In surveys, America’s minority and immigrant communities continue to say that America’s future includes a great deal of opportunity and mobility. The truth is that new immigrants will always compare America with the countries they left, experience economic gains in their lifetime, and see their children get more education.
But with more than 75 percent of Americans saying today that they are not confident “life for our children’s generation will be better than it has been for us,” it is good that most people seem determined to find a route to a comfortable life in the new American economy.50
Principle Four: Freelancing, independent contracting, and small businesses may provide more income and autonomy
More people are employed independently in contracting, consulting, and freelancing, more are self-employed and own small businesses, and we are a country with very visible entrepreneurs. The increasing role of independent work was clear when focus group participants introduced themselves to the others. Many are working independently or know someone close who is. Pay attention to the college graduates in the groups and online. It is pervasive: “My business is going very well” (college-educated man, online); “I’m also trying to start my own company” (postgraduate-educated man, online); “I am self-employed” (college-educated man, online); “So we have a couple of small businesses on the side” (college-educated man, Oregon); “I’ve been doing a lot of contract work, and it pays the bills” (college-educated man, Ohio); “I’m a self-employed programmer” (college-educated man, online); “I recently started my own business” (college-educated woman, online).
Independent work is part of their strategies for providing added income on top of full- or part-time work or to supplement a spouse’s income. As one woman put it, “If there’s no jobs for them to actually acquire then that means that they have to create their own jobs” (college-educated woman, Oregon).
Started part time work for a software company … I’m trying to start a motorcycle garage at the same time so I can make ends meet. (college-educated man, Ohio)
I’m currently a doughnuteer at a well-known doughnut shop downtown. Going there tonight, then I do Internet marketing consulting on the graphic design, 3-D animation and illustration side. (college-educated man, Oregon)
Some see themselves able to achieve greater autonomy in a world where working people have uncertain hours and less flexibility yet also must balance family life and the education and training opportunities needed to get ahead.
I think it’s becoming today way more about being independent, being able to pursue your own activities. (college-educated Hispanic, Texas)
The further I get from working for a corporation the less I want to go back, because the freedom to make your own decisions is becoming extremely important to me. (college-educated man, Oregon)
Many of the college-educated who are well versed and positive about technology see it as a tool to allow the small guy to compete, and some know from experience:
If you own a small business … the ability to use the same technology … as a corporation levels the playing field. (college-educated man, Ohio)
They’re using the efficiency of [new technology] to undercut the entrenched. (college-educated man, Oregon)
I guess that’s what all these things have done, is to take these larger corporations’ game away from them a little bit. Which I approve of. (college-educated woman, Oregon)
It’s more entrepreneurial opportunities that exist because of the Internet and because of the technology and the social media.… It makes it easier to determine where there’s a need that needs to be addressed, and to be able to come up with a solution for that need. There’s also more collaboration of somebody in Washington State talking to somebody in New York State, and they form relationships that can turn into money. (college-educated woman, Ohio)
If I didn’t have a website, there’s a lot of plans I have that I wouldn’t even have because they found me through Google, or whatever online sources I’m on, or directly through my website. By having that small businesses can take off a little bit. (non-college-educated woman, Oregon)
So for many hoping to escape the constraints of this new economy where there is so much competition, little job security, no flexibility, and few pay raises, freelancing and independent business may be the solution.
In making that choice, they may be trying to follow the route many blue-collar workers have taken in manufacturing and construction. Many manual and factory workers are now working in small groups, dispersed in industrial parks, working for small contractors or are small businessmen, Andrew Levison writes in his insightful book. If you look at the construction of single-family homes and small commercial buildings, “you will see instead a collection of pickup trucks and vans with the signs of independent contractors, insulation, sheetrock and heating and air conditioning contractors, grading and foundation contractors, paving installers, trim carpenters, welders, glaziers, roofers, stonemasons, cabinetmaking, landscaping, and security and home entertainment installers.” They describe themselves as “hardworking and underpaid manual laborers, as prototypical independent and free Americans and as members of functional local communities.” They tell Levison, we’re “just country people.”51
But small businesses took a big hit during the recession—killing 170,000 small businesses between 2008 and 2010—and the number of small businesses is not back to precrisis levels. In focus groups, we found that people fully appreciate that being in business for yourself particularly exposes you to the ups and downs of the economy.52
When the economy first collapsed I literally lost half my clients, half my income. My husband was going to school, wasn’t earning any income … I spent a long time trying to build my business back up, and get my clients back up, and I still haven’t gotten back to where I was before. (non-college-educated woman, Oregon)
Or a lot of time you have to take work because that’s what’s there.… My husband does construction and he takes work all the time that’s under what he should really make. (non-college-educated woman, Oregon)
I’ve also found that when I started my business I was definitely living hand to mouth and it took a lot of years for me to be able to buy all the equipment that I needed and get up to the next level. (college-educated woman, Oregon)
My family was in steel, and we really got hit hard, big time. (non-college-educated woman, Ohio)
I’m so afraid of starting a little business. Like, “Oh, my God, how am I going to make sure I make my monthly payment?” (non-college-educated woman, Ohio)
With such limited opportunities in work, the ability for people to connect via the Internet has made working independently much more realistic and worth the risk.
I have a friend of mine who started up a company, and he definitely wouldn’t have the financier that he does, or even the collaborators if he didn’t have an online presence. (non-college-educated man, Oregon)
I sell on eBay, and I sell global, and this last three weeks I’ve sold to China, to Russia, to Taiwan, and we chat back and forth. (non-college-educated woman, Oregon)
I have a friend of mine who’s starting a small business. With him, he’s able to use Open Source … to find information in order to get his business off the ground. (non-college-educated man, Oregon)
There’s plenty of websites, there’s LinkedIn, there’s Business Trip, there’s tons of websites out there that are available for not just social networking, but for economic networking, business networking, all of it. (non-college-educated woman, online)
In her New York Times article, Natasha Singer offers an account of a thirty-five-year-old female navy veteran’s participation in the “shared economy” that allows her to pursue a goal of $25 an hour with “both freedom and uncertainty.” She makes her money from driving with her own car, responding to calls from people using their Uber or Lyft smartphone apps, doing cooking gigs, assembling furniture, and some accounting contracts for diverse TaskRabbit clients. Despite the immense
uncertainty and range of compensation, she creates an independence of sorts, flexible enough for her to organize her work around her child care schedule.53
It is possible that here lies the future. The founder of the Freelancers Union points out, “People are doing this in the midst of wage stagnation and income inequality, and they have to do these things to survive.” As we saw with the first principle, jobs don’t pay enough to live on in the new economy, and what if that is not temporary? These people may well be the advance guard of a “new class of laborer, dependent on precarious work and wages,” called the “precariat” by one labor economist.
How precarious, as one can see already, depends on whether your city, state, or employer is raising the minimum wage to a living wage, whether individuals are able to get health insurance under the Affordable Care Act, whether you are treated as a full-time employee with benefits, and whether groups are organizing the independent workers.
Principle Five: Technology makes life better but being globally connected makes the economy more complicated and competitive
Greenberg Quinlan Rosner and North Star Opinion conducted online focus groups for the Markle Foundation among those with a four-year college or postgraduate degree, as well as in-person focus groups in the globally connected high-growth, high-tech-friendly, and high-quality-of-life cities of Austin, Texas, and Portland, Oregon—in short, with the winners of ascendant America in a globally connected world. We asked them, “How is the structure of the economy different from maybe what your parents had?” “What does the term ‘new economy’ mean to you?”
The new economy means new technology, and that excites them. The new economy also means being globally connected, and they are conflicted about globalization. They understand how disruptive it has been for the types of work available, the amount of pay employers offer, and the fate of small businesses. Technology might level the playing field and create new opportunities, yet they believe it comes with a lot of collateral damage. They lack the enthusiasm for global connection one might expect—and these are the winners.
Many of the online participants immediately associated the term “new economy” with new technology, the Internet, tech companies, and tech jobs, and they believe that is an exciting world.
The new economy is one that depends more on technology and innovation. (college-educated woman, online)
There are more internet companies and tech jobs. (college-educated woman, online)
Certainly technology has us moving economically and socially at a much faster pace. (college-educated woman, online)
New economy … the way the internet and twenty-four-hour news cycles have impact. (college-educated woman, online)
It’s more tech based. (college-educated woman, online)
Two-thirds in the online groups said that the technology leaders and entrepreneurs were leading the adaptation to the forces of the new economy. One person said that Facebook was an example of a company adjusting well to the new economy because they were a technology company (college-educated woman, online). They admire Apple, Google, Amazon, Microsoft, and Netflix. They revere the high-tech entrepreneur with an idea who takes risks, attracts investors, and creates value, such as Steve Jobs—“He was amazing” (non-college-educated woman, Ohio). They value that technology and see the impact it has had on their lives. In fact, in focus groups in Oregon they were surprised they were not given iPads to type out their answers to handouts!
In the Austin focus groups, Google was the center of the discussion. “Google’s just everywhere. Like, it’s the only company I would sell my soul to. They’re in control of my soul. I use Gmail. I use everything” (college-educated respondent, Texas). They invested heavily in technology for “things we all need,” including a fiber network that forced old companies such as AT&T to finally build what they should have in the first place. Google gets the benefit of the doubt; as one person added, “I hear they have a good work environment” (postgraduate-educated woman, online).
Among the online focus group participants, a stunning 90 percent said that technology has had a positive effect on the economy. Many can see how technology can help small businesses, and people talk about the new technology jobs and believe the tech industry will provide many new employment opportunities in the future. They are encouraged because “some of the biggest companies, Facebook, Google, Twitter, they were all very small startups and they’ve become the leading global enterprises” (college-educated man, Texas).
But they are more concerned about who gets to reap the benefits of the tech-enabled economy and whether those who are struggling will see any gains.
Connectivity, but you have to ask who it’s serving. (college-educated man, Oregon)
I think it depends on what side you’re on. If you’re taking advantage of technology. (non-college-educated man, Ohio)
They are especially worried about what happens to those who are unprepared for the digital age. One Oregon college-educated woman asked, “What about people who are not technologically inclined, or savvy? Do they just get left behind?” And another observed the consequences: “I think computers and mechanics have replaced manual labor. People are relieved of jobs and computers and machines don’t need salaries!” (some-college-educated woman, online).
Many small businesses just cannot keep up with the growing pace of new technologies, where “it’s out with the old and in with the new” (some-college-educated man, online). They know “technology changes much faster than most individuals and/or businesses can keep up with” (postgraduate-educated man, online). People worry about how the smaller companies will fare, including the “mom and pop stores” that “do not do well in utilizing the internet” (some-college-educated man, online). Many think small shops and firms have too few resources and often cannot compete. One college-educated woman wrote online, “Small companies most likely [have not done well adapting to the new economy] because they do not have the resources, manpower and money to do so.”
When it comes to globalization, the online college graduates can only be described as deeply ambivalent. Three-quarters said that globalization has had a negative impact on U.S. workers and half that globalization has a negative effect on the economy. In the survey for the Roosevelt Institute, “trade agreements, abuses, and outsourcing to Asia that undermine U.S. jobs and pay” was the second-most-cited economic issue that needs to be addressed, reflecting the broad doubts about globalization. It is, as one person said, “probably good for the world but for us in the United States, probably more bad than good” (college-educated man, Ohio) and “in the short term it’s certainly transforming the standard of living here, and not in a good way from what I can tell” (college-educated man, Oregon).54
Those with more education and those living in America’s globally connected and high-tech cities—people who are integral to the new economy—are just lukewarm about globalization. Most view it as a given:
The economy [is] more global and more high efficiency. (college-educated man, online)
It is more globally based now. (some-college-educated man, online)
It is more global. Things in other countries affect our economy more drastically. (college-educated man, online)
Global problems. (college-educated man, online)
It is a more global economy. (college-educated man, online)
You have to be more globally aware now. Speaking Chinese is almost a necessary item on the resume now. (some-college-educated man, online)
Globalization is associated with more competition for everything, fewer American jobs, and fewer jobs, period. The new economy in this connected world is a “much tougher market now with more competition in everything” (college-educated man, online).
It is harder to get ahead. More people competing for the same jobs. (postgraduate-educated woman, online)
Across America, we need to wake up to the fact that we’re no longer competing against you and you and you. I’m competing against the guy in China, in India, wherev
er the lower-cost labor is with a higher education and higher educational standards. (college-educated man, Ohio)
America and American employees are the losers in this context.
U.S. workers, obviously you can make a strong case that it’s impacted us negatively because jobs are cheaper elsewhere and we’re losing our jobs to those countries. (college-educated respondent, Texas)
From what I know, globalization, in a lot of cases, means things like NAFTA, outsourcing jobs to India and China, which isn’t my idea of a good thing. At least not for America. (college-educated man, Oregon)
This connected global economy has been transformative, to be sure, yet in general those best positioned to engage with it and benefit see it as making life harder, less secure, and more complicated, particularly for the American employees.
The economy is a lot more complicated now than it was for my parents’ generation. (college-educated man, online)
This “new” economy moves faster with less security than in the past. (college-educated woman, online)
That ambivalence about the complexity and speed is part of the new consciousness of the new information and technology workers, not just workers in the old industries.
Principle Six: Big business and CEOs are the big winners in the new economy and the principal villains of the piece
CEOs of big businesses play a very negative role in people’s understanding of the new economy and dominate the drama. They are the ones that stopped giving raises to anyone except senior executives, outsourced jobs, employed as few Americans as possible, and put pressure on workers. They used their money and influence with government to tilt the economy to work for them. For ordinary people, the CEOs and large corporations have driven the negative changes in the economy—and the economists say they are right.
America Ascendant Page 15