1. The Future of Work: Overview Framing Working Poor Families Project Policy Academy June 4-5, 2015 Maureen Conway and Vickie Choitz

2. Agenda for Session Welcome, introductions and overview of Policy Academy Preview “What Do You Want to Learn” exercise Future of labor market demand and supply Shifts in societal values “Future of Work” framework

3. Objectives Participants will gain a mental framework for understanding and discussing the various issues under the broad and multi-dimensional “future of work” concept. Participants will improve their understanding of 3 key areas concerning the future of work. Participants will learn about a range of state policy topics concerning the future of work and discuss short- and long- term policy options.

4. FUTURE OF LABOR MARKET DEMAND AND SUPPLY

5. 15% in goods producing sectors 83% in service sectors 53% of T, T&U = Retail 50% of Prof&Biz Serv = Admin & Waste Servs 16% of Ed&Health in hospitals; 11% in home health & LTC 87% of Leis&Hosp = food & drinking est’s

7. Proportion of Jobs by Required Level of Education Source: U.S. BLS Employment Projections: 2012-2022 Summary, December 2013

8. 42% 41.6% 16.6%

9. Other Key Employment Data and Trends Salaried vs. hourly paid Involuntary part-time employment Long-term unemployed Labor market participation rate Contingent work

10. Salaried vs. Hourly Workers In March 2015, 93% of employed workers were wage and salary workers (137 million out of 148 million total workers); the rest were self-employed or unpaid family workers. 56% of employed wage and salaried workers were paid hourly (77 million out of 137 million).

13. Labor Force Participation Rates: 1948-2050 Source: Federal Reserve Bank of St. Louis, using BLS data, October 2013

14. Contingent Workers Narrow DefinitionGAO “Core Contingent”Broad Definition Temporary employment (regardless of work arrangement); “do not have an implicit or explicit contract for ongoing employment” (BLS) Lack job stability + have variable and/or unpredictable work schedules Various non-standard work arrangements (regardless of duration) Can include wage and salary workers, self- employed, agency temps, independent contractors Includes agency temps, direct-hire temps, on-call workers, and day laborers Includes agency temps, day laborers, independent contractors, self-employed, some part-time workers 1.8%-4.1% total employment in 2005 7.9% of employed workers in 2010 40.4% of employed workers in 2010 BLS, CPS special, 2005GAO, April 2015

15. FRAMING THE FUTURE OF WORK

16. Observed Shifts in Societal Values Shifting business risk and workplace responsibilities onto workers Growth in assumption that the market cannot and should not be regulated; unfettered free market will produce best outcomes for society Lack of confidence in government Business culture prioritizing short-term focus and maximizing shareholder value  Biggest negative consequences for low-wage workers

17. Future of Work Framework The role of technology Business models, structures and decisions Structure of income-earning and benefits provision Worker rights and voice

18. THE ROLE OF TECHNOLOGY

19. Types of Technologies Robotics/automation IT/computers Artificial intelligence/ “smart devices”

20. How Does Technology Change the Shape of Work – 4 Questions to Ask Does technology eliminate a job(s), i.e., labor replacement? How does technology change how companies communicate with workers, i.e., scheduling? How does technology change the structure of work? How does technology change actual jobs?

21. Technological Unemployment Frey and Osborne, 2013

22. Integration of Workers and Technology

23. BUSINESS MODELS, STRUCTURES AND DECISIONS

24. Trends Outsourcing Contracting Flatter management structures and shorter tenures  diminished internal career ladders Sharing economy

25. How to Think about Alternative Business Models Profit sharing models Ownership structures, i.e., ESOPs Governance structures – By shareholders – Democratic governance, i.e., worker- owned coops, open-book management Benefit corporations

26. Businesses Have Choices For workers… Unpredictable hours; unstable incomes Competition keeps wages low; No benefits Company started in 2014 with backing from Coca-Cola Start a company that solves a biz problem Offers businesses way to fill short-term immediate need For workers… Substantial proportion of f.t. jobs Benefits—vacation, health, retirement Ownership options Predictable schedules Cross-training Gas station convenience store chain Per ft 2 sales are 50% higher than ind. Avg. Turnover 13% vs. 59% Outperforms in profitability and customer satisfaction

27. STRUCTURE OF INCOME-EARNING AND BENEFITS PROVISION

28. Elements and trends in market-based wages and benefits Elements and trends in publicly-provided income and benefits

30. Stagnating Wages… Even When Productivity Increases Productivity growth and real hourly compensation growth, nonfarm business sector, selected periods, 1947–2009 Source: Fleck, Monthly Labor Review, 2011 (BLS data)

32. Decreasing Employer-Provided Health Benefits In 1979, 43 percent of low-wage workers had employer-provided health insurance. In 2010, only 26 percent had health insurance through their employer. Source: “Health-insurance Coverage for Low-wage Workers, 1979-2010 and Beyond,” John Schmitt, Center for Economic and Policy Research and The Kalmanovitz Initiative on Labor and the Working Poor, Georgetown University, 2012

33. Retirement Plans for Low-wage Workers Participation employer-based retirement plans has declined from 52% in 2000 to 45% in 2010. In 2010, only 11% of the bottom fifth of income earners had savings in a retirement account. Many low-wage workers do not earn enough to contribute anything to a "defined contribution" plan even if they are covered.

34. Social Security Social Security makes up 50%+ total income for 65% of beneficiary units over age 65. It makes up 90%+ total income for 36% of beneficiary units over age 65. Social Security Trust Funds projected to become depleted in 2033, 77% of benefits still payable at that time. Proposed reforms bad for low-income workers, i.e., raising retirement age, across-the-board cuts.

35. Summary Wages stagnant or falling (except for the top) Employers reducing benefits (if they were ever offered or accessible) Workers working harder and smarter than ever (productivity growth) Wealth wiped out Even those with higher education are falling behind

36. Publicly-provided Income and Benefits Income: TANF, EITC, a guaranteed income? Nutrition benefits: SNAP, WIC Child care and early childhood education: CCDBG, TANF-funded child care, Head Start, Early Head Start, some ESEA, Home Visiting Health care: Medicaid, Affordable Care Act People with disabilities: SSI, SSDI

37. WORKER RIGHTS AND VOICE

38. Trends in Unionization In 2014, union membership in the U.S. included approximately 11% of wage and salary workers, down from a peak of almost 35% in 1954. – Unionization rates among workers in education, training and library occupations, and protective service occupations have the highest unionization rate at over 35%. – Unionization rates in the private sector have declined from 16.8% in 1983 to 6.6% in 2014. – In 2014, median weekly earnings for nonunion workers were 79% of earnings for union members.

39. Historic Labor Legislation and International Standards 1935: National Labor Relations Act (NLRA) gives private sector employees the right to organize into trade unions, encourages collective bargaining and allows collective action. Creates the National Labor Relations Board. 1938: Fair Labor Standards Act establishes first minimum wage and 40- hour week. 1947: Taft-Hartley Act amends NLRA by adding restrictions on unions including prohibiting certain kinds of strikes and boycotts, monetary donations by unions to federal political campaigns and “closed shops” (in which only union members can be hired). It allowed states to pass “right- to-work” laws that outlaw closed union shops. Today 25 states–mostly southern and western, although recently some northern ones–have adopted “right to work” laws. 1948: The United Nations General Assembly adopts the Universal Declaration of Human Rights; Article 23 states that everyone has the right to form and to join trade unions.

40. “Alt-Labor” Nonunion worker organizations, such as worker centers and worker alliances Growth of worker centers: – 1992: <5 – 2007: 160+ in 80 cities, towns, rural areas – 2013: 200+ Examples: