some magic number there, because of a tax nexus standpoint.
And that’s where techniques get determined. And from an infrastructure standpoint, if you’re layer less than 50% of the time, I don’t have to allocate square footage to you. I can have a hot desk or hotel desk, but those types of workers, the vast majority of them, still live within a commutable distance of the office, because remote work does not mean I never see my colleagues. Because to your point earlier, humans are social animals.
We want to be with each other. We don’t want to be living off in the mountains somewhere just because our employer lets us and never seeing a human again. We don’t become a hermit. We want that human connection. We want the creativity and the serendipitous bump heads into in the hallways. Those things are very important for organizations. So the idea of a completely virtual organization is still rather fanciful.
I remember clearly in the news the day that Marissa Meyer took over the helm of Yahoo. This was a big story a few years ago. And at that point, Yahoo had actually become a distributed company. They were quite remote and quite many offices and, and she made at that time, a very unpopular decision to centralize Yahoo, to get them back into an office, to force people, to relocate, or take a severance package and to unify for the co-location and aggregation power of being in that location.
And there is some merit to that. And the reason I bring this up is, us being new yorkers who live in what many would say the greatest city in the world, with some of the strongest aggregation, economies, and power at play. What will that look like in the post pandemic world? Will economies like San Francisco and New York City and London continue their pool as major metropolitan powers with strong economies that aggregate in the short term?
I know the labor statistics have shown some of that movement and dislocation. I’d like to hear what you’ve seen in that regard. And some of your take there.
Those cities are hurting now. There is no question. And there is the danger that pain becomes a self-reinforcing cycle of fewer people. And then budgets get strapped, and potentially higher crime and a host of other things.
It is possible. It is something that would go against the incredible poll of history on this, bet against cities to your peril, throughout human history. We have seen an inescapable, almost uninterrupted trend of more and more humans moving to cities because of all the things that you said, and many more so, while New York City is kind of on its back foot now and other major cities are, as well, as people are able to, spending some time elsewhere, and working remotely, I would not bet against any major metropolis, certainly not in New York City. And I certainly, even though I’m not currently there, ironically as I make that statement, nor are you, I will be back in a couple months.
I love it, because in the early part of 2020, I interviewed Karen Bhatia, who’s one of the executives at NYCEDC. And we talked about New York City as the new Silicon Valley, of the power of aggregation economies, that amount of incubators, accelerators, across communication, that amount of languages. Just the amount of investment and capital flowing.
It’s just such uniquely valued props that in a remote world, how much of that is possible? So what I bring up, the question I’m begging is, where will jobs be trending? And we may not know yet, but, you said eight to 9% remote distributed.
It’s not going to be a hundred percent, but hopefully it’s not. it’s going be more than eight or 9%. I don’t know. I’m curious about your take.
I’ll tell you this, 8 to 9%. Remember this, the definition of remote work. Those are full remote workers, which again, doesn’t mean that you never go into the office, point one.
If we were to talk about people with flexible work arrangements, I’m going to give you 32 to 33%, as people that’ll go in three days a week, because again, three days a week in the office and two days not, you are not a remote worker, you have a flexible work arrangement. So very clear delineation between those.
And then third, it’s very important to remember that the max capacity of the US workforce for remote work is 42%. People in manufacturing and extraction industries and farming and transportation and logistics and entertainment and retail and leisure, and a host of others can’t work remotely. You can’t be a coal miner from your home. You have to be at the coal mine. And so, 42% is the most.
So when you think about the 8%, think about that as 20% of the people that can work remotely will, and that’s a very different way to view the problem. Or to view the solution set. And that 8% is based on a series of surveys that have been done around what workers want and what managers want.
And we’ll see how it plays out because we see that some people actually do want to go back to the office nine to five, five days a week. There are some, they’re very few. It’s not a lot. It’s like 5%. And we see some people that want to be a hundred percent remote. I never want to come to the office again.
I don’t see a need for it, but they don’t mean never again. They mean hardly ever. I don’t want to come for company gatherings. I want to be there once a month to see what the team and whatever, and that middle 85%, they just want a flexible work arrangement. And so, when we think about that 32 to 33%, that is out of the 42% max.
So perhaps, the new normal will not be just yet remote-only or distributed-first, but flexible work arrangement as that new normal, for the time being. So perhaps, this time period of 2021 through 2025, as we go through that global recovery is flexible-work first. And then to be determined what that labor supply looks like afterwards.
No question. First, in the near term, we have a good sense, in the medium term, a little bit of a sense, in the long term, we have no idea. So in the long term, everything’s off the table, but to the point you’ve made earlier and on a multiple fronts here, I want to make sure I’m clear about this. The reason I’m confident in remote work is we have so much data around it and the trends were so clear.
The other ones, I need to see two or three quarters of data in the snapback. So post pandemic, once we see that anyone that’s out there saying, more companies are going to engage robots and AI and say, okay, why do you think that, what’s the data used to support it? Because I know what the cap ex trends were.
I know with the increases in robotic technology and robotic process automation. So AI software and the enterprise, I know what they were pre pandemic. The pandemic, there’s too much noise in that data. Give me two or three quarters to get a sense as to what companies are doing. And I’ll give you, then, a good sense as to what’s going to happen over the next 20 years. But there is way too much noise in this data now.
And anybody drawing conclusions from it is making some very big leaps of faith.
And the big challenge is, when we talk about snapbacks, a snapback has not truly happened yet. There’s been different parts of the economy that are beginning to snap back, but we, as we’ve seen globally, and at the time of this release, there’s been multiple levels and stages of lockdown and back to normal and vaccine distribution, and really we’re in the world today of vaccines and variants.
And there are so many variants with data.
That is a great statement, by the way, I’m going to steal that, marking that down. I’m stealing that vaccine and variants. Until this vaccine is completely distributed, we have 1% of the US population that has received their full vaccine protocol.
We will get there. It’s just going to take time. And so it might be the end of Q2, where we start to get a sense of that snapback.
And so, thinking beyond that we’re talking a lot today, Jeff, about COVID impact on the future of work or the pandemic. And there’s so much here that we’ve been thinking about today that’s probably on the minds of our listeners, but even if we think more about the adoption of remote work, the adoption of flexible work arrangements, the jobs of the future can be very different. We’ve seen, of course, the advent of the typewriter becoming the computer and that creating many jobs.
There’s many other examples there that you’ve seen and we’re starting to see, how do you think tech is going to reshape jobs?
I’ll say this, David. It’s dangerous to make too many broad assumptions. And the example I like to give, we talked about my waiter and waitress example, which I like is a truck driver.
So if I were to say to you, Hey David, how was tech going to impact the truck drivers? And if they told you there are 3 million people employed in the United States today as truck drivers, what would your gut reaction be?
That is a lot of people moving, a lot of supply and demand.
Fair. A lot of people say, Oh, AI and autonomous vehicles, truck drivers.
I have no future in 10 years. There’ll be no truck drivers. And this is why you need to think about these things industry by industry, job function by job function, because autonomous vehicles may or may not come, and let’s spend a second on this. In the next five years, the vehicle itself may be road ready.
Because by the way, five years ago, every expert in autonomous vehicles said in five years they’d be road ready. And now, every autonomous vehicle expert says in five years they’ll be road ready. So I’ll believe it when I see it, but I’m going to give them credit for it. There’s a case to be made by the way that autonomous vehicles are never road ready and people don’t acknowledge that, but that is a possibility, I don’t think it’s highly likely, but it’s possible.
So we have five years before the autonomous vehicle itself is ready. Once the vehicle is ready and we understand how it’s going to be on the road. And that’s important, meaning we can’t parallel processes here. Once that happens, then we can begin to get the road itself ready. Because you can’t do it beforehand, because you don’t know what the autonomous vehicles are fully going to look like and what they need.
So then, we start to get the road ready. That means sensoring technologies in roads, all over the United States. That means repairing infrastructure because that truck can’t just pull into its local Exxon station and honk his horn saying my tire is broken. There has to be specific infrastructure to repair it.
And then the regulatory environment. What happens when that truck hits somebody? What happens if the cargo’s damaged, what happens if it gets hijacked? There’s so many things to think about the need to get put together. Let me give you my best case scenario in those 10 years. 10 years best case scenario.
It actually will take much longer. And then my friend, you need to replace the entire trucking fleet in the United States. Let’s just look at the largest trucking company in the US, Knight-Swift. They have 18,000 trucks. If they were to double the amount they spend each year on purchasing trucks, and the parts of the truck were to come in maybe half at scale as to what people think it will be, now, it would take them 10 years to replace their entire fleet.
By the way, if we keep those numbers where they are, it would take them almost 20 to 25 years to replace their entire fleet. So you start to say five years plus, 10 years, and clearly they’re not going to buy a single truck until the road itself is ready.
So again, sequential processing. Now you’re starting to talk about 20, 30, 40 years out before you start seeing a significant impact in truck driving employment. Here’s the story about truck driving employment in the United States. People think it’s autonomous vehicles and truck drivers are going to go. Wait. No, they aren’t.
The story is there’s a shortage of truckers in the United States. We are missing tens of thousands of truckers, and we’re probably missing them because people are whispering in their ear, “don’t go into trucking because it’s going to be a terrible future”. And trucking is a place where somebody without a college education, without even, really, a high school education can earn a minimum middle-class wage.
And so that to me is a deep dive into a very specific industry and a very specific function within that industry, and looking at how it might actually play out. And so that is what’s super important. And that’s why very difficult to paint with a broad brush as to what’s going to happen, because every industry is different and how these things may play out is very different.
One of the most understated or undervalued thoughts that people getting into new careers think about in the United States and globally is that hard jobs don’t pay well, when, in fact, they can and they do. Not only in trucking. I sit on our advisory council in New York City for the Manufacturing And Industrial Innovation Council.
And they’re talking about re-skilling and training up individuals. The conversations with some of the leading startups and big material suppliers and manufacturers in New York, yes, New York actually helps build Boeing planes, builds trains, builds chips, builds medical devices, a lot of this happens there, and people who work in this space can go through vocational training programs for different hardware and make upwards of six figures and beyond when you specialize. Not everyone has to be a software engineer or data scientist. So Jeff, when you talk about the future roads, the future of infrastructure with driving, there’s going to be chips and data, and so many nuanced things that are going to need servicing repair and monitoring.
And that is where we start to see new jobs get created. That is one of many reasons that new jobs get created. Somebody’s got to fix the machines, someone’s got to program the machine, someone’s going to sell the machines and all these other things. And then what we always see our jobs and industries, we just can’t even think about now.
It’s very simplistic to say, “they’re autonomous trucks. We need to be able to repair the autonomous trucks”. Okay. No problem. There’ll be jobs that we haven’t even thought about. Because there always are. If someone had said to you 20 years ago, they’re going to be X hundred thousand people working as social media managers, you’d be like, what is a social media manager? But it’s that a term? Are they like a cruise ship director? Like Julie from the love boat? Is she social media? Is that what that means? Nobody knows. Nobody knew then. I, actually, I’m not a hundred percent sure anybody knows now, but that’s a separate issue.
But the point being is that new jobs are created every time that we just couldn’t think about.
And so, work is something that we have not necessarily fully discovered, because society is changing the movement of people, processes, and products, and that leads us to the future of work.
Jeff, you launched that Future Of Work Prize on some of your long bets.
Tell us more about this prize and where you think the future works moving and why you launched this.
I’ll tell you why I launched it. I launched it because writing a book really sucks. It’s not a fun process. It took me seven years to write this book. And if I did not come up with The Future Of Work Prize, it is a very fair statement that I still would not be done with this book.
The Future Of Work Prize, David, is my attempt to Tom Sawyer, the end of the book, which is to go to the men and women that are actually out there shaping the future of work and ask them to write four to five pages, 10 pages, whatever they want, really, as to what they think the world of work looks like in 2040.
I had my process. My process was to set up this framework and to look at history data and how companies actually engage workers and deploy capital to come up with a prediction on the future of work. We talked a little bit about that prediction today, but just because I have put together, what is logical, reasonable and defensible through the framework in which I set out does not mean any way, shape or form I’m right.
I’m sure I’m wrong. I just don’t know where I’m wrong, but if you can crowdsource and get some of the smartest people in the world of work, people that lead the largest labor unions and staffing firms, the largest industry associations, the heads of HR at the largest companies, the largest platforms, then you have a much better chance of giving the reader a more fulsome look of what the world might look like in 2040.
I have my lens and my framework. They have a very different series of lenses and very different frameworks. And so I put together this thing, I do serve as an advisor to the X prize. And so, being able to copy their approach of putting up a $10 million prize and saying whoever’s the most correct? We’re going to award you the 10 million.
So we set up the prize,we set up a process where each one of them gets a vote on January 1st of 2040, and then I will award the 10 million to the author who is the most correct.
So, this is definitely about long bets. Seeing what comes to fruition in the next couple of decades and your book, The End Of Jobs: The Rise Of On-demand Workers And Agile Corporations, did come out in 2020 in the summer, but was, of course, designed much prior to the pandemic. It just seemed to have that foresight of this movement and shift looking today at some of the initial predictions, those initial long bets that are coming out.
Share a tease with our listeners here today, what are some of the interesting or fascinating trends being shared by thought leaders?
I’ll tell you this. The on-demand labor market, I’m not going to say it has much to do about nothing. But the growth in the on-demand labor market over the last 10 years has been slow and steady. It will continue to be slow and steady. So people like to predict, by 20, 30, 50% of the labor force will be on demand to hard. No, not going to happen. We look at the size of the US labor force. About 164 million pre pandemic.
The US labor force will grow. And I appreciate a lot of people would think that’s not that big a leap of faith. Actually, it is. Because the Japanese labor force, the German labor force, the French labor force, Chinese labor force are all shrinking. And so the United States, we might be alone in the industrialized countries and having their labor force grow.
The union movement will have a resurgence, but in a very different way. Not the traditional unions, which continue to lose market share, and market share is the important statement there. The number of union members has stayed actually pretty stable over the last 20 years. It’s just as a percent of the labor force, they continue to drop, but you look at things like the fight for 15, where it started as a union movement, but became a grassroots non-union led activist movement across the United States, by people at different companies, in different industries, in different job functions, uniting in a common cause of ‘we need more of the economic pie’.
And so you’ll see a morphed union movement in the union get back to the percent of the labor force it had, maybe in the sixties and seventies. So around 20% of the US workforce believes in some sort of union-type structure. And there will be no net job losses from robots and AI. We will go through a period of dislocation, but I think that 10 to 15% of jobs will be lost, but we will increase jobs and other functions in other fields.
And the big challenge for society is retraining. How do we retrain the workers from the jobs that have been automated away? Jobs in manufacturing still. And we’ve lost 40% of manufacturing jobs in the United States due to automation, not to trade policy or environmental policies.
People, politicians might talk about it due to US automation, and we’re going to start to lose more jobs in manufacturing, and we’re going to lose a lot of jobs in service. And so that’s 10 to 15% of jobs. That’s upwards of 25 million Americans. And that is something to be taken very seriously. And the big challenge in that is going to be retraining, something we talked about earlier and how we do that retraining is going to be key as to how smooth of an economic and social transition we have.
Thinking of all those trends, which are definitely forward thinking in some, we’re starting to see as a result of the post pandemic world, more concrete actions that are pragmatic today for our listeners, what would you like to leave or share on the show here, Jeff?
I don’t know how pragmatic I can get, because again, you can’t paint it with a broad brush here. But here is a broad brush I can paint with as I immediately go against what I just said.
There was a phrase out there that a lot of people are starting to go, “it’s being said too much”. And I’m going to say that is not being said enough. And that is you need to be a lifelong learner. The amount of time it takes a skill to abate is now four to six years. Four to six years and your skill is no longer monetizable in a meaningful way in most industries.
And if you are not constantly upskilling in industries that will continue to grow or rescaling because you’re in an industry that is at very high risk of automation and displacement, you are doing yourself a massive disservice. And there are new technologies coming on stream, VR training and a host of other things that make retraining easy, and dare I say fun.
And so, if you are not doing it, and if you are not taking ownership of it, if you’re waiting for the government to do it, if you’re waiting for a company to do it, you’re doing yourself a disservice. You own your professional development and you should own it in a way that maximizes the monetization of your skills over the rest of your career.
Well put. Well with that, Jeff Wald, founder of WorkMarket. Thank you so much for joining us on HumAIn.
Thank you so much, David. Super fun.
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